Crocs completed the initial public offering of its common stock in February 2006. It began trading on the NASDAQ Stock Market under the symbol CROX. On October 31, 2007 the stock CROX dropped from $75 per share to slightly under $40 (its value six months previously) when the company announced decreased revenue projections. On April 14, 2008, during the midst of the Credit crunch of 2008, the stock dropped 30% in after-hours trading after the company issued a press release in which they significantly guided down earnings estimates for the first quarter. In the same statement they also said they would lay off its 600 Quebec City factory employees as retailers have been reducing orders, though about 100 sales and marketing positions would remain. "The retail environment in the U.S. has become increasingly challenging as consumer spending and traffic levels have slowed," Chief Executive Officer Ron Snyder said. During the financial crisis, CROX dropped to as low as $0.79 before rebounding ($15.50 by November 2010). On October 18, 2011, Crocs stock suffered a single day drop of about 39.4% on lowered earnings and revenues forecast. In June 2013, Crocs reported a 42.5% decrease in net profits from a year before. As a result the stock fell 20.2% in one day.
Crocs posted a 2 percent decline in sales for the third quarter, hurt by weakness in the Americas and Japan. The company said it saw less discretionary spending for footwear, apparel and other consumer goods in the U.S.
"I wish I could tell you we were expecting a big improvement in consumer confidence in the U.S. throughout the year, but we are not," Crocs Chief Executive John McCarvel told analysts on the company's earnings call last month.
POSTSCRIPT: Winn-Dixie and Dell
As I noted in an earlier post, I made some money buying Winn-Dixie stock for about $8 a share and then selling it, when it went private, at $12 a share. What made me do this? Well, in the classic sense, I was investing based on familiarity with the brand. I shopped in their stores and just prior to the buyout, Winn-Dixie shed a lot of its manufacturing facilities and poured money into the stores, updating them considerably.
So, foolishly, I thought, "Gee, this seems like a good stock" and I got lucky when the buyout came a few months later. Never confuse getting lucky with being brilliant. This was a classic "struck by lighting" investment, like my spectacular AVIS buy. But for every Winn-Dixie and AVIS, there is a General Motors, Fleetwood, CREE, or Syntroleum. Buying stocks based on the news media is a really bad idea - as I have learned firsthand.
When I say buying Pop Stocks is a bad idea, I say this with the authority of having been there and done that - and learning a few painful lessons in the process. Compare the Winn-Dixie stock price chart below with the CROX chart above - they are almost exact matches.
1. Despite the popularity of tablets, there will always be a demand for real computers. You may be reading this on a tablet, but there is no way I could have TYPED it on one.
2. Just because Dell isn't big in the tablet business doesn't mean it never will be. In fact, their new Christmas catalog is chock full of tablets.
3. The media hypes Apple as the end-all to creation, even though they have a minority share of the marketplace for PCs, Laptops, Smart Phones, and Tablets. What's more, Apple's market share will again shrink as cheap counterparts to these products become popular.