Crocs is the IBD Stock Of The Day for Friday. Crocs stock broke out Friday as footwear stocks rallied after Deckers Outdoor posted a major earnings beat late Thursday.
Footwear stocks have found their stride this year. The overall Apparel-Shoes & Rel Mfg industry group tracked by IBD has spiked nearly 37% in 2024. Skechers and On Holding are extended above buy zones. Meanwhile, DECK and Crocs joined the list of footwear stocks breaking out Friday.
Deckers Powers Footwear Gains
Hoka maker Deckers led a sprint for shoe stocks after reporting a 43% earnings increase to $4.95 per share on a 21% revenue jump to $959.8 million. Analysts expected earnings to drop 14.2% while revenue growth slowed for the second quarter in a row to $888 million.
DECK stock rallied 13% Friday to soar above a 916.65 buy point for a cup-with-handle base. Deckers notched a record high above 1,030 on the move, surpassing its previous all-time high from late March by a wide margin.
Skechers climbed 1.8% Friday. Swiss shoemaker On Holding swung 2.4% higher to a two-year high. Both reported strong earnings in recent weeks.
The Apparel-Shoes & Related group rallied more than 10% Friday.
Crocs Stock
CROX stock surged 5% Friday to rebound above a 146.79 buy point for a cup base, according to MarketSurge charts. Shares briefly traded above the buy point in mid-May but didn't close above that. Since then Crocs forged a quasi-handle.
Investors could have used above 144.89 as an early entry Friday morning.
One also could view the entire cup base as a handle to a consolidation going back to April 2023.
The relative strength line for Crocs hit a 52-week high Friday, a bullish sign for a breakout. The RS line, the blue line in the chart provided, tracks a stock's performance vs. the S&P 500 index.
Crocs stock on Friday was added to SwingTrader.
It began building the right side of its base on May 7, gapping above its 50-day line as Crocs topped Q1 estimates and gave an upbeat outlook.
Crocs Earnings
The clogs maker reported a 16% increase in adjusted earnings to $3.02 per share while revenue rose 6% to a first-quarter record $939 million. FactSet analysts expected earnings of $2.25 per share on $884.3 million in sales.
Crocs brand revenues increased 14.6% to $744 million. But HeyDude brand sales fell 17.2% to $195 million. Meanwhile, the company's gross margin rose to 55.6% from 53.9%.
Barclays noted after the earnings that Crocs' core business is in "sport mode," as its sales channel growth accelerates and margins expand on cleaner inventory, The Fly reported. The financial news site raised its price target by $2 to $169 and kept an overweight rating on CROX stock.
Crocs guided Q2 Crocs brand sales to grow 7% to 9%, in line with forecasts. The company sees HeyDude sales falling 17% to 19% in the second quarter.
Analysts now predict 2024 earnings will increase 5.5% to $12.70 per share on 4.6% sales growth to $4.14 billion. Prior to the Q1 results FactSet expected Crocs earnings per share of $12.47.
CROX Ratings
Crocs ranks second in the Apparel-Shoes & Rel Mfg group according to IBD Stock Checkup. Deckers leads the group. The industry group ranks 33rd out of the 197 groups tracked by IBD.
Crocs has a 96 Composite Rating out of a best-possible 99. The Composite Rating combines various technical indicators into one easy-to-read score. CROX stock has a 92 EPS Rating. Its relative strength line is trending back toward 52-week highs and it has a 91 RS Rating.
Crocs stock has bolted 60% higher this year.
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