What happened

Crocs (CROX -2.17%) investors beat a rising market as shares jumped 19% through Thursday trading compared to a 3% surge in the S&P 500, according to data provided by S&P Global Market Intelligence. That boost put the footwear specialist only slightly closer to positive territory, though. Shares remain lower by more than 50% so far in 2022.

The rally was powered by rising optimism that the company might not face a sharp demand pullback, or declining earnings, over the next few quarters.

So what

There's no shortage of worries in the consumer apparel industry today. Inflation and slowing economic growth threaten to dampen demand for Crocs products, and a quick tilt in order volumes could leave the company saddled with too much inventory heading into the holiday shopping season.

Yet Crocs shares caught a head-turning upgrade this week, with analysts at Loop Capital calling it a buy and estimating its near-term value at $75 per share compared to its current price of below $60 per share. The stock's sell-off in recent weeks has created a compelling value, the analyst wrote.

Now what

Crocs' last earnings report showed no signs of an approaching operating slump. To the contrary, management raised its 2022 outlook after the company reported a 47% sales spike through late March. "Consumer demand remains strong," CEO Andrew Rees said in early May as management lifted its earnings and sales targets.

Inflation has accelerated since then, and new pressures like rising gas prices have hit consumers' wallets. A few other retailers have reported rising inventory levels, too, which raises the prospect of price cuts ahead if demand trends worsen.

But to date it appears that Crocs is on track to post another strong sales and earnings year. Investors will learn whether that's still the case in management's late-July earnings update. Watch that report for any change to Crocs' full-year outlook, which currently calls for sales to grow over 50% to about $3.5 billion as adjusted profit margin lands at a healthy 27% of sales.