Crocs Pulls Guidance as US Stores Remain Closed ‘Until Further Notice’
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Following amended federal guidelines to help stem the spread of the coronavirus, Crocs Inc. has joined a growing list of retail companies that have extended store closures across the United States.
In a statement Monday, the clog maker announced that its company-operated outposts in North America will remain shuttered “until further notice,” while many of its locations in Europe are still closed to comply with local regulations.
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“These are unprecedented times that are impacting not only Crocs, but our whole society. [The year} 2019 was a record … for the Crocs brand, and as we started 2020, we were looking forward to another tremendous year of growth,” President and CEO Andrew Rees said in a statement. “Today, while we are still in a strong position, we are taking precautionary measures for the near term to ensure the health and well-being of our consumers, our employees, our communities and our business. We are confident that these actions will ensure we are in a good position to manage through this crisis and will emerge a strong, vibrant brand.”
Crocs, which expects a decline in foot traffic as well as other challenges due to the pandemic, added that it is withdrawing its first-quarter and full-year guidance. The company had previously anticipated $305 million to $325 million in Q1 revenues, including a negative impact of roughly $20 million to $30 million as a result of disruptions to its business in Asia. Looking at all of 2020, it was expecting total revenues of $1.23 billion.
As a precautionary measure, Crocs’ revolving credit facility with its lenders was increased to $500 million from $450 million. The retailer has also suspended share repurchases and expects to end the first quarter with a balance of $90 million to $100 million in cash and cash equivalents.
“Our balance sheet remains strong, but during these times of uncertainty, we feel it is prudent to shore up liquidity and maintain flexibility,” explained EVP and CFO Anne Mehlman.
Amid the coronavirus crisis, Crocs is also taking initiatives to help workers on the front lines: The company last week launched a new initiative to provide U.S.-based health-care workers with a free pair of shoes on Crocs.com while supplies last.
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