What Happened to the Crocs Stock Price Today?

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• Crocs (NASDAQ:CROX) stock soared more than 15% Tuesday after the sandal-maker reported stellar first-quarter numbers that absolutely smashed expectations.
• Revenues topped estimated. So did earnings. And management guided way above on Q2 and full-year 2021 revenues, too.
• CROX stock is now up 360% over the past year, as the pandemic plus multiple celebrity endorsements have fueled resurgent demand for the signature clog.

Why It Happened

• The market is right on this one. CROX stock is soaring because Crocs’ earnings were amazing.
• Revenues rose 64% year-over-year. That’s the best growth rate Crocs has reported in years, and it comes amid an economy that is still crawling back from an absolute lockdown.
• The growth was broad-based. Every geography is on fire. Americas revenues rose 88%. APAC revenues rose 20%. EMEA revenues rose 41%. Every channel is on fire, too. DTC revenues rose 93%. Wholesale revenues rose 50%.
• This growth is expected to persist. Management is guiding for Q2 revenue growth of ~65%, and full-year 2021 revenue growth of ~45%.
• Gross margins improved by 720 basis points in the quarter to a very impressive 55.3% mark.
• The SG&A rate dropped more than 10 percentage points thanks to positive operating leverage.
• Operating margins nearly quadrupled year-over-year to 27%.
• From head to toe, the quarter was awesome.

Does It Matter?

• The “Crocs comeback” is real.
• We’ve been pounding the table on this comeback since May 2020. During that time, CROX stock has risen by nearly 5X.
• We think it has legs.
• At the center of this movement is a secular pivot in fashion towards a “function over form” mentality. That is, consumers today care more about comfortable, functional, and economic clothes that “feel good”, over flashy, uncomfortable, and expensive clothes that “look good”.
• This trend got started when Mark Zuckerberg redefined business apparel with his t-shirts, hoodies, and flip flops.
• It was accelerated by the Covid-19 pandemic.
• Thanks to multiple celebrity endorsements and the company’s signature clog being ultra-comfy and ultra-durable, Crocs has turned into the face of this new fashion trend.
• We see Crocs sales and profits continuing to power higher at an incredible pace over the next few years.

CROX Stock Price Forecast

• Crocs has a long runway ahead.
• Global footwear sales this year will measure somewhere north of $470 billion. Crocs’ sales will come in around $2 billion.
• Assuming the company can leverage “function over form” tailwinds to continue to expand market share for the foreseeable future, Crocs projects as a double-digit revenue grower with upside margin drivers for most of the 2020s.
• Assuming so, our numbers say CROX stock is worth about $125 today.

One of the best ways to score huge returns in the stock market is to get there “first” — or, in other words, to identify emerging investment opportunities before everyone else.

That’s what we did with Crocs. We recognized early on in the pandemic that the “function over form” fashion trend was going to materially accelerate, and that Crocs was going to be a huge winner as a result. So, we told folks to buy CROX stock at $20, before anyone was really paying any attention to this name.

It has soared 5X since then.

Getting there first is what we do all the time our in our venture capital-style research service, Innovation Investor, which is focused on investing in emerging companies pioneering breakthrough technologies and business models that could change the world.