Crocs beat Wall Street expectations for the second quarter. However, the brand is still closing 158 stores over the next two years.
On Thursday, the company reported net income was $18.1 million, or $0.20 per diluted share, up considerably from $11.7 million, or $0.13 per diluted share during the same period last year.
Second quarter gross margin increased 180 basis points to 54.2% compared to the same period in 2016. Crocs attributed this to the better management of inventory and continued shift toward more molded product.
“We are optimistic about the early response to our Fall/Holiday 2017 collection, and anticipate that the positive sentiment seen to date will continue throughout the second half of the year, despite the challenging retail environment,” said Crocs President and CEO Andrew Rees.
The company expects third quarter 2017 revenues to come in between $230 million and $240 million. Crocs anticipates gross margin for the third quarter to be flat.
The company maintains its 2017 full-year outlook, with expected revenues to fall into the low single digits, due in part to the change in business models and accelerated pace of store closings. Crocs maintains its expectation of a gross margin of around 50 percent.
Rees also said that consumers showed a good response to the Spring/Summer 2017 collection, specifically in the clogs and sandals categories, driving solid growth in the silhouettes. The exec noted that the company will focus on core molded products and effective inventory management, which helped the company deliver gross margins exceeding guidance. He also said that the company’s focus on expense management helped keep the SG&A below projected levels.