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.
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After the closing bell sounded yesterday, footwear firm Crocs (NASDAQ: CROX) reported second-quarter earnings, or should we say second-quarter loss -- yet the Street is ready to celebrate.
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