Investment Thesis: Crocs and its Inconsistencies

No! This post is not about my Crocs Investment Thesis. The company published a 114 pages Presentation on September 30 containing almost everything you need to know about Crocs ($CROX). Like the classic clog, some people will like $CROX as an investment, others will hate it, and most will remain neutral. I included the presentation at the bottom of this post.

This post is about the inconsistencies I uncovered after attending the Crocs Investor Day. On September 30, $CROX guided Q3 revenues lower by $10MM due to the impact of $4MM in foreign exchange (FX) erosion and $6MM of shipment holds in China.

The company also announced that it bought back $30MM of stock in Q3 compared to $23MM in Q2. Isn't this a bit aggressive considering management had visibility into a reduced performance throughout the quarter? The FX and China issues didn't arise the morning of the Investor Day.

On August 5th, Greg Ribatt, Crocs' CEO, bought $150,000 of stock, increasing his position to 701,087 shares and on August 24th, Andrew Reese, President and COO, purchased $44,000 of stock, increasing his position to 504,523 shares. Ribatt and Reese have been aggressive buyers throughout the year.

It will be a worthwhile pursuit to monitor the stock purchase activities during Q4. Unfortunately, investors will have visibility into repurchase activities only well into 2016. Management might hold back purchasing stock for their own accounts and let the company take advantage of much lower stock prices following the reduced guidance without alerting the market with Insider Form 4 filings. 

Of Interest: Crocs Investor Day - Spring Summer 2016

Michael Bigger. Follow me on Twitter and StockTwits. I own a large position in Crocs since 2009. Take my opinions about the company with a grain of salt.

Crocs 2015 Investor Day Presentation

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