Crocs, Inc. (CROX)’s Shifting Business Model Is Beginning to See Success

International Management Team

Third, coming from management experience in Asia and internationally in general, the CEO is making a noticeable shift to focus on Asian markets. John McCarvel worked for five years in Asia as an executive for both Flextronics and Crocs and Crocs is seeing the beginnings of success in Asia. Sales grew 34% with 39 new store openings in 2011 and sales grew 19.9% with 40 new store openings in 2010. In time, the company expects Asian sales to grow to a larger percentage of sales.

The US business for Crocs is also doing well growing over 20% per year. The new product lines are seeing consistent growth. The European market, as expected, has proven a tougher for Crocs as growth has stalled in those markets primarily attributable to this.

The Final Word

Yet, there are a few concerns still remaining with Crocs. Can they still maintain some level of growth and do they have the brand to keep on growing? I believe they have the capability. Since 2010, the company has recovered enormously from its difficulties in 2008 to become a solid consistent growth company. At the moment, they seem to be in the transition from a growth stock to a value stock as the company, while growing, does not necessarily maintain the growth figures that would appeal to many growth investors. The stock however, is priced very nicely with a P/E around 10 with growth maintaining in the double digits.

Overall, Crocs seems to be a company with incredible potential. After shaking off its fad status that powered its initial growth and lead to its major challenges, the company is growing stronger and more solidly than ever. Its expansion into new products, its transition into higher-margin retail sales, and its focus on emerging markets, particularly Asia, show me that this company has enormous potential to become a long-term growth story that will see it moving forward for many years to come.

The article Crocs’ Shifting Business Model Is Beginning to See Success originally appeared on Fool.com and is written by Reza Handley-Namavar.

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