Jeremy Elliott

Crox Could Rise on Piper's Inventory Comments

The comparisons to the iPod are close, except that I'd argue that iPods (and Macs over Samsungs, for that matter) do deliver a much more pleasurable user experience dollar-for-dollar than competitors. To say there's no moat on Crox and that models should dump 40% of future sales growth to substitution from knock-offs is to to say "I don't own a pair". There's something real about Croslite--it's not just hype. The knock-offs make you feel like a broke-back hooker looser. To say growth is dead and it's a fad is to say "I've never traveled overseas and I'm an ugly American wearing blinders". The is an international story now, beginning last Q when Int sales trumped Domestic. Think you got an eye for international fashion? Shorts want to absolutely crush this stock because they absolutely hate the appearance of the shoes--they let their contorted American sense of fashion muddy the strong fundamentals that completely support a PE double of what it is today. And, if you listen to the last call, Just a Hick, you'd have heard a detailing of how Mgmt has resisted the cheap-growth temptations, such as leasing all facilities. No, my short friend, they have purchased a great many of their warehouse and distribution facilities so that margins will continue to improve. I feel like were rushing into Iraq here looking for WMD again--all this made-up negative hype that's completely unsubstantiated. Who's drinking whose own koolaid when the fundamentals continue to blow all the shorts nay-sayings out of the water, Q after Q? Inventory? CROX has seen sales lost to depleted stock and margins cut due to a need for overnight air time and time again after demand has somehow exceeded even their highest of projections--they SHOULD be inventoried up over 40%. The last 5 QTRs has seen sales lost to depleted stock events, but the high inventories are the only string that the fashion-wary shorts have to cling to on this call. Could you imagine being wrong about a stock and about a sense of style at the same time?