Crocs Are Back

rollandthomas (74)in #investing • 5 years ago

Crocs, Inc., together with its subsidiaries, designs, develops, manufactures, markets, and distributes casual lifestyle footwear and accessories for men, women, and children worldwide. It offers various footwear products, including clogs, sandals, flips and slides, shoes, and boots under the Crocs brand name.

Over 15 years ago, the ugly looking shoes were the IT and took the world by storm. Crocs invented by three friends vacationing in the Florida Keys when one friend was wearing a slip-resistant clog made of closed-cell resin.

They sold their first pair of Crocs at the Fort Lauderdale Boat Show in late 2002 and by 2007 the company was selling 50 million pairs per year earning $850 million annually.

But over expansion and the Great Recession nearly bankrupt the company. In 2009, they ended the year with a loss of $200 million. That’s when they reinvented themselves and came out with a bunch of new designs.

In 2018, Crocs became a hit with Generation Z. According to a Piper Jaffay study, the shoe move from 27th to become the No. 13th-most-popular footwear brand among teenagers. Also, in 2018 the stock found it grooving rising almost 200% from 2018 to 2019.

And what do popular brands do when they know they have a deep, immovable reputation for making ugly things people love?

They make more ugly shoes. Behold the fanny pack Croc, which is a collaboration between Crocs and Japanese fashion brand Beams.

These collaborations, are a great marketing tool helping Crocs to reach new audiences and the coverage/press doesn’t cost a dime.

Crocs reported their first-quarter financial report last week, beating both revenue and earnings expectations. However, doubts regarding the supply of its classic clog styles in the second quarter have tempered expectations. Thus, the chart suggests to go long Crocs if price pulls back to the weekly demand at $19.