Crocs, the rubber shoes that are either beloved or energetically hated, aren’t doing as well as many of us maybe thought. Last Tuesday, Crocs inc., reported second quarter profits of $30.4 million. That’s .35 cents on the share, if you are counting. However, it seems the seemingly good numbers aren’t good enough for executives running the company.
Crocs inc., a company with its base operation in Colorado, announced that it would be shutting down distribution plants in both Mexico and Italy. Additionally, Crocs vice president Carrie Teffner is leaving her role as CFO immediately and the company as a whole by the end of August. She’s being replaced by a former Zappos executive named Anne Mehlman.
Also, as leases expire, Crocs will close lower performing stores across the United States.
Crocs stock is way up from a year ago. On August 9, 2017, you could buy a share of Crocs for $8.50. Compare that to the closing bell on Friday whereas a share of Crocs inc. would cost you $18.53. The stock got a boost of several dollars after the second quarter earnings were released, but that was slightly tempered after Crocs essentially said “not good enough.”
The stocks are up because a profitable company just told the world it will become more profitable. While some on social media began “grace dancing” over the rubber shoes that they despise, the details were a bit understated.
Crocs is profitable – highly profitable. Outsourcing means the company can be even more profitable and take on less headaches.
The company issued the following statement to confirm:
“[T]here have been multiple media reports that Crocs is winding down production in our owned manufacturing facilities,” the statement said, in part. “While accurate, some people have interpreted that to mean that Crocs will no longer be making and selling shoes. Quite the contrary, Crocs will continue to innovate, design and produce the most comfortable shoes on the planet. As we streamline our business to meet growing demand for Crocs, we’re simply shifting production to third parties to increase our manufacturing capacity.”
That’s right, Crocs, utilizing the efficiency of outsourcing strategy, will probably be bigger than before.
So don’t “grave dance” just yet on Crocs, unless of course, your dancing shoes are a pair of Crocs.