Back to top

Bear of the Day

Crocs (CROX - Snapshot Report), Zacks Rank #5 (Strong Sell), manufactures and markets footwear products.  The company recently disappointed investors reporting June quarterly profits of 48 cents per share against a Zacks Consensus Earnings Estimate of 64 cents.  The 25% negative earnings surprise contributed to a sharp price decline, and has left the stock struggling near a six month low.

Earnings estimates are falling:

Earnings estimates for Crocs have declined sharply over the past thirty days and paint a negative picture. The Zacks Consensus EPS Forecast for 2013 has declined 37 cents to $1.02, while Zacks Consensus EPS Forecast for 2014 has dropped 39 cents to $1.22.  The graphic displays the downward trend in analyst revisions.

There have been no estimate increases for either 2013 or 2014 over the past 30 days and seven estimate decreases over the same period.

Gross margins are under pressure:

Gross margin has been eroding in recent quarters.  It has declined from 54.6% in the quarter ending September 2012 to 53.7% in the quarter ending June 2013. Gross margins were the lowest since 2010.

A decline in the order book of 6.7% and a weak consumer environment in the U.S. and Europe look to be generating headwinds to the outlook for sales and gross margin.


Valuation is not expensive at 12.4 times forward 12 month earnings, but the PEG ratio is 1.00 and over the 10 year median of 0.90.  Concerns over profit growth and margin erosion may justify a depressed looking PE ratio.


Those looking for exposure to the apparel industry may want to think about Hansbrands (HBI - Analyst Report) Zacks Rank #1 (Strong Buy). Unlike Crocs, earnings estimates for Hansbrands are being revised upward.  Gross margins are also expanding, and near the top end of the historical range.

When it comes to Crocs, this shoe does not seem to fit into your portfolio.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%