Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of plastic shoe specialist Crocs (NASDAQ:CROX) plummeted 21% today after its quarterly results and outlook easily missed Wall Street expectations.

So what: It's no secret that Crocs has been trying desperately to diversify beyond its core plastic clogs, but today's second-quarter results -- earnings fell 43% on revenue growth of just 10% -- coupled with downbeat guidance for the current quarter squashes any optimism on Wall Street that the strategy is working. While management blamed the weak sales in U.S. and Europe on colder-than-normal temperatures, investors are naturally concerned that it's instead a sign of declining popularity and a rapidly weakening competitive position.

Now what: Management now sees third-quarter EPS of $0.20 to $0.23 on revenue of $300 million to $310 million, well below the consensus of $0.36 and $325.3 million. "The fundamentals of the business remain strong as the balance of the revenue around the globe and the strengthening retail performance outside of Japan solidify our long-term sustainable growth expectations for revenue," CFO Jeffrey Lashley reassured analysts on a conference call. Given Crocs' seemingly permanent faddish and fickle nature, however, I wouldn't be so quick to bet on that optimism.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days

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