Crocs gets bit, but guidance is strong

Crocs "disappointed" the street by reporing EPS of $0.66, but that's in line rather than an actual decline. Still, I'm feeling the bite as the stock is down more than $11 from the shares I picked up an hour ago. I'm holding, though. Why?

• Crocs "executed several important initiatives that have strengthened our operating platform, namely the opening of a new 320,000 square foot European distribution facility that will allow us to better support our future growth in the region," CEO Ron Snyder said. The buildout of this facility is key, and obviously the cost cut into the Co's bottom line. Not a whole lot different from Google's mass hiring of engineers in Q2, and that led to a big selloff of stock by the street. GOOG has rebounding rather nicely since then, I'd say.

• Raised guidance for Q4. "For the year ending December 31, 2007, Crocs raised its guidance. The Company now projects revenues to range from $820 to $830 million and net income per diluted common share of between $1.94 and $1.98."

• Raised guidance for 2008. Snyder: "The Company also introduced fiscal year 2008 guidance. Crocs currently anticipates revenues and net income per diluted share toincrease between 35% to 40% over the projected 2007 levels. Mr. Snyder concluded, "Our year-to-date performance has been marked by significant gains in sales and earnings, robust international expansion, a number of high-profile licensing agreements, and the continued build out of our global infrastructure. Even as we achieve record results and reach important objectives in our financial, strategic, and operational development we are confident that we are positioned well for continued growth in 2008."

That's a Croc!

Bulls are laughing and bears are crying today. CROX busted through $60 to a mid-day high of 61.99 before settling at 59.98 today on news of a brand new apparel line.

The new line for men and children will debut at MAGIC Marketplace in Las Vegas Aug. 27-30. Pretty cool stuff. Haven't seen a pic yet, but the video footage shows a hybrid of Crocs Caymans and other more traditional material. I was up late today, probably worn out a bit from a deluge of work in the past few weeks. It was superb to wake up at 9 a.m. Hawaii time to find CROX up nicely on an overall down day.

The stock has rebounded with conviction since hitting that recent low of 44 two Thursdays ago. As volatile as the stock is, the products are resistant to a credit crunch, I believe. The global market is still new to Crocs, so I'm staying long for quite some time. CEO Ron Snyder will continue to acquire smaller companies, and CROX could emulate the Flextronics approach to growth (1998-2000, the stock there went from 11 to 40). Or CROX could sustain growth much longer. The distribution system is superior and Snyder and his BOD are on a mission.

Crocs keeps moving forward

Good news for CROX shareholders on two fronts this morning.

The Co announced an agreement to acquire Bite Footwear for as much as $3.5 million should Bite hit earnings targets. Crocs will implement its proprietary Croslite into Bite's products. Also, at the WSA trade show in Las Vegas, Jibbitz will unveil a new line of customizable hand bags and messenger bags. Jibbitz is entirely owned by Crocs.

As usual, Crocs CEO Ron Snyder and his board aren't about to sit still. Ever. They're in acquisition mode 24/7, and Crocs will continue to increase earnings thanks to a highly effective distribution system.

CROX is trading up 1.4% to $56.51 in pre-market action.

Pupule Paul is long CROX.

Crocs on the move today, as expected

Just 30 minutes into the session, CROX is up 4% and climbing after getting an upgrade from a minor brokerage house this morning.

The upgrade, though, is only one reason why CROX is up $2 to $47 so far today. The other, as I wrote recently, is that earnings is closing in. Today, Monday, July 23, is precisely the day when I figured a lot of investors and big boys would be marching back in for more shares. Crocs has a history of blowing out the numbers, and Q2 is a busy one for the Co.

I still think the stock will be volatile this week, but wind up around $50-53 on the eve of earnings. There are still doubts since key execs like CEO Ron Snyder sold significant shares during the quarter. As a result, short interest is 32% and bears drove the price down from $49 to $44 last week.

I also still believe that Snyder and his BOD are dead set on building a monster as quickly as possible, given the background of some board members who came over from Flextronics. Using an acquisition-crazed approach, FLEX ran from $11 to $40 between 1998 to 2000. The blueprint is in effect with CROX, as well.

Does this mean that year 2 of the blueprint is underway? Perhaps. If that's the case, investors are at least a year away from seeing Crocs at its peak.

Disclaimer: Pupule Paul is slightly long CROX.