Crocs, Inc. (CROX) stock has been making waves in the market, surging over 60% in the past year. This impressive performance has comfortably outpaced the Consumer Discretionary sector’s 18.5% return and the Zacks Textile – Apparel industry’s 4.8% growth during the same period. CROX’s shares have also climbed higher than the S&P 500 index’s 34.3% appreciation in a year. Currently trading at $136.54, CROX is just 17.4% away from its 52-week high of $165.32, reached on June 20, 2024, but still trading at an impressive 84.5% premium to its 52-week low.
What’s driving this remarkable rally? It’s a combination of strategic efforts and strong consumer demand. The company is benefitting from robust sales across its Crocs and HEYDUDE brands, fueled by effective pricing strategies. The popularity of clogs, sandals, and personalized options is providing a significant boost. Crocs has successfully built various franchises, strategically expanding into new usage occasions to encourage both new and repeat purchases. The sandal category has seen a particular surge in popularity as consumers have embraced its innovative designs.
Management is also banking on personalization as a major consumer trend, with plans to significantly expand the penetration of its Jibbitz charms in 2024. This includes increasing their presence in digital and wholesale channels, continuous product innovation, and enhanced market capabilities. Crocs is evolving its partnership model to deepen engagement and foster consumer love. For example, they’ve introduced new HEYDUDE collaborations with iconic brands like Corona, featuring a four-piece collection with Wally, Wendy, and Hudson Styles. The company’s recent partnership with Lee, called Denim and Dudes, marks the first HEYDUDE collaboration with global reach.
Crocs is firmly on track with its long-term strategy, implementing key initiatives to deliver sustainable growth. This strategy focuses on three key areas:
1.
Igniting Icons:
Enhancing brand awareness and relevance through marketing campaigns and strategic partnerships.2.
Investing in Tier 1 Markets:
Driving market share gains in key markets through talent acquisition, marketing efforts, digital initiatives, and retail expansion.3.
Diversifying the Product Range:
Attracting new customers by offering a wider selection of products and styles.Analysts are echoing this optimism. The Zacks Consensus Estimate for CROX’s earnings has been steadily rising for both 2024 and 2025. In the past 30 days alone, the consensus estimate for earnings per share has been revised upward by 0.3% to $12.88 for 2024 and 0.2% to $14.00 for 2025.
Crocs is not just benefiting from strong performance; its valuation also adds to its appeal. The stock is currently trading at a forward price-to-earnings (P/E) ratio of 9.91, which is lower than the industry average of 12.68 and significantly below the S&P 500 index’s 21.69. This indicates that CROX’s stock is attractively priced compared to its peers and the broader market.
Given its strong strategic efforts, robust consumer demand, positive earnings revisions, and compelling valuation, Crocs appears to be a promising investment opportunity. The company currently holds a Zacks Rank #1 (Strong Buy), underscoring its favorable outlook.
Other Solid Picks:
Besides Crocs, here are three other top-ranked stocks with promising prospects:
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G-III Apparel Group (GIII):
This company is a leading manufacturer, designer, and distributor of apparel and accessories under licensed brands, owned brands, and private label brands. G-III Apparel boasts a Zacks Rank #1 (Strong Buy) and has consistently exceeded earnings expectations, with a trailing four-quarter earnings surprise of 118.2% on average. The Zacks Consensus Estimate for GIII Apparel’s current financial year sales projects growth of 3.3% from the year-ago period.*
Royal Caribbean (RCL):
Royal Caribbean, a major cruise line operator, carries a Zacks Rank #2 (Buy) and has a trailing four-quarter earnings surprise of 18.5% on average. The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates a robust increase of 18.2% and 70.9%, respectively, from the year-ago levels.*
lululemon athletica (LULU):
This yoga-inspired athletic apparel company also holds a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for lululemon athletica’s current financial year sales and EPS suggests growth of 9.2% and 9.8%, respectively, compared to the year-ago figures. LULU has a trailing four-quarter earnings surprise of 7.9% on average.Overall, Crocs’ strong performance, combined with its compelling valuation and positive analyst sentiment, makes it a compelling investment option in the current market.
