Crocs Raises Guidance, Shares Find Bottom

| About: Crocs, Inc. (CROX)

Shares of footwear retailer Crocs (NASDAQ:CROX) rose 4.3% on Tuesday and continued their march higher after the company announced positive sales numbers for the fourth quarter and full year.

Here are the numbers that the company gave.

  • Fourth quarter revenues to be at the high end of the $200 to $205 million range given. Analysts currently expect $204.5 million in revenues.
  • Full year revenues will exceed $1 billion. Analysts currently expect $1 billion.

Crocs is thrilled that they will have a billion dollar revenue year in less than ten years of existence. This isn't a total surprise, but it still is about 27% growth in revenues year over year, which means that the growth story is still in tact.

The news is positive because it isn't a warning for Crocs. Last quarter, they gave news like this before earnings, and it was bad. The company lowered guidance for the third quarter and the stock dropped 40%. At least we know now that it was just a bad quarter, and not a trend, as they are coming in around or above expectations this quarter.

Crocs shares have gotten rather cheap lately, especially after that warning in the previous quarter. They currently trade for just 11 times fiscal 2012 earnings, a significant discount to other names in the industry like Deckers Outdoor (NASDAQ:DECK), maker of the UGG brand. It also has a lower forward P/E than other footwear retailers such as Steven Madden (NASDAQ:SHOO), Nike (NYSE:NKE), and Skechers (NYSE:SKX). Although they aren't all true competitors, they do compete for your footwear dollar, and Crocs is the cheapest of the bunch.

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Now, we've seen good things recently from Nike, which is now trading near all-time highs. Crocs is well off its all time highs, and it will take a while to set new ones. This business line appeared to be a fad, but the company came back from the dead a few years ago. The growth is still there, and today's news shows you last quarter's troubles were a one-time issue. Crocs' valuation makes it very attractive at these levels given the growth, especially when compared to its competitors.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.