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Why Crocs Stock Gained 25% in September

By Demitri Kalogeropoulos - Updated Oct 4, 2019 at 1:50PM

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Investors grew more confident in accelerating sales growth on the way from the shoemaker.

What happened

Crocs (CROX -0.22%) investors beat the market last month as the stock jumped 25% compared to a 2% increase in the S&P 500, according to S&P Global Market Intelligence. That rally put shares back in positive territory for the year after they had been down by more than 30%.

A pair of green rubber shoes.

Image source: Getty Images.

So what

The shoe specialist attracted a few upgrades by Wall Street analysts in September, with some investors seeing reason to believe an operating rebound is on the way. To be sure, Crocs said in early August that new releases are finding traction with consumers and that costs are also moderating. These trends helped push adjusted operating income higher by 13% in Q2.

Now what

CEO Andrew Rees and his team are projecting accelerating growth over the next six months, which should show up as higher retailing sales and expanding gross and operating profit margins. These forecasts depend on a strong holiday shopping season and on the continued popularity of new releases. If the consumer goods seller can navigate these challenges, the stock should continue rallying into 2020.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Crocs, Inc. Stock Quote
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CROX
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