Interesting, I just bought their Cloud-Monster sneaker. I was looking for discounts around holiday time but couldn’t find any. I ended up paying $175. However, the other models did have more sales. What margins are they aiming for?
I can’t help you get over the FAD concern, but the fact is, Crocs has been around for over 20 years and has only grown more popular. It’s reasonably priced and has genuine utility, especially for kids and people who work on their feet. As long as the management maintains the brand value and avoids dilution, as seen in the early 2000s, they should be fine. The current management is likely best in class when it comes to branding and marketing.
Regarding HeyDude, they definitely overpaid, but the brand is still in the early stages of growth and penetration. Many people aren’t even aware of Hey Dude, and early-stage growth problems resulted from changes in wholesale channels. I understand why Crocs acquired the brand; it has significant potential for expansion with a broader selection, as seen in their new designs like boots shoes etc.
The Crocs brand itself is worth more than the entire current market cap without growth. HeyDude, even without growth, is generating $100 million to $150 million of EBIT. They could sell it tomorrow for at least $1 billion.
As long as the market overcomes its fear, the company is repurchasing close to $150 million to $200 million per quarter. It’s a cash machine. Just my opinion.
Impressive performance!
I just subcribed, looking forward to your updates
Yes, the only two companies I’ll consider owning in this space are $DECK and $CROX, both with best-in-class management. I do own $Crox
Great, would love to hear your feedback. It does seem like they are taking market share from Nike for sure!
Interesting, what’s your opinion on Hoka?
Interesting, I just bought their Cloud-Monster sneaker. I was looking for discounts around holiday time but couldn’t find any. I ended up paying $175. However, the other models did have more sales. What margins are they aiming for?
Great report. Just curious why are you short $ONON just because of valuation? The buisness seems to be doing very well.
I can’t help you get over the FAD concern, but the fact is, Crocs has been around for over 20 years and has only grown more popular. It’s reasonably priced and has genuine utility, especially for kids and people who work on their feet. As long as the management maintains the brand value and avoids dilution, as seen in the early 2000s, they should be fine. The current management is likely best in class when it comes to branding and marketing.
Check out this article from 2009 highlighting Crocs’ struggles at that time: [https://ries.typepad.com/ries_blog/2009/10/how-crocs-crashed.html#:~:text=In%202008%2C%20the%20wave%20came,a%20huge%20surplus%20of%20shoes].
Regarding HeyDude, they definitely overpaid, but the brand is still in the early stages of growth and penetration. Many people aren’t even aware of Hey Dude, and early-stage growth problems resulted from changes in wholesale channels. I understand why Crocs acquired the brand; it has significant potential for expansion with a broader selection, as seen in their new designs like boots shoes etc.
The Crocs brand itself is worth more than the entire current market cap without growth. HeyDude, even without growth, is generating $100 million to $150 million of EBIT. They could sell it tomorrow for at least $1 billion.
As long as the market overcomes its fear, the company is repurchasing close to $150 million to $200 million per quarter. It’s a cash machine. Just my opinion.