Crox Does NOT Blow It

To build off an a post I made earlier in the week, I find the story of crocs fascinating. They deservedly were crushed after guiding lower. Management has messed up big time before. However, earnings just came out and it seems management has not shot themselves in the foot. They pretty much have reiterated everything that was already known. 3Q Rev was $275M, EPS $0.33. Next quarter, they are expecting revenues of $200M-$205M and EPS of $0.03-$0.05. This is pretty much inline. So, at the end of the day, nothing really is new. One thing I believe is important to note is that I have not seen much attention to is their growth amid all this negative commentary. Last 4Q, the firm lost $0.14 on $179M revenue. This guidance (4Q11 $202.5M/$0.04) is very nice growth from last year at this time. Backlog (see below) has also significantly strengthened. Thus, it is my opinion that this recent sell off is overdone and the stock will trade higher, as buy side pumps money into laggards going into year end. I’ll be watching the stock to firm up a bit technically before taking a stab.

Currently, I am long cien, goog, nflx, wprt, zagg, and tza (thus being short – – – just for a day or two because very overbought). I am short gmcr.

Summary:

* Q3 EPS $0.33 vs est $0.32

* Q3 rev up 27.5 pct to $274.9 mln

* Gross Margin: 53.5% vs. St. 53.1%

* Sees Q4 EPS $0.03-$0.05 vs est $0.05

* Sess Q4 rev $200 to $205 mln vs est $204.40 mln

* Backlog: +30.3% to $296.8M as of 9/30/11 vs. $227.8M as of 9/30/10

* “Our fourth quarter guidance reflects recent softness in our European business due to the current macroeconomic conditions. While we expect Europe to remain challenging as we move into 2012, we are pleased with the strength of our spring 2012 backlog in Asia and the Americas.”

* “We believe strong 33% growth in our consolidated spring backlog sets us up for continued growth into next year. The response from retailers to our new product introductions has been very positive in Asia and the Americas and we believe it will provide us with good momentum to start the New Year.”