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Category: Crocs Inc (CROX)
Date: 23 February 2021 Stock price of Crocs Inc (CROX): $79.13 We take a more detailed look at Crocs (CROX) a firm that is engaged in the design, development, worldwide marketing, distribution, and sale of casual lifestyle footwear and accessories for men, women, and children
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Since sales began in 2002, Crocs has sold more than 700 million pairs of shoes globally. At the heart of our brand’s DNA are our clogs and sandals. The Classic Clog, our most iconic style for adults and children, embodies our innovation in molding, simplicity of design, and all-day comfort"
More About Crocs Inc (CROX)
Crocs, Inc. and its consolidated subsidiaries (collectively the “Company,” “Crocs,” “we,” “us,” or “our”) are engaged in the design, development, worldwide marketing, distribution, and sale of casual lifestyle footwear and accessories for men, women, and children. We strive to be the world leader in innovative casual footwear, combining comfort and style with a value that consumers want. The vast majority of shoes within Crocs’ collection contains Croslite™ material, a proprietary, molded footwear technology, delivering extraordinary comfort with each step. Crocs, Inc., a Delaware corporation, is the successor to a Colorado corporation of the same name and was originally organized in 1999 as a limited liability company
Products Sold By Crocs
Since we first introduced a single-style clog in six colors in 2002, we have grown to be a world leader of innovative, casual footwear for men, women and children. Recognized globally for our unmistakable iconic clog silhouette, we have taken the successful formula of a simple design aesthetic, paired it with modern comfort, and expanded into a wide variety of casual footwear products including sandals, wedges, flips and slides, that meet the needs of the whole family. In 2019, Crocs reinforced its mission of “everyone comfortable in their own shoes” with the third year of its global Come As You Are™ campaign. Crocs offers a broad portfolio of all-season products, while remaining true to its core molded footwear heritage. The vast majority of Crocs™ shoes feature Croslite™ material, a proprietary, revolutionary technology that gives each pair of shoes the soft, comfortable, lightweight, non-marking and odor-resistant qualities that Crocs fans know and love.
Since sales began in 2002, Crocs has sold more than 700 million pairs of shoes globally. At the heart of our brand’s DNA are our clogs and sandals. The Classic Clog, our most iconic style for adults and children, embodies our innovation in molding, simplicity of design, and all-day comfort. The unique look and feel of the Classic Clog can be experienced throughout the vast majority of our product line due to the use and design of CrosliteTM. Sandals are a natural extension of our brand, leveraging our signature molding technology to provide casual, comfortable footwear for a variety of wearing occasions. We are now using CrosliteTM with new technologies in our LiteRideTM collection, as we focus on visible comfort technology. LiteRideTM features comfort focused, proprietary foam insoles which are soft, lightweight and resilient. We strive to provide our global consumers with comfortable, casual, colorful, and innovative footwear styles, with a focus on molded product. Our collections address many wearing occasions and meet the needs of the entire family. We enjoy licensing partnerships with Disney, Marvel, Nickelodeon, and Warner Bros., among others, which allow us to bring popular global franchises and characters to life on our product in a fun, exciting way.
Since sales began in 2002, Crocs has sold more than 700 million pairs of shoes globally. At the heart of our brand’s DNA are our clogs and sandals. The Classic Clog, our most iconic style for adults and children, embodies our innovation in molding, simplicity of design, and all-day comfort. The unique look and feel of the Classic Clog can be experienced throughout the vast majority of our product line due to the use and design of CrosliteTM. Sandals are a natural extension of our brand, leveraging our signature molding technology to provide casual, comfortable footwear for a variety of wearing occasions. We are now using CrosliteTM with new technologies in our LiteRideTM collection, as we focus on visible comfort technology. LiteRideTM features comfort focused, proprietary foam insoles which are soft, lightweight and resilient. We strive to provide our global consumers with comfortable, casual, colorful, and innovative footwear styles, with a focus on molded product. Our collections address many wearing occasions and meet the needs of the entire family. We enjoy licensing partnerships with Disney, Marvel, Nickelodeon, and Warner Bros., among others, which allow us to bring popular global franchises and characters to life on our product in a fun, exciting way.
Sales And Marketing Of Crocs
We run our business across three geographic regions: the Americas, Asia Pacific, and Europe, Middle East, and Africa (“EMEA”), which are discussed in more detail in “Business Segments and Geographic Information” below. We prioritize five core markets including: (i) the U.S., (ii) Japan, (iii) China, (iv) South Korea, and (v) Germany. These countries represent key geographies where we believe the greatest opportunities for growth exist. We are also concentrating our marketing efforts on these countries, to increase customer awareness of both our brand and our full product range. Each season we focus on presenting a compelling brand story and experience for our new product introductions as well as our on-going core products. We employ social and digital marketing centered on showcasing our clog and sandal silhouettes. We are growing our clog silhouette with new colors, graphics, licensed images, embellishments, and accessories that allow for personalization. We are expanding our sandal offerings as we pursue a greater share of a large market with no clear global leader. We are continuing to invest in designer, celebrity, and brand collaborations, as well as celebrity brand ambassadors to raise consumer engagement with our brand. See Note 1 — Basis of Presentation and Summary of Significant Accounting Policies in the accompanying notes to the consolidated financial statements included in Part II - Item 8. Financial Statements and Supplementary Data of this Annual Report on Form 10-K for information on total marketing costs for the year.
Distribution Channels Of Crocs
The broad appeal of our footwear has allowed us to market our products in more than 85 countries through three distribution channels: wholesale, retail, and ecommerce. Our wholesale channel includes domestic and international multi-brand retailers, e-tailers, and distributors; our retail channel consists of company operated stores; and our e-commerce channel includes company-operated e-commerce sites and third-party marketplaces.
Wholesale Channel
During the years ended December 31, 2019, 2018, and 2017, 53.3%, 53.1%, and 52.4% of revenues, respectively, were derived through our wholesale channel. Our wholesale channel includes domestic and international, multi-brand, brick-and-mortar retailers, e-tailers, and distributors, and in certain countries, partner store operators. Brick-and-mortar customers typically include family footwear retailers, national and regional retail chains, sporting goods stores, and independent footwear retailers. Outside the U.S., we use distributors when we believe such arrangements are economically preferable to direct sales. Distributors purchase products pursuant to a price list and are granted the right to resell those products in a defined territory, usually a country or group of countries. Our typical distribution agreements have terms of one to five years and can be terminated or renegotiated if minimum requirements are not met. No single wholesale customer accounted for 10% or more of our total revenues for any of the years ended December 31, 2019, 2018, and 2017.
Retail Channel
During the years ended December 31, 2019, 2018, and 2017, 28.2%, 30.1%, and 33.0%, respectively, of our revenues were derived through our retail channel. We operate our retail channel through three platforms: company-operated full-price retail and outlet stores, kiosks, and store-in-store locations. With the worldwide consumer shift toward e-commerce, we are carefully managing our retail fleet, especially full-priced retail stores. As of December 31, 2019, we had 367 company operated stores.
Full-Price Retail Stores
Our company-operated full-price retail stores allow us to effectively showcase the full extent of our product range to consumers and provide us with the opportunity to interact with those consumers directly. We believe the optimal location for our retail stores is in high foot-traffic shopping malls or districts.
Outlet Stores
Our company-operated outlet stores allow us to sell discontinued and overstocked merchandise directly to consumers at discounted prices. We also sell full-priced products in certain of our outlet stores as well as built-for-outlet products. Outlet stores are generally located within outlet shopping centers.
Kiosk / Store-in-Store Locations
Our company-operated kiosks and store-in-store locations allow us to market specific product lines, with flexibility to tailor products to consumer preferences in shopping malls and other high foot-traffic areas. With efficient use of retail space, and limited capital investment, we believe kiosks and store-in-store locations can be effective vehicles for marketing our products in certain geographic areas.
E-commerce Channel
As of December 31, 2019, we offered our products through 13 company-operated e-commerce sites worldwide and also on third-party marketplaces. During the years ended December 31, 2019, 2018, and 2017, 18.5%, 16.8%, and 14.6%, respectively, of our revenues were derived through this channel. Our e-commerce presence facilitates increased access to our consumers and provides us with an opportunity to educate them about our products and brand. We continue to leverage increasingly sophisticated digital marketing activities to enhance the consumer experience and drive sales, thereby benefiting from the continued migration of consumers to online shopping
Wholesale Channel
During the years ended December 31, 2019, 2018, and 2017, 53.3%, 53.1%, and 52.4% of revenues, respectively, were derived through our wholesale channel. Our wholesale channel includes domestic and international, multi-brand, brick-and-mortar retailers, e-tailers, and distributors, and in certain countries, partner store operators. Brick-and-mortar customers typically include family footwear retailers, national and regional retail chains, sporting goods stores, and independent footwear retailers. Outside the U.S., we use distributors when we believe such arrangements are economically preferable to direct sales. Distributors purchase products pursuant to a price list and are granted the right to resell those products in a defined territory, usually a country or group of countries. Our typical distribution agreements have terms of one to five years and can be terminated or renegotiated if minimum requirements are not met. No single wholesale customer accounted for 10% or more of our total revenues for any of the years ended December 31, 2019, 2018, and 2017.
Retail Channel
During the years ended December 31, 2019, 2018, and 2017, 28.2%, 30.1%, and 33.0%, respectively, of our revenues were derived through our retail channel. We operate our retail channel through three platforms: company-operated full-price retail and outlet stores, kiosks, and store-in-store locations. With the worldwide consumer shift toward e-commerce, we are carefully managing our retail fleet, especially full-priced retail stores. As of December 31, 2019, we had 367 company operated stores.
Full-Price Retail Stores
Our company-operated full-price retail stores allow us to effectively showcase the full extent of our product range to consumers and provide us with the opportunity to interact with those consumers directly. We believe the optimal location for our retail stores is in high foot-traffic shopping malls or districts.
Outlet Stores
Our company-operated outlet stores allow us to sell discontinued and overstocked merchandise directly to consumers at discounted prices. We also sell full-priced products in certain of our outlet stores as well as built-for-outlet products. Outlet stores are generally located within outlet shopping centers.
Kiosk / Store-in-Store Locations
Our company-operated kiosks and store-in-store locations allow us to market specific product lines, with flexibility to tailor products to consumer preferences in shopping malls and other high foot-traffic areas. With efficient use of retail space, and limited capital investment, we believe kiosks and store-in-store locations can be effective vehicles for marketing our products in certain geographic areas.
E-commerce Channel
As of December 31, 2019, we offered our products through 13 company-operated e-commerce sites worldwide and also on third-party marketplaces. During the years ended December 31, 2019, 2018, and 2017, 18.5%, 16.8%, and 14.6%, respectively, of our revenues were derived through this channel. Our e-commerce presence facilitates increased access to our consumers and provides us with an opportunity to educate them about our products and brand. We continue to leverage increasingly sophisticated digital marketing activities to enhance the consumer experience and drive sales, thereby benefiting from the continued migration of consumers to online shopping
Raw Materials Of Crocs
CrosliteTM, our proprietary closed-cell resin brand, is the primary material formulation used in the vast majority of our footwear and some of our accessories. CrosliteTM is formulated to create soft, comfortable, lightweight, non-marking, and odor-resistant footwear. We continue to invest in research and development to refine our materials to enhance these properties and develop new properties for specific applications. CrosliteTM is produced by compounding elastomer resins purchased from major chemical manufacturers, together with certain other production inputs such as color dyes. Multiple suppliers produce the elastomer resins used in CrosliteTM. In the future, we may identify and utilize materials produced by other suppliers as an alternative to, or in addition to, those elastomer resins. All of the other raw materials that we use to produce CrosliteTM products are readily available for purchase from multiple suppliers. Some of the products we offer are constructed using leather, textile fabrics, or other non-CrosliteTM materials, such as LiteRideTM. These materials are obtained from a number of third-party sources and we believe these materials are also broadly available
Sourcing Of Crocs
Our strategy is to maintain a flexible, globally-diversified, low-cost third-party manufacturing capability. We source our footwear production from multiple thirdparty manufacturers, primarily in Vietnam and China. During the years ended December 31, 2019, 2018, and 2017, our largest third-party manufacturer, operating in both Vietnam and China, produced approximately 38%, 45%, and 41%, respectively, and our second largest third-party manufacturer, primarily operating in Vietnam, produced approximately 21%, 21%, and 19%, respectively, of our footwear unit volume. We believe that the manufacturing capabilities required to produce our footwear are broadly available. See the risk factor “We depend solely on third-party manufacturers located outside of the U.S.”, included in Item 1A. Risk Factors for information on risks associated with sourcing
Competition Of Crocs
The global casual, athletic, and fashion footwear markets are highly competitive. Although we do not believe that we compete directly with any single company with respect to the entire spectrum of our products, we believe portions of our wholesale, retail, and e-commerce businesses compete with companies including, but not limited to: NIKE Inc., adidas AG, Under Armour, Inc., Deckers Outdoor Corporation, Skechers USA, Inc., Steven Madden, Ltd., Wolverine World Wide, Inc., and VF Corporation. Our company-operated retail locations and e-commerce sites also compete with footwear retailers such as Genesco, Inc., Macy’s Inc., Dillard’s, Inc., Dick’s Sporting Goods, Inc., The Finish Line Inc., and Foot Locker, Inc. The principal elements of competition in these markets include brand awareness, product functionality, design, comfort, quality, price, customer service, and marketing and distribution.
We believe that our unique footwear designs, our CrosliteTM material, our prices, our product line, and our distribution network position us well in the marketplace. However, a number of companies in the casual footwear industry have greater financial resources, more comprehensive product lines, broader market presence, longer standing relationships with wholesalers, longer operating histories, greater distribution capabilities, stronger brand recognition, and greater marketing resources than we have.
We believe that our unique footwear designs, our CrosliteTM material, our prices, our product line, and our distribution network position us well in the marketplace. However, a number of companies in the casual footwear industry have greater financial resources, more comprehensive product lines, broader market presence, longer standing relationships with wholesalers, longer operating histories, greater distribution capabilities, stronger brand recognition, and greater marketing resources than we have.
Backlog Of Crocs
Employees Of Crocs
As of December 31, 2019, we had 3,803 full-time, part-time, and seasonal employees, of which 2,728 were engaged in retail-related functions.
Crocs (CROX) stock price chart over the last 5 years
The image below shows the stock price chart of Crocs (CROX) over the last 5 years. And its been a very good time for Crocs stockholders. Over the last 5 years the stock of Crocs (CROX) increased by a whopping 701%. No investor would say no to those kind of returns.
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