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Crikey! Crocs, Inc. (CROX) Isn’t a Crock

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Crocs, Inc. (NASDAQ:CROX)Not too long ago, Crocs, Inc. (NASDAQ:CROX) took the world by storm. Clogs became a household name, and the stock sprinted higher. Unfortunately forCrocs, Inc. (NASDAQ:CROX), that kind of momentum is now a distant memory. For example, the stock has depreciated 11% over the past year. And clogs aren’t the hottest thing in footwear anymore. On the surface, it looks like the stock should be avoided at all costs, but the story runs deeper.

Cold here, hot there

Weak consumer spending in the United States, Europe, and Japan, has hurt sales. Despite these trends, Crocs, Inc. (NASDAQ:CROX) has shown positive comps in the Americas, Asia, and Europe. In the Asia-Pacific region, Crocs continues to exceed expectations.

This is a very important point, because if you live in the United States and you don’t wear Crocs, then it most likely seems like a fad. However, if you live in the Asia-Pacific region, you wouldn’t look at it that way at all. This also helps explain why revenue and earnings have consistently improved over the past three years.

You should also keep in mind that Crocs, Inc. (NASDAQ:CROX) has moved well beyond clogs, offering different types of croslite footwear. (Crostlite allows for softness, comfort, a light weight, and odor-resistance.) Globally, there has been strong demand for its Huarache, A-Leigh, Beach Line Boat, and Retro brands.

While everything sounds fine and dandy so far, not all is well on every front. For instance, at the end of June 2013, the backlog declined 6.7% compared to one year earlier. This is likely in the anticipation of weaker fall spending, mostly based on a weaker-than-expected spending environment in the spring.

Contrary to popular belief, Crocs, Inc. (NASDAQ:CROX) has future potential. This company is growing, and it has only been around for 11 years. Furthermore, the balance sheet is in excellent shape, which will allow for more opportunities. Unfortunately, the stock has performed poorly, and Crocs must erase the reputation generated from its own past success — Crocs, Inc. (NASDAQ:CROX) is about more than just clogs.

Other options

Deckers Outdoor Corp (NASDAQ:DECK) is all about uniqueness and developing niche brands. Deckers has seen top-line growth over the past three years. Though Deckers missed on the top line in the second quarter, its loss was narrower than expected.

Deckers Outdoor Corp (NASDAQ:DECK) is dealing with softness in its UGG, Teva, and Sanuk brands. On top of that, it’s dealing with increased costs for sheepskin. On the positive side, Deckers Outdoor Corp (NASDAQ:DECK) is constantly developing new products in order to help drive growth, it’s looking to expand in Asia, e-commerce sales just jumped 34.2%, and management upped its outlook for 2013. Revenue growth is now expected to be 8% versus a previous expectation of 7%, and EPS growth is now expected to be 8% versus a previous expectation of 5%.

Skechers USA Inc (NYSE:SKX) has also enjoyed tremendous e-commerce growth. In this case, e-commerce sales increased 37.2% in the second quarter. And Skechers USA Inc (NYSE:SKX) is also enjoying strong international sales, with the most demand stemming from China, Chili, and Canada. As expected, Europe has been the weakest performer. However, despite that negative, comps increased 16.8% internationally, as well as 16.5% overall.

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