I'll admit it. I was had. As a Crocs (Nasdaq: CROX) shareholder, I really wanted to believe the Crocs story.

When some of my fellow Fools like Alyce Lomax warned -- and warned again -- that rising inventory levels in the shoemaker's two most recent quarterly reports were hints of waning demand, I was wrong to dismiss the signs.

I was always able to point to analysts, who were sticking to their impressive growth projections. I also had history on my side. Crocs had done nothing but trounce its quarterly profit targets in every quarter as a public company.

EPS

Estimate

% Difference

Q1 2006

$0.09

$0.07

29%

Q2 2006

$0.20

$0.11

82%

Q3 2006

$0.27

$0.21

29%

Q4 2006

$0.26

$0.22

18%

Q1 2007

$0.31

$0.25

24%

Q2 2007

$0.58

$0.44

32%

Q3 2007

$0.66

$0.63

5%

Q4 2007

$0.45

$0.44

2%

Source: Thomson First Call.

Cynics warned that the company's signature shoes -- bright, light, and made of a proprietary odor-shaking resin called croslite -- were fads. They saw the next Heelys (Nasdaq: HLYS). I saw Crocs as the next Nike (NYSE: NKE), especially after the company expanded into apparel late last year. The prospects of croslite-enhanced clothing actually found me naming Crocs in the same league as performance apparel specialist Under Armour (NYSE: UA).

Yep, you may as well replace the final "c" in Crocs with a "w," because I've been wolfing down bowlfuls of crow for breakfast.

The new lower guidance that Crocs introduced last night is cruel. The freefalling footwear company will earn just $0.08 to $0.15 a share in this year's first quarter, and that's before charges related to closing down a manufacturing plant in Canada. Isn't a growing company supposed to open factories instead of shutting them down, regardless of currency translations?

Either way, Crocs will be way off the $0.46 a share that analysts were expecting. The company's new guidance of $1.70 to $1.80 a share for all of 2008 is also well below the $2.70 a share Wall Street target.

Yes, the shares got slammed on the news. They traded as low as $10.30 this morning, but I'm not going to make the value argument that Crocs is trading at just six times its bottom-line guidance. Why? Because who knows how this will end? If Crocs shaved a buck a share off its guidance in two months, can anyone be sure of how much the company will ultimately earn?

At this point, I'll hold on to my shares for now. The company is still looking to grow sales, especially in faster-growing markets abroad. However, I can no longer trust the trend it had as a young company with a hot product barreling through guesstimates with ease.

It's a hard reality for all Crocs investors until the company proves otherwise. If the fad fits, wear it.

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Longtime Fool contributor Rick Munarriz will still wear his two pairs of Crocs proudly, yet poorly. He does own shares in Crocs. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a foot-tappin' disclosure policy.