Sector snap: Shoe makers decline on Crocs 1Q warning

NEW YORK (AP) - Shares of shoe makers sank Tuesday, after Crocs Inc. announced guidance cuts that one analyst termed ``stunning,'' amid lower-than-expected demand.

Crocs reduced its first-quarter outlook far below analyst expectations late Monday, citing weak sales and costs related to closing a Canadian manufacturing plant.

Crocs shares dropped $7.14, or 40.1 percent, to $10.65 during midday trading Tuesday. Earlier, they traded at an all-time low of $10.30.

JPMorgan analyst Robert Samuels said in a note to investors that the guidance cut ``frankly, was stunning.''

``While the tough macro environment is being cited as the reason for the miss, we think bears will take the shortfall as evidence that the brand is over,'' he wrote.

He maintained his ``Neutral'' rating on the stock and said investors should stick to the sidelines.

Other footwear stocks fell along with Crocs.

Shares of Heelys Inc., which makes wheeled shoes and has faced a similar decline in demand, fell 26 cents, or 5.9 percent, to $4.15.

Decker's Outdoor Corp., which makes the popular Uggs sheepskin boots, fell $4.30, or 3.9 percent, to $107.14.

However, Lazard Capital Markets analyst Todd Slater said in a note to investors that ``Uggs are no Crocs'' and reiterated his ``Buy'' rating on Decker's.

While Crocs shoes became overdistributed, Decker's limits distribution, Slater said.

``Crocs were available in 32,000 doors globally,'' he wrote. ``This is in stark contrast to Uggs, which has carefully limited door growth to around 4,750 doors globally, a level that purposefully under-satisfies market demand.''

Timberland Co. shares fell 32 cents, or 2.4 percent, to $13.01. Skechers shares fell 27 cents to $17.46.