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Bull of the Day: Crocs (CROX)

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Crocs, Inc. (CROX - Free Report) has turned around its earnings picture in 2018. This Zacks Rank #1 (Strong Buy) is expected to see another bullish year next year, with analysts projecting triple digit earnings growth.

Crocs makes footwear for women, men and children. Their signature is the Croslite material, a proprietary, molded footwear technology that is included in every pair of Crocs' shoes.

Another Beat in the Third Quarter

On Nov 8, Crocs reported its third quarter results and beat the Zacks Consensus Estimate for the third quarter in a row. Earnings were $0.07 versus the consensus of a loss of $0.02.

Revenue rose 7.3%, or 9.3% on a constant currency basis, to $261.1 million despite operating fewer stores and other business model changes which wiped away $15 million in sales.

E-commerce was up 23.2%, wholesale grew 9.3% and retail comparable store sales jumped 15%.

Gross margin also rose by 250 basis points year-over-year to 53.3%.

Thanks to expense discipline and higher margins, cash and cash equivalents rose 13.9% to $203 million from $178.2 million as of Sep 30, 2017.

The company has also tackled its inventory issues, as inventory declined 16.1% to $117.7 million from $140.3 million at the end of the third quarter of 2017.

Estimates Move Higher for 2019

The analysts liked what they heard about the quarter and the forward guidance.

2 estimates were raised in the last 60 days for 2018 pushing the Zacks Consensus Estimate up to $0.45 from $0.25.

That's earnings growth of 2,350% as the company lost $0.02 per share in 2017.

What an amazing turnaround.

It's expected to continue in 2019 as the company continues with its strategy to reduce store count but grow revenue from e-commerce and wholesale growth.

It forecasts its 2019 revenue to rise mid-single digits over 2018.

The analysts have raised 2019 estimates as a result with 3 revising their estimates higher over the last month. That has pushed the Zacks Consensus Estimate up to $1.05 from $0.81 during that time.

That's another earnings gain of 135.2%.

Big Winner in 2018

Crocs shares have soared in 2018's weak market, jumping 47% year-over-year.



That's the opposite of footwear competitor Skechers (SKX - Free Report) which has fallen 41% year-to-date.

Shares are no longer cheap. They trade with a forward P/E of 56.

But for investors looking for a growth name in the footwear industry, Crocs is one to keep on the short list.

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