you_can_call_me_Al

Crocs Crushes the Bottom Feeders

The original Crocs could certainly be considered a fad, but their comfort is undeniable. The expansion of the line into non-ugly models was also encouraging. Finally, growth for new models in the U.S. was (is) a possibility, and international growth for all models seemed to actually have been happening. These are the traditional points that longs use to counter the short "it's a fad" argument. Recent sales have settled the argument, and now we know who was right. Full disclosure: I wasn't.

What is now confusing is that no one has presented what should be the new short argument: management appears not to have a handle on their business.

You mentioned the size of the changes to estimates, but did not go nearly far enough. All the arguments about potential product demand can only go so far, and none of them are as important as management credibility. This is the second quarter in a row where shareholders have been blindsided. It's doubtful that professional money managers will be there for a third.