What Happened?
Shares of footwear company Crocs (NASDAQ: CROX) jumped 3% in the morning session after the announcement of a new collaboration with Krispy Kreme (NASDAQ: DNUT) and a broader rally in the consumer retail sector.
The footwear company teamed up with the doughnut chain to launch a limited-edition "Krispy Kreme x Crocs Classic Clog," which is set to be released in early August. This type of brand collaboration often generates significant buzz and consumer interest, which investors viewed positively. The move also came amid a strong day for the consumer retail sector. The market was buoyed by an unexpected rebound in U.S. retail sales, which signaled that consumer spending remained resilient despite economic uncertainties. This positive macroeconomic data lifted sentiment for many retail-focused stocks, including Crocs, as it suggested continued healthy demand for consumer goods.
After the initial pop the shares cooled down to $108.77, up 2.3% from previous close.
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What Is The Market Telling Us
Crocs’s shares are quite volatile and have had 15 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock gained 21% on the news that the company delivered solid fourth-quarter 2024 results, surpassing analysts' revenue, EPS, and EBITDA estimates. Revenue increased by 3.1%, led by a 4% rise in the core Crocs brand, while HEYDUDE sales remained flat. Strength in direct-to-consumer sales, particularly in China and North America also helped offset weaker wholesale performance. Guidance for the next quarter was underwhelming, with projected revenue expected to decline by 3.5%, weighed down by softness in HEYDUDE sales. However, full-year EPS guidance exceeded expectations, offering some reassurance to investors. Overall, this quarter wasn't perfect, but it was quite solid.
Crocs is down 1.1% since the beginning of the year, and at $108.77 per share, it is trading 26.2% below its 52-week high of $147.40 from September 2024. Investors who bought $1,000 worth of Crocs’s shares 5 years ago would now be looking at an investment worth $3,025.
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