Crocs And Deckers: Gaining Footwear Market Share And Beating Competitors

Summary

• Crocs and Deckers are leaders in the global casual footwear market which have few powerful competitors and generate very high returns on capital due to their asset-light model.
• Both benefit from the long-term secular shift away from formal uniformity towards the practical, casual, and comfortable footwear through which consumers can express their individuality.
• Since the onset of the COVID-19 outbreak, Crocs has delivered very strong growth and Deckers has maintained its steady growth trajectory.
• The growth is likely to continue with the rise of the global middle class, as Asian economies like China re-open, and consumers opt for higher quality footwear.
• Crocs is attractively valued provided my major concerns do not come true (long-term accumulate); Deckers is fairly valued given its lower growth rate (hold).

GordonsLife

Introduction

Crocs Inc (NASDAQ:CROX), and Deckers Outdoor Corporation (NYSE:DECK) compete in the global casual footwear market.

Crocs offers high quality, affordable, and personalizable clogs, sandals, and other products under the Crocs brand; it recently diversified its portfolio by acquiring HeyDude, a fast growing, value-oriented Italian

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.