Crocs announced Wednesday that CEO Gregg Ribatt will step down June 1, after the brand struggled during the fourth quarter and fiscal year 2016.
Andrew Rees will replace Ribatt as CEO during a time of uncertainty for Crocs. The brand saw revenue drop 10.5% to $187.4 million in the fourth quarter. The brand also recorded net losses in the fourth quarter of $0.60 per share. The brand plans to close around 160 retail stores by the end of 2018.
Ribatt urged that the brand’s fourth quarter revenues were in line with expectations, and stated that its gross margin rate improved by around 550 basis points compared to the year before. However, Ribatt did admit that the gross margin gain was less than anticipated due to currency and channel mix fluctuations and specific one-time events. He stated that the brand remains on track to meet its medium-term target for gross margins in the low 50 percent range.
“In order to accelerate improved profitability, we have identified $75 to $85 million of annualized SG&A reductions that we expect will generate an annual $30 to $35 million of improvement in earnings before interest and taxes by 2019. Looking ahead, I am confident that these actions will pave the way for renewed growth and improved shareholder value.”
For fiscal year 2016, Crocs saw revenues of $1 billion, a 5 percent decline on a constant currency basis, with net losses of $31.7 million, or a loss of $0.43 per share.
The company expects fiscal year 2017 to be flat compared to 2016.