), Zacks Rank #5 (Strong Sell), manufactures and markets footwear
products. The company recently disappointed investors
reporting June quarterly profits of 48 cents per share against a
Zacks Consensus Earnings Estimate of 64 cents. The 25%
negative earnings surprise contributed to a sharp price decline,
and has left the stock struggling near a six month low.
Earnings estimates are falling:
Earnings estimates for Crocs have declined sharply over the past
thirty days and paint a negative picture. The Zacks Consensus EPS
Forecast for 2013 has declined 37 cents to $1.02, while Zacks
Consensus EPS Forecast for 2014 has dropped 39 cents to $1.22.
The graphic displays the downward trend in analyst
There have been no estimate increases for either 2013 or 2014
over the past 30 days and seven estimate decreases over the same
Gross margins are under pressure:
Gross margin has been eroding in recent quarters. It has
declined from 54.6% in the quarter ending September 2012 to 53.7%
in the quarter ending June 2013. Gross margins were the lowest
A decline in the order book of 6.7% and a weak consumer
environment in the U.S. and Europe look to be generating headwinds
to the outlook for sales and gross margin.
Valuation is not expensive at 12.4 times forward 12 month
earnings, but the PEG ratio is 1.00 and over the 10 year median of
0.90. Concerns over profit growth and margin erosion may
justify a depressed looking PE ratio.
Those looking for exposure to the apparel industry may want to
) Zacks Rank #1 (Strong Buy). Unlike Crocs, earnings estimates for
Hansbrands are being revised upward. Gross margins are also
expanding, and near the top end of the historical range.
When it comes to Crocs, this shoe does not seem to fit into your
CROCS INC (CROX): Free Stock Analysis Report
HANESBRANDS INC (HBI): Free Stock Analysis
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