When Crocs (CROX) co-founders Scott Seamans, George Boedecker Jr., and Lyndon “Duke” Hanson unveiled their distinctive foam shoes at the Fort Lauderdale Boat Show in 2002, their sales pitch was focused on functionality for boaters – and after selling ~1,000 pairs in three days, they had early reason to believe that Crocs was a business worth investing behind (“designed to perform on land and sea, like crocodiles - hence their name”).
But it quickly became clear that demand for Crocs was much broader: by 2007, Crocs was selling ~130,000 pairs each day. Its revenues, which were ~$14 million in 2004, rose to nearly $850 million three years later (in 2007).
Following an early 2006 IPO, Crocs became a market darling: relative to a listing price of $10.5 per share (adjusted for the two-for-one stock split in June 2007), the stock was up ~7x over the next 18 months. But then the shine wore off as the business took a nasty turn, evidenced by the 2008 financials: as opposed to initial guidance for 35% - 40% revenue growth, its 2008 revenues declined ~15% to ~$720 million. The stock, from a high of ~$74 in November 2007, fell to ~$1 a year later – and as you can see below, it took nearly 15 years to regain the record highs (at Friday’s close of ~$77 per share, the stock is basically unchanged from levels first reached in 2007).
