The Market Hick

Crox Could Rise on Piper's Inventory Comments

Piper must be drinking the same koolaid. Inventory has gone sky high to almost 40% of total assets.The turnover ratio is going to be terrible going forward. Plus if they see any sort of sales slowdown then the margins will compact like you won't believe-I think gross margins will hit the mid thirties for this year.Their cash generation doesn't even begin to match the net income they book.They employ aggressive accounting practices and lease all their facilities.This means if a cash crunch comes, they have nothing to borrow against- and I do think a cash crunch is going to hit these guys this year.Bottom line,the stock is heading south of $10.