Wolverine World Wide, Inc. (NYSE: WWW), a footwear maker that competes with businesses such as The Timberland Company (NYSE: TBL), announced impressive earnings -- yet the stock as of this writing was down almost 3%. What gives, you ask? Well, it looks like revenues came in a bit on the light side.

According to Briefing.com, Wolverine beat Wall Street's expectations by a whopping three pennies. They came in at $0.46 per diluted share -- this represented growth over the previous year's quarter of almost 18%. But the top line was rather sheepish in terms of expansion -- Wolverine took in $288 million this quarter versus $281 million in Q1 2007. Yeah, that performance wasn't anything to be proud of, I suppose. So investors were in a punishing mood and sold the stock.

Still, Wolverine is an interesting stock that probably should be put on a watch list. It's not too far from the 52-week high, it doesn't appear to be overly expensive, and according to the company's earnings release, gross margins expanded by 100 basis points. I wouldn't necessarily get in now if I wanted to invest in Wolverine, but I'd be on the lookout for pullbacks.

Disclosure: I don't own shares in any of the companies mentioned here; positions can change at any time.

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.

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.

Timberland Co. (NYSE: TBL), manufacturer of outdoor apparel and footwear, reported a 33% drop in revenue back in February, due mainly to a decline in its sales of boots and children's footwear. Seacoastonline.com reported, excluding restructuring costs, the company stated that it earned 52 cents per share in its fourth quarter. That earnings report came in one cent higher than the results expected by analysts polled by Thomson Financial. The company is currently in the process of dual share buy-back plans, initially involving over 12 million shares of it's Class A Common Stock.

While the company has experienced tough times in the marketing of outdoor shoes and boots, the manufacturer reported an increase of approximately 3% in its sales of accessories and apparel, which includes its strong SmartWool socks line. While the company has weathered a drop in domestic same-store sales of more than 9%, Seacoastonline.com reported that sales for the company declined only 5.5% globally in the fourth quarter. Careful watch on the economy might expose this stock as a nice quick pick in the event of a retail turnaround. Timberland is working to revitalize sales by applying additional new focus on footwear aimed at the food service, health care and hospitality industries.

Timberland is currently trading at approximately 50% off its 52-week high of $27.76 per share.

Gary Sattler is a freelance blogger and does not knowingly hold positions in the companies he blogs about.

The choppy/consolidating (or perhaps worse) market conditions sometimes give the impression that growth plays do not exist, but that is not the case, and one growth company worth reviewing is Skechers.

Skechers USA Inc. (NYSE: SKX) designs and markets contemporary footwear for men, women and children under seven individual brands, including the Skechers, Michelle K, and Somethin' Else names.

In general, analysts expect adequate same store sales gains in FY 2008 for Skechers' 150 company-owned stores, and via department store distribution. Analysts also expect new product introductions to proceed cautiously, as the footwear sector braces for continued discretionary spending reductions by U.S. consumers, due to the sluggish U.S. economy.

With recession fears, housing market worries and credit concerns, retailers have been facing tough times over the past few months. But on the heels of these worries, shares of world's largest athletic shoemaker, Nike Inc. (NYSE: NKE), have been climbing today the most in almost nine months after announcing last night stronger-than-expected third-quarter profit.

The company said its quarterly profit surged 32% to $463.8 million, compared with $350.8 million a year earlier boosted by strong gains in Europe and Asia. The company posted earnings 92 cents a share, exceeding analysts' forecast for a quarterly profit of 80 cents a share.

The company's quarterly revenue grew by a respectable 16% to $4.54 billion. For this period, the athletic shoemaker counted strong sales for products lifted by the weak U.S. dollar. Analysts, on average, expected Nike's sales to be $4.36 billion, according to FactSet.

Back in August, I wrote about all the beaten-down shoe stocks currently on the market: companies like Rocky Brands (NASDAQ: RCKY), Finish Line (NASDAQ: FINL), Phoenix Footwear Group (AMEX: PXG), and Shoe Pavilion (NASDAQ: SHOE).

Basically, selling shoes without a strong brand name is a tough business. Companies like Phoenix and Rocky are seeing their margins crushed by competitive forces, and retailers like Finish Line, Shoe Pavilion, and Genesco (NYSE: GCO), owner of stores like Journeys, are having a hard time making any money.

Innovation is they key to success in the industry, and there have been a few stories recently about companies looking to do just that. Nike (NYSE: NKE) and Foot Locker (NYSE: FL) have teamed up to launch House of Hoops, which aims to be a "destination" for basketball consumers.

At its Nike stores as well, the leading basketball footwear company is realizing that, to differentiate itself and expand margins, it will have to provide customers with more than just a nice shoe: they need a unique shopping experience.

Normally, when a company reports a quarter with numbers as impressive as Crocs (NASDAQ: CROX) did, you expect the share price to rise. On September 30, Crocs reported third quarter earnings per share of $0.66 versus expectations of $0.63 and revenue of $256.3 million, in-line with expectations. The death knell was the dreaded words "in-line."

The company had been on a run of exceeding Street expectations by quite a bit. The shares were hit very hard on Thursday coming down from $74 to $47, exacerbated by a 360-point decline in the Dow.

The numbers that Crocs reported were actually quite impressive as revenue were up 130% over last year's 3rd quarter and earnings were up 144% for the same period. The gross margins expanded from 58% to 60.4%, while the ever-important operating margin actually hit above 30%. Young growth companies are not supposed to hit operating margins of 30%. It is virtually unheard of.

The other important piece of news was the company raising its 2008 guidance for earnings in the $2.65-2.70 range. With 2007 looking to be at $1.96, the growth for 2008 would be 35-40%. The stock market reaction was a tremendous overreaction, and the shares are now selling at quite a discount to its growth rate and operating margin level.

Typically, the market is comfortable assigning one P/E point to one point of growth or one point of operating margin. With the growth rate and the operating margins north of 30%, Crocs could support a 30 PE of its 2008 earnings expectations or $81 per share. Assigning a premium over the 30 PE would lift the shares even higher.

Many of you know that I have been writing about Crocs (NASDAQ: CROX) since March of this year. I have been a bull on Crocs since the IPO in February 2006. The stock has been a homerun for many investor--and the nightmare of the short-sellers. The company has exceeded expectations quarter-in and quarter-out since the IPO. I have written that Crocs is a full-blown phenomenon and has the potential to one day challenge Nike (NYSE: NKE) as king of the hill. With all that said, I am moving my price target on Crocs from $80-85 to $100 within 12 months. Why?

Crocs has established, since its early days ( about 5 years ago), a global distribution model. Not only is the company taking advantage of the weak US dollar, but it has seeded its products all through Europe and Asia. The shoes carry a higher price point and when converted back into dollars, it bolsters its already high gross margins of 60%. The margins for Crocs are worthy of a case study at any major MBA program. For a young, growth company to post up operating margins in the 27-30% range is nearly unheard of. Young companies need to spend heavily in sales and marketing and in research and development all at the near-term expense of its operating margins--or pre-tax profits. The amazing fact is Crocs IS spending at the proper levels to develop its brand and marketshare and IT STILL PUTS UP THESE MASSIVE OPERATING MARGINS!

Discount shoe retailer Payless ShoeSource is now Collective Brands (NYSE: PSS), and recently acquired children's shoemaker Stride-Rite. Perhaps the split focus of trying to be both a discount and a full-price shoe store is what is causing profits to plummet. Collective Brands recently reported 2Q 2007 results. Profits dropped by 23% to just under $25 million, or diluted EPS of $0.38. Total sales were down 1%, not enough to worry, and same store sales were down 1.4%, again not enough to worry, yet. CEO Matthew Rubel blamed the downturn on weak sandal sales. Weak sandal sales in the summer? As good an excuse as any I suppose. But the fact remains the company is selling fewer shoes and making less money on those it does sell. 2Q numbers would have been even worse had the company not received $2.3 million from a lawsuit settled in its favor, and insurance payouts of $1.6 million to cover hurricane damage in 2006.

Collective Brands spent $1.8 million in 2Q 2007 on integration planning for the acquisition of Stride-Rite Shoes, an acquisition management states will have no impact, positive or negative, on earnings in 2008. Why not? What's the hold up that it will take until sometime in 2009 to figure out whether Stride-Rite was a good acquisition? $725 million of the acquisition was financed by a loan. For that kind of money in a company of this size, shareholders have a right to see what kind of bang they may or may not be getting for their investment buck.

To be fair, 2Q reporting period ended in early August, just before the big back-to-school shoe buying period. Inventory expenses was up 5.5% because the stores were stocking up in preparation for back-to-school purchases. Perhaps 3Q numbers will be more positive. Collective Brands bought back $4.6 million of its stock, 141,000 shares, in 2Q as part of a $32 million share repurchase program. This still has not helped the stock, which opened the year trading at $32.89, and now trades right around $23.20.

Crocs Inc. (NASDAQ: CROX) has been a true home run stock this year. Many of you have read my articles about Crocs since February and I have been recommending this stock since $15 on a split-adjusted basis. The shares are above $61, and the stock is still a buy!! Why?

I have written extensively that Crocs has surpassed the "fad-status" or the "niche-play" and is becoming a full-blown phenomenon. But to achieve phenom status, Crocs would have to develop products that go "north of the ankle." That is exactly what Crocs is doing. The company is launching a line of men's and children's apparel coming out this October. The clothing will be made from Crocs natural, proprietary resin material.

Further, the company has added several accessories to its line of products, including back packs, slosh-boots, t-shirts, etc. Crocs has also extended its branding identity by licensing its clogs and sandals to more than 100 American Universities and the NFL and NHL.

Shares of Heelys Inc. (NASDAQ: HLYS), makers of those god-awful and potentially dangerous wheeled sneakers, plunged more than 45% this morning after the company warned that its earnings would be nowhere close to what Wall Street analysts had expected.

The company expects profit of 28 cents to 30 cents and revenue of $55 million to $55.8 million. Analysts had expected profit of 38 cents on revenue of $68.4 million, according to Reuters.

I have one thing to say to all of the people who bought this stock when it traded at a ridiculous multiple: hah hah. You should have known better. Fads eventually end. Anyone who thought this stock wouldn't crash and burn was either naive or delusional

The only question I have now is whether Crocs Inc. (NASDAQ: CROX) is next. My colleague Georges Yared is super bullish on this stock. I don't share his enthusiasm. Whenever I see a Crocs display lately, it always looks like it hasn't been touched for a while.

Remember, you investors can be bulls or bears. Pigs get slaughtered especially those wearing sneakers with wheels on them.

By the power vested in me by AOL, its corporate parent Time Warner Inc. (NYSE: TWX), and those associated with the above entities, I declare the Heelys Inc. (NASDAQ: HLYS) fad to be over.

Mr. and Mrs. America, you will no longer be forced to dodge hordes of tweens flying around the mall in their God-awful and unsafe wheeled sneakers thanks to my sinister and cunning plan. I am urging my fellow thirty-something suburbanites to buy Heelys and roll on them in public. Once kids see how dorky we look "heelying," they will surely give up their expensive, trendy footwear, which they will grow out of sooner rather than later.

Perhaps the market is anticipating my plan. Shares of Heelys, which was one of the most highly touted IPOs last year, have slumped about 3% this year. Parents everywhere should rejoice. The company, unlike Crocs Inc. (NASDAQ:CROX), is a one-trick pony, and fads do eventually end.

Crocs Inc. (NASDAQ: CROX) is set to report earnings tomorrow after market close. Consensus estimates are for $.49 of earnings per share on revenues of $114 million. The shares have been strong these past few trading sessions and the stock is at $56.86.

Crocs has demonstrated excellent growth these past four or five quarters since going public in February 2006. The stock has seen a low of $22 since the IPO and a high of $58. The management team has raised earnings expectations for 2007 to $2.40 or $2.45 per share. 2008 could see the earnings per share top the $3 level.

Also from Georges Yared: Crocs is the next Nike

Crocs has been successful in launching its unique style of footwear in the moderately priced segment of the market. Crocs shoes sell in the $29.99 to $59.99 price range. The strength of its business model is the appeal across all demographics, from toddlers to the elderly -- they are cool shoes available in funky colors.

Crocs has driven its revenue base through excellent retail distribution agreements and through sales on its own website. Obviously, Crocs can capture a better, higher margin through website sales. The operating margin for Crocs is hovering in the mid 20% range, which is outstanding for any apparel or shoe manufacturer.

The high operating margin environment coupled with excellent distribution methods will allow Crocs to continue its growth trajectory, and the shares should reflect this.

Georges Yared is the CIO of Yared Investment Research where he explores more growth stock ideas.

This post is written as part of AOL Money & Finance's Best & Worst 2006. Vote for Crocs as the up and comer of 2006 or check out the other nominees in the category.

Beauty is in the eye of the beholder. You may not have thought a brightly colored plastic-looking clog thing would be something you'd clamor to buy -- but then that was before everybody on the planet had a pair.

There's probably not a kid under five who can't be seen trotting along in a brightly colored pair of these comfy shoes ... trailed closely by a mom or dad shod in their own.

Crocs, Inc. (NASDAQ: CROX) went from $1 million in revenue in 2003 to a projected $322 million this year. Its February IPO gave the footwear maker a market cap of $1 billion.

But it took more than a parenting trend to put Crocs on the big boy map. What started out as a lark by three middle-aged business guys turned almost overnight into another American success story thanks to a savvy business strategy. A little celebrity favor didn't hurt, either.

In 2003 the company was doing $1 million in business -- not bad considering sales were largely driven through word of mouth. Then the founders hired an old college chum -- retired Flextronics executive Ron Snyder -- to help them grow to the next level. In 2004 Snyder bought the Canadian business that manufactured Crocs and owned the rights to the resin that gave the shoes their particular comfort and odor resistance -- called Croslite. Now the company owned the means of production ... and suddenly it was a whole different ball game.