Crocs Incorporation is a company based in the United States. The company designs, manufactures, and sells footwear and other accessories for men, women, and children around the world. The company operates in over 80 countries around the world. Crocs was founded in 1999.
Why You Should?
- Crocs is a good growth play in an investor’s portfolio. Crocs have become insanely popular over the past year, something shown in StockX’s emerging brands report which shows that the sale of Crocs on its platform has increased over 400%. If the company can keep this growth going, this will benefit the company and investors.
- Crocs have specially designed a variety of shoes and other products as they have partnered with individuals like Justin Bieber and Post Malone. When these sets of Crocs were sold by the company, they saw strong growth in their business as people quickly bought up these new products.
- Crocs makes an extremely comfortable product for consumers around the world. The CEO of the company has recently pinned some of the company’s growth on this aspect of the company’s product. This comfortable and unique product will benefit the company and its investors.
- The company’s sales have further risen over the past year due to the COVID-19 pandemic. As people stayed indoors and went out fewer times, consumers bought Crocs because of their comfort and ease of use (they are slip-on shoes, low maintenance, etc.). They are also informal shoes, something that has helped it grow its sales as people work from home.
- The company has reported rising revenues and profits over the past couple of financial years due to the reasons mentioned above. This has helped the company grow and expand its business and has also benefited investors in the company. In the financial year of 202, the company reported revenues of around 1.39 billion and profits of around 312 million. Both of these metrics are higher than what the company reported in the financial year of 2019 when they had revenues of around 1.23 billion and profits of around 119 million.
Why You Should Not?
- Crocs face tough competition in the footwear industry. Some of these companies include Nike, Under Armour, Reebok, and many others. This competition might hurt the company and its investors in the future.
- Inflation in the prices of raw materials and other shipping costs will hurt the company’s operations in the short to mid-term (or until prices return to normal levels). Higher shipping and raw material costs have lowered the company’s profit margin. This might hurt the company and its investors in future earnings reports.
I think that Crocs is a decent long-term investment due to its position as a good growth play, strong partnerships, a comfortable product line, the positive impacts from the pandemic, as well as rising revenues and profits. However, tough competition and negative impacts from inflation might hurt the company and its investors.