During the pandemic, Crocs broke all sales records. However, investors fear that the sharp rise will be followed by a strong decline.
Locked at home and leading a quarantine lifestyle, consumers willingly acquired comfortable everyday wear Crocs shoes, thanks to which its sales jumped at times, breaking all possible records. Needless to say, these “rubber slippers” have even been dubbed “pandemic shoes.” As a result, for the fourth fiscal quarter, the company's net income rose to $183.3 million, or $2.69 per share, from $19.9 million and 29 cents per share, a year earlier.
However, such stunning growth figures did not convince investors who are starting to sell their shares. As a result, the value of the company's securities began to gradually decline. Thus, the value of shares last Tuesday fell immediately by 3.8% to $80.01 per share.
The fact is that investors are afraid of a decline in consumer interest in Crocs as quarantine restrictions are lifted and a return to the usual way of life. There are unfounded fears that the boom in sales was only a short-term phenomenon caused by the pandemic, and a noticeable decline will follow in the foreseeable future.
However, Crocs CEO Andrew Rees is more optimistic. He noted the fact that Crocs sales were growing well before the pandemic, which just spurred them on, and the company's shoes were always in trend. It was the latter that helped her to survive the difficult year of 2020 well - consumers began to buy not just comfortable shoes for wearing at home, but chose a well-known brand.
In addition, during the pandemic, many new consumers got acquainted with Crocs products, many of which may well remain its loyal fans. The company is currently working on what Crocs will be able to offer consumers going forward, Rees said. The market for clogs that are so comfortable to wear every day (valued at $330 billion worldwide) has shown its resilience to challenges like the pandemic. But this does not mean that you can just relax and rest on your laurels.