Crocs Inc., the maker of the namesake colorful clogs, fell 28 percent following the close of Nasdaq trading after lowering its sales forecast and saying it will fire its 600 Canadian plant workers as retailers reduce orders.
``The retail environment in the U.S. has become increasingly challenging as consumer spending and traffic levels have slowed,'' Chief Executive Officer Ron Snyder said in a statement.
The company will close its Quebec City factory to reduce expenses, said spokeswoman Tia Mattson. About 100 sales and marketing positions will remain in the region, where Niwot, Colorado-based Crocs plans to continue retail expansion, she said. Crocs employed 5,300 at the end of last year.
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Read the Motley Fool's analysis of what this means for the shoe company. Rick Aristotle Munarriz writes:
Crocs has been exposed. Investors can't trust its outlook any more than they can count on a pair of Crocs to hold water or sangria. If things deteriorated this quickly in less than two months -- when Crocs was hopeful of earning $2.70 a share in 2008 -- how can we take it on its word over the next three quarters?
We can't. Those rose-colored specs have shattered. As a Crocs shareholder, it's hard for me to admit that, but it's true. Crocs as a company isn't necessarily shrinking in relevance. The shoemaker is still growing sales domestically, and things are going even better overseas. However, it is shrinking in relevance as a growth stock story. All of the bears -- including many of my fellow Fools -- were right when they read booming inventory levels as red flags, even as analysts stuck to their profit targets.