Crocs » CROX // Consumer Discretionary Sector // Strike Price = $xx {subscribe}
// THESIS
Somehow Crocs became for everybody. Have you got yours yet? Do you Jibbitz them?
Crocs started out in 1999 in Colorado and seemed to be for children to wear in warm weather. Now you see trendy 30 year olds wearing them. Everywhere. And not so trendy 60 year olds.
Fugly but comfortable shoes seem to have gone mega mainstream since Covid. Crocs are expanding their range by Crocifying all kinds of shoe styles. They are cross-marketing with hipster designers and businesses and going to Asia. They also doubled down on the fugly concept and bought HEYDUDE, the ultimate Dad shoe.
The company has performed very impressively the past 5 years or more, but the expected rate of growth is now decreasing, even though their product innovation is increasing. The change in the pace of growth is a problem on Wall St. Can they change that narrative? Does it matter in the long run? Ultimately it’s about FCF growth for a mature business. Nike has a higher PS multiple and only 7% expected revenue growth for the next decade.
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