Ahead of the Bell: Crocs walking uphill in 4th-qtr

After Wednesday's closing bell, Crocs said a 32 percent decline in sales caused it to post a third-quarter loss of nearly $148 million. Crocs also forecast fourth-quarter profit and revenue predictions far below Wall Street expectations.

The news sent Crocs shares plunging 65 cents, or 34 percent, to $1.25 in premarket trading.

"Our performance was below expectations and continued to be impacted by the extremely challenging retail environments in the U.S. and Europe during the third quarter," said Chief Executive Ron Snyder.

Thomas Weisel Partners analyst Jim Duffy said the company spent more in the quarter to expand retail operations and boost marketing efforts, which weighed on margins.

"We remain concerned about elevated levels of selling, general and administrative expenses in the face of accelerating year-over-year revenue declines," Duffy wrote in a client note.

Duffy, who rates the stock "Market Weight," also said Crocs' sales declined in Europe and the U.S., where retailers ordered Crocs' products cautiously. Sales, however, rose 14 percent in Asia.

Baird analyst Mitch Kummetz, who rates the stock "Neutral," expects sales to decline in fiscal 2009.

"The key for Crocs is right-sizing its cost structure, but this may be difficult to accomplish until the sales stabilize, if they stabilize," Kummetz wrote.