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Crocs new President is announced while the company registers free falling income

Jun 2, 2014 United States
Crocs new President is announced while the company registers free falling income
In the first quarter of 2014, the company reported frozen sales. Net income for the period declined 68.5%
President and Chief Executive Officer John McCarvel commented: "Revenues for our business globally in the quarter were in line with our expectations. From a segment perspective, our Asia segment continued to deliver solid quarterly revenue growth across all channels and our Europe segment remained on the positive trajectory, which started late last year. We saw continued momentum in our non-clog portfolio during the quarter, as new collections like our Stretch Sole, with its patent-pending Fit2U TechnologyTM, and our Busy Day collection helped us further expand our brand into a casual footwear leader."

In the first quarter of 2014, the company reported frozen sales, with a 0.2% variation from 311.7 million USD to 312.4 million USD. Operating income in the period was only 44.7% of the income generated by the operations in the first quarter of 2013 (16.8 million USD versus 37.7 million USD), and net income for the period declined 68.5% from 29.0 million USD to 9.1 million USD.

Jeff Lasher, Crocs Chief Financial Officer, added: "Factors driving our first quarter 2014 performance included the impact of the shift of the Easter holiday from March into April, negative currency impacts in Japan and Russia, and the change in product mix (…) Russia represents about 15 % of our business in Europe and our results in the region were impacted by the sudden weakening of the ruble in mid-January. As we continue to diversify our product line with new footwear brands such as the Stretch Sole and Busy Day and carryover products such as the Huarache and A-Leigh wedge, we are experiencing a reduction in Clog sales as a percentage of revenues. During the three months ended March 31, 2014, Clog silhouettes represented approximately 42% of sales, as compared with 47% in the three months ended March 31, 2013.”

By geography, the Americas are the most relevant region for the company’ sales generation (37.5% in total sales), followed by Asia Pacific (32.6%) and Europe (20.5%). Despite its importance in total sales, the Americas fell by 9.5% to 117.1 million USD, and 4.3% in Japan. Asia Pacific witnessed a good performance as sales increased 12.6%; Europe consolidated sales with a  4.5% increment.

Bearing in mind this set of results, and in terms of future performance, the company expects revenue million in the second quarter of 2014 to be of approximately 370 to 375 million USD.

In the meantime, John McCarvel retired as President, Chief Executive Officer and board member on the 30th April and the company announced consumer brand management expert Andrew Rees as the new President of the Crocs brand. Rees is due to also assume the role of principal executive officer until the company's search for a permanent chief executive officer is successfully concluded. Andrew Rees will report to the Crocs board of directors and is expected to join the company officially in a couple of weeks. Joining Crocs from LEK Consulting, a global management consulting firm, where he built considerable experience in retail and consumer products areas. The new President has extensive experience in the branded footwear arena with many well-known global brands, as he previously senior leadership positions at Reebok International, where he served as vice president of strategic planning and vice president of retail operations.

"Crocs is a powerful, exciting global footwear brand with highly differentiated products and tremendous upside potential," Rees declared.  "I look forward to working with the Crocs executive team, employees, distributors and our wholesale partners to accelerate the profitable growth of the Crocs brand and business around the world, as guided by an appropriate strategic plan."

For more information about Crocs Inc. please visit the company's website.

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