Crocs’ $2B Acquisition Trips Up Company After Banner Pandemic Performance
Is the Crocs comeback already over? The cushy foam shoes, which dominated the streets (and markets) during the pandemic, gained a surprising fandom on Wall Street — with its stock hitting all-time highs by the end of 2021, just before joining growth stocks on a hike off a cliff. Since then, has more than doubled from its 2022 lows, but investors are now growing impatient with this nostalgia-drenched footwear giant.
- Crocs dropped over 17% on Tuesday, marking its worst day in a year, after taming growth expectations to the bottom of its 3-5% range.
- The company’s growth was pulled down by weaker sales from HeyDude, the brand it acquired in 2022 for $2.5B, which saw a 15% year-over-year decline, much worse than anticipated.
Safety concerns: Though Gen Z and Alpha polls rank Crocs among their favorite footwear brands, some schools have banned them over “safety concerns” as kids continue tripping in the clunky shoes. Similarly, investors are stumbling over Crocs’ valuation, with its P/E ratio falling to 8.5x, suggesting expectations of a future decline. Yet, that hasn’t shown up in the latest earnings: Crocs reported $1.11B in revenue and $228M in income for Q3.
