Crocodile Tears? Crocs Blames Earnings Drop on the Weather

Franchise Your Business

Schedule a FREE one-on-one session with one of our Franchise Advisors today and we’ll help you start building your franchise organization.
Senior Entrepreneurship Writer at CNBC
2 min read

Blame it on the rain.

The colorful rubber shoemaker Crocs is the latest in a series of companies to say that their weak earnings results were, at least in part, due to the weather.

In the three months ended in June, Crocs reported net income of $35.4 million, down 42.5 percent from the $61.5 million it posted the same quarter a year earlier. The Niwot, Colo.-based shoemaker reported sales of $363.8 million, up almost 10 percent from the same quarter in 2012, but the slimmer profit margins sent the stock down 20.2 percent on Thursday from the previous day.

Related: Crocs: From Footwear Fad to Billion-Dollar Company

Crocs cited colder than normal temperatures in April and May in the U.S. and Europe as one reason it posted lower profits. It also blamed penny-pinching consumers in the U.S., Europe and Japan, saying bargain hunters hurt corporate margins.

Crocs is not the only company to attribute financial woes to the weather. Recently, Coca-Cola said its sales of soda were dampened by “historically wet and cold weather conditions.” Whole Foods said its customers were making fewer grocery trips because the cold weather made them want to stay indoors.

And Clorox, the consumer products group that owns the Kingsford charcoal brand, said that the unusually cold spring meant fewer consumers were lighting up the grill, knocking down its sales of charcoal. “The U.S. had the coldest March weather in more than 10 years, which led to double-digit volume and sales declines in our Charcoal business,” said Chairman and CEO Don Knauss in a statement.

Related: Get Your Gift On With 8 of This Year's Hottest Holiday Novelties

It's unclear whether Crocs's second-quarter performance is a temporary blip or indicates a problem in the company's turnaround efforts. After going public in 2006 at $21 a share, the shoemaker’s stock dipped to $1 a share in 2009 in the wake of the recession, as consumers slammed the brakes on their spending. Made fun of as a fashion faux pas due to the shoe's clunky, clog-like design, Crocs expanded its product line to include 300 varieties of flats, wedges, boots and even golf shoes priced at $25 to $60. The company also improved its supply-chain management, revamped its retail strategy and expanded globally. The company’s turnaround efforts were largely successful and at one point in 2012, the company was worth over a billion dollars.

More from Entrepreneur
Entrepreneur Select: A Fund For Entrepreneurs, By Entrepreneurs

Entrepreneurs require more than just money, which is why we aim to empower you, as well as act as a catalyst for value creation.

Entrepreneur Insider members enjoy exclusive access to business resources for just $5/mo:
  • Premium articles, videos, and webinars
  • An ad-free experience
  • A weekly newsletter
  • A 1-year Entrepreneur magazine subscription delivered directly to you
Make sure you’re covered for physical injuries or property damage at work by
  • Providing us with basic information about your business
  • Verifying details about your business with one of our specialists
  • Speaking with an agent who is specifically suited to insure your business

Latest on Entrepreneur