At least one Wall Street brokerage, Wedbush Morgan, downgraded its shares to "hold" from "strong buy" with analyst Jeff Mintz citing reduced retail demand for the product. "Current macrotrends in the environment" have led to weaker-than-expected sales, according to Crocs Chief Executive Ron Snyder, speaking to analysts during a conference call on Tuesday. Colder weather and the closure of the company's Canadian factory were also expected to crimp profit.

Reduced store traffic in U.S. stores, together with fewer retail orders, have cut into the footwear maker's sales, given what Snyder called the "impulse buy" nature of his company's shoes. "We need the traffic in order for our sales to really pick up," Snyder told analysts. U.S. consumers have been cutting back on purchases as they feel pressure from high gasoline and food costs, a slump in the housing market, tight credit and fears of a recession.

J.P. Morgan analyst Robert Samuels called Crocs' lowered guidance -- which predicts a possible loss of up to 5 cents per share in the first quarter from an earlier view of 46 cents profit -- "stunning." "We think bears will take the shortfall as evidence that the brand is over," Samuels wrote in a note. Samuels said he believed there was still a place in the footwear market for the Crocs brand, but advised investors to stay on the sidelines until current economic pressures, inventory issues and short-selling activity play out.