Crocs, Inc. (NASDAQ: CROX), an American company, based in Colorado and a famous producer of the ugliest shoes in the world today disclosed First Quarter 2020 Results. Soon after this announcement the price per share went down 6%.
Investors seem to be unhappy with the results, but I am not sure why? According to Crocs Americas Revenues Increased 14.4% and E-Commerce Revenues Rose 15.8% compared to First Quarter 2019.
“Amidst unprecedented market conditions globally, our total revenue held up well with exceptional performance in our Americas and e-commerce businesses that was overshadowed by COVID-19 related store closures. Despite this recent softness, Crocs remains a strong, vibrant brand that is very well positioned. In the near-term, we have no liquidity concerns and have taken quick action to ensure we will be strongly cash flow positive for the remainder of the year. Over the long-term, we are confident we will restore our momentum in 2021 and continue our positive growth trajectory for years to come.- said Andrew Rees, CROX President and CEO.
The key takeaways from this financial report are pretty much summed up in the statement by Mr. Rees.
- The are sure they will restore the momentum in the year to follow
- No liquidity problems whatsoever
- Total revenue -no problems with it
- Crocs remain a strong brand. Yes, we sure hate seeing people wearing crocs in the streets but the point is, the rubbery shoe is selling for years now, it is not a fad.
Back in March we all had a unique opportunity to purchase CROX stocks for $10 but many of us failed. The price bounced to over $20 per share and it is now selling slightly above $20.
But this is still a great price as Crocs seem to be holding all the strong cards in this poker game. If we look at the balance sheet you will see why I think so:
•Cash and cash equivalents were $107.0 million as of March 31, 2020, that is only $1M lower compared to December 31, 2019
•Inventory increased to $195.8 million as of March 31, 2020, compared to $172.0 million as of December 31, 2019. This is both good and bad. Good because they have enough goods to sell once the crisis is over and bad because some of the stock did not sell as expected. Due to COVID of course.
•Capital expenditures during the three months ended March 31, 2020 were $16.1 million, compared to $10.6 million during the same period in 2019. Nearly all of the expenditures this quarter related to accrued capital expenditures in the fourth quarter of 2019 that were paid this quarter for the relocation of the Company’s new corporate headquarters.
On April 7, when I previously suggested that CROX is a strong buy, the price per one CROX share closed at $18.58. Now, two weeks later, even with a “bad day” the price is $21.93. I still think CROX have a good future and is definitely one of the better non-paying (talking about dividends) apparel stocks at the moment.