Going into this afternoon's report, analysts were expecting to see the company show earnings of 10 cents a share, but the company failed to miss that estimate, by posting 9 cents a share for its most recent quarter. Despite missing by a penny, the stock has been moving up strongly in after-hours trading, with investors so far pushing shares up a bit over 14%?
Doesn't sound right, does it? The recent market has been punishing stocks that have missed estimates, so why is CROX shooting to the upside?
It wasn't that long ago that Wall Street was in love with Crocs, Inc (NASDAQ: CROX), the maker of the trendy slippers that took the world by storm last year. After going on a tear for most of 2007, the stock started to break down last November, and has been in a tail spin for the past 5 months.
The company is going to be reporting its first quarter numbers tomorrow after the market close, and all signs are pointing to yet another troublesome quarter for the company. Earnings.com is showing Wall Street estimates of 10 cents a share, but that number does not really hold too much water after the company announced a much weaker forecast last month in its preliminary release.
Last month, CROX shocked Wall Street when it said that it expected to see a 5 cent per share loss in the quarter, and revenues falling somewhere between $195 and $200 million. After that news came out, the already troubled stock took a serious nose dive, and gave up around 40% of its value.
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
Crocs, those ubiquitous colorful rubber clogs you either love or hate, are perhaps on the road out as a fad. But don't blame the fashion police: blame company shenanigans and a spate of bad PR.
Crocs Inc. (NASDAQ: CROX) has seen its share price plummet in recent months, reaching an all-time 52-week low after announcing it would adjust its first quarter guidance sharply downward. The company recently shut down its rubber plant in Quebec City due to the slowdown in U.S. retail orders. The guidance adjustment shocked analysts, and the stock began to melt like, well, like rubber. Indeed, this once darling of Wall Street has been brought low from all sides. My colleague Zac Bissonnette follows the company closely, (although I doubt he owns a pair himself) and recently wondered why the company wasn't addressing its safety concerns in its 10K.
Crocs (NASDAQ: CROX) pre-announced disappointing Q1 results and lowered Q2 revenue guidance growth guidance on April 14.
CROX is expected to announce full Q1 EPS on May 7. CROX closed at $10.11 Monday, near record low.
CROX May 10 straddle is priced at $1.50, June 10 straddle is at $2.50. CROX over all option implied volatility of 86 is above its 26-week average of 82 according to Track Data, suggesting larger price movement.
Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
A few days before reports surfaced of topless photos of the teen star set to appear in Vanity Fair, struggling clog-maker Crocs (NASDAQ: CROX) signed a licensing deal to market "an all new collection of footwear and accessories inspired by the smash hits, Hannah Montana and High School Musical, and the upcoming Disney*Pixar film Wall-E."
Disney spokesman Patti McTeague lashed out at the magazine for the spread: "Unfortunately, as the article suggests, a situation was created to deliberately manipulate a 15-year-old in order to sell magazines."
Cyrus took responsibility herself in a prepared statement: "I took part in a photo shoot that was supposed to be 'artistic' and now, seeing the photographs and reading the story, I feel so embarrassed. I never intended for any of this to happen and I apologize to my fans who I care so deeply about."
Whether she'll be able to recover remains to be seen. It immediately reminds me of the Rolling Stone cover featuring David Cassidy, and the interview that portrayed him as less family-friendly than he was thought to be. I'm no expert on Partridge Family lore, but I understand that the group's popularity waned following that incident.
If that happens with Ms. Cyrus too, Crocs will need to find a new savior.
I know the title of this post seems cheeky, but I'm actually serious: if you lost money on Crocs (NASDAQ: CROX), you should thank the aggressive short sellers who may have helped you avoid losing a lot more money.
Nearly two years, Mad Money host Jim Cramer called the short sellers in Crocs "way too aggressive." While those shorts got burned in the short-run, the longer-term decline in the company's fundamentals has proven they were right. Renowned short seller Manuel Asensio was a vocal critic of the company, raising questions about its valuation and prospects back when it was the hottest company on Wall Street.
With a short interest of over 38% when it was a high-flier, it seems likely that short selling kept a lid on the company's run-up.
And who did that hurt? The insiders who were dumping shares like they were going out of style the way that Crocs subsequently have! The aggressive short selling capped the transfer of wealth from small investors to insider in the low hundred millions. Had the stock been allowed to soar over $100, the damage might have been much worse.
So if you lost a few thousand on Crocs, go hug a short seller! They saved you from yourself.
Yesterday, I wrote about Crocs Inc. (NASDAQ: CROX) and the problems the company is having in Japan. The government there has asked the company to consider changing the design of its footwear after reports that children were getting hurt wearing its rubber sandals on escalators.
What's interesting is that the reports about Crocs' safety issues have all come from the media, not the company's SEC filings. Back in 2006, ABC reported that Crocs can pose a danger on escalators. Some hospitals have even banned the shoes citing safety concerns.
But Crocs' latest 10-K is devoid of any references to the concerns about the safety of the shoes.
A similarly struggling fad shoe company, Heelys (NASDAQ: HLYS), has also dealt with issues surrounding the safety of its footwear. From the risk factors section of the company's latest 10-K:
After losing about 40% of its value last week, Crocs (NASDAQ: CROX) has another headache.
The Wall Street Journalreports (subscription required) that "Japan has asked the maker of Crocs to look into changing the design of its footwear after complaints that children wearing the colorful plastic clogs have had their feet injured on escalators."
The company has faced similar accusations in the United States and Crocs is reportedly working with the Elevator/Escalator Safety Foundation (I can't believe that even exists) on public education initiatives.
What does all this mean for Crocs? Probably not much beyond the company's already dismal financial results, although the posters warning about the dangers of Crocs near escalators in Japan probably won't do much to spur sales.
Crocs' dramatic fall from grace has been an interesting story to watch, and the company just doesn't seem to be able to catch a break.
The safety concerns are not disclosed as risk factors in Crocs' latest 10-K, indicating that the company's management may not see them as a material threat to sales.
The fall of Crocs (NASDAQ: CROX) as a momentum stock has been just as spectacular as its rise.
After a drop of around 40% in trading this morning, shares of Crocs have fallen below their IPO price -- after closing at a split-adjusted price of $12.58 on the first day of trading, Crocs shares are down to $10.60, giving investors who bought on the first day a total return of about about -16%. That's amazing because at the company's high of $75.21 reached on Halloween of 2007, investors were up more than 500%.
I've always thought Crocs was a garbage stock. In February of last year, I wrote about Crocs as one of three retail fad stocks to beware of. Based on my prior posts on Crocs, here are the lessons I think investors can learn from watching the decline of Crocs' share price:
On a final note, Crocs' beaten down share price might finally make it worth another look, now that expectations have been moderated.
Damn, it feels good to be right! Back in mid-February, when I warned investors not to buy Crocs Inc (Nasdaq: CROX) after its "big" drop, I had no idea they were going to warn and get crushed again so soon (see, Steven Mallas' post from last night). But the stock's chart pattern told me the odds favored the bear case.
So, you know what? I'm not particularly surprised. Because I play the odds based on what the charts tell me. Sure you're probably sick of hearing that from me, but for better or worse -- and considering my 21% return in the first quarter of 2008 by staying true to the charts, it's been mostly better -- this is my my experienced-based belief.
No matter the stock -- whether you're talking Google Inc (Nasdaq: GOOG) or Wachovia Corp (NYSE: WB), the oil, technology or retail industries, the time of year when it pays to be bullish, analyst expectations (they only get it right 30% of the time) or the market cheerleaders promoting crazy price targets like this one on Apple Inc (Nasdaq: AAPL) --if the chart is too steep, I'm wary. If the chart is downtrending, I'm short-biased.
Whoa! Crocs (Nasdaq: CROX), the footwear and gear manufacturer, was down over 28% at the time of this writing during after-hours trading on Monday, April 14. The catalyst -- besides the fact that it's Crocs -- was a nasty little press release explaining management's belief that the company's first quarter will come in lower than expected in terms of net sales and earnings per share. Previously, Crocs was looking to do about $225 million for the top line and $0.46 per share for net income. Forget about it! Now expect between $195 million and $200 million for sales, and somewhere between a loss per share of $0.05 to break-even for the bottom line.
Well, the stock closed on Monday at $17.79, a little better than the 52-week low of $15.42 (keep in mind, the 52-week high is over $75!). According to AOL Finance, the stock, at the time of this writing, had an after-hours quote of $12.72. I'm not sure what the stock will do on Tuesday, but is it a trade? For me, no; for those who can't make it to Las Vegas and need to do some gambling, sure, you could play around with it.
I think the Crocs story is done for now. Its product portfolio is not one I have long-term confidence in. Crocs, in short, is not my kind of stock.
Disclosure: I don't own shares in any company mentioned here; positions can change at any time.
Crocs (NASDAQ: CROX) is recently up 97c to $19.35 in pre-open trading.
WedBush Morgan has a Strong Buy with a 12-month price target of $44 on CROX. Wedbush said on April 4, "Believe business substantially better than share price suggests, as product innovation brings in new customers."
CROX option volume was heavy on April 4 with 55,153 contracts trading. CROX May option implied volatility of 104 is above its 26-week average of 76 according to Track Data, suggesting larger price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
CROCS Inc. (NASADQ: CROX) is declining this morning after an analyst at JPMorgan downgraded the stock to "Neutral" from "Overweight," adding that a slumping economy is reducing demand. Personally, it looks like we might be seeing the beginning of the end to this fashion fad. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on CROX.
After hitting a one-year high of $75.21 in October, the stock hit a one-year low of $16.14 in March. This morning, CROX opened at $16.37. So far today the stock has hit a low of $15.70 and a high of $16.39. As of 10:45, CROX is trading at $15.89, down $1.44 (-8.3%). The chart for CROX looks bearish and steady.
For a bearish hedged play on this stock, I would consider a May bear-call credit spread above the $21 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 9.6% return in 7 weeks as long as CROX is below $21 at May expiration. Crocs would have to rise by more than 32% before we would start to lose money. Learn more about this type of trade here.
Crocs, Inc. (NASDAQ: CROX), that once high-flying rubberized sandal-shoe maker, has been dogged by rumors that it is selling products to discount retail giant Costco Wholesale Corporation (NASDAQ: COST).
Looking to set the record straight, Crocs issued a press release:
We have not sold Crocs-branded products to Costco nor have we authorized any of our customers to sell our products to Costco; however, we have discovered instances where we believe our products were being sold indirectly to Costco and we promptly terminated those relationships upon learning of that behavior. We are continuing to take aggressive measures to prevent this from happening.
Well that settles it, right? End of story? Hardly. Think about it: Crocs' retailers aren't selling stuff to Costco on the cheap because it's been flying off the shelves. If they could sell it at retail prices, you have to think they'd do that.
So Crocs isn't selling stuff to Costco: but the presence of its products in those stores is indicative of a glut of product at the retail level. And that's hardly bullish. Why would those retailers reorder when they can't sell what they got without Costco?
This afternoon Crocs, Inc (NASDAQ: CROX) reported its first quarter numbers, and the stock is soaring in after-hours trading -- despite missing Wall Street estimates by a penny.
It wasn't that long ago that Wall Street was in love with 
This post is part of our 
Crocs
Yesterday, 
After losing about 40% of its value last week, 
Here are some highlights from this past week's 
The fall of 
Crocs
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