It's not just the shoes that have holes. Shares of Crocs
The company is now looking to earn between $0.08 and $0.15 a share during the first quarter, before the charges related to shutting down its Canadian factory. The top line should clock in between $195 million and $200 million. The results will be far short of the $0.46-per-share profit on $225 million in revenue that Crocs had projected two months ago.
Crocs thinks it will earn between $1.70 and $1.80 a share on 15% to 20% revenue growth this year. That may price the battered shares of Crocs at ridiculously attractive valuation multiples -- in the single digits on a forward earnings basis -- but Crocs has been exposed. Investors can't trust its outlook any more than they can count on a pair of Crocs to hold water or sangria. If things deteriorated this quickly in less than two months -- when Crocs was hopeful of earning $2.70 a share in 2008 -- how can we take it on its word over the next three quarters?
We can't. Those rose-colored specs have shattered. As a Crocs shareholder, I hate to admit that, but it's true. Crocs as a company isn't necessarily shrinking in relevance, though. The shoemaker is still growing sales domestically, and things are going even better overseas. However, it is shrinking in relevance as a growth-stock story. All of the bears -- including many of my fellow Fools -- were right when they read booming inventory levels as red flags, even as analysts stuck to their profit targets.
The shoes aren't pretty, but they sure are comfortable. Now the stock is neither pretty nor comfortable.
News to go
Crocs wasn't the only company hosing down its prospects last night. Stanley Furniture
With food prices climbing at a clip not seen in 17 years, I figured a little haiku was in order:
Food is expensive
Energy and the weak buck
How much for Twinkies?
The Wall Street Journal this morning is reporting that MGM Mirage
It's April 15. Do you know where your tax returns are?
Have a great day out there.
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Longtime Fool contributor Rick Munarriz believes that breakfast is an important part of the day. He does not own shares in any of the companies in this story, save for 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 disclosure policy.