Analysis of Croc Company

Executive Summary

Crocs Inc. is a global leader in innovative and casual footwear for men, women and children. Crocs Inc. offers several collections of shoes with over 250 styles for every lifestyle trend. The shoes offered by Crocs Inc. provide comfort, light, and support for all occasions and all seasons. All Crocs branded shoes are manufactured with the material CrosliteTM; a property and revolutionary technology that produce shoes cum slippers that leave no marks, odor, and perfectly fit feet. Despite, facing financial difficulties in the 21st century, Crocs Inc. enjoys an international presence and the products are currently being sold in 90 countries.

Table of Contents

Executive Summary2

Discussion4

Background4

History4

Financial Highlights7

Comparison with Industry Averages11

Future12

Share Price Movement12

Relative Valuation12

Earnings Strength12

Recommendation13

References14

Discussion

Background

Crocs Inc. (NASDAQ: CROX) is an American shoe designing, manufacturing, distributing, and selling company founded in 2002. The company deals in a product which is an extension of traditional footwear.

The most striking attribute is the fact that the US company markets plastic shoes which are available in bright colors. In addition to light green, red, yellow and turquoise; consumers can purchase more subtle colors. Up to 26 colors are available for the main models. Crocs come in a variety of styles. They are usually manufactured in company-owned facilities, located in Canada and Mexico, as well as outsourced contract manufacturers in Italy, Romania and China. Some of the well-known brands are Styles Beach and Cayman. Crocs also expanded into fashion accessories. It has launched a line of handbags that are also produced in a wide range of colors. Crocs also recently entered the market with golf shoes (Ross & Ross 2008).

Crocs shoes are made ??of plastic foam, which is derived from ethylene-vinyl acetate and were originally designed to be worn at the beach or boat. Since the invention, Crocs has been successful beyond these activities and they are now brought in all sorts of daily activities. Children, especially, are largely attracted by the colorful patterns and simple shapes. Despite the childish appearance of the product, this method was then extended to adults and these shoes are increasingly worn by movie and television stars (Rees 1995).

History

In July 2002 a group of three friends, Lyndon Hanson, Scott Seamans and George Boedecker founded Crocs Inc. in Boulder, Colorado. The idea was born on a sailing trip in the Caribbean, when the three friends were travelling and felt the need for comfortable and soft shoes with nonslip soles that leave no marks on sailboats. Lyndon Hanson was a manager in the computer industry, while Scott Seamans and George Boedecker was production expert who worked in the food distribution industry. They were approached by a chemist, Ron Snyder, who invented a new material from the desired shoes, named CrosliteTM. Ron Snyder is now the President and CEO of Crocs Inc. (Palepu & Healy 2008).

With their slip and abrasion resistant soles and waterproof resin foam, Crocs were originally designed for wet areas and boating. The shoes sold the first 1,000 pairs of the model Crocs Beach at the Boat Show in were ...