If you bought at the beginning of the year, returns are already 50%… I should have bought stocks instead of Crocs shoes

Crocs, a NASDAQ-listed company, saw its stock price surge from $85 to $136 this year. Compared to the yearly low, it nearly doubled. It is rare for consumer goods stocks to rise so sharply in the consumer market, excluding AI (artificial intelligence), aerospace, and defense sectors that heated up the U.S. stock market. The bullish reason attracting attention on Wall Street is growth. Evaluations suggest that Crocs' explosive popularity in Asian markets such as China, India, and Japan—not just its domestic U.S. market—is the background for its soaring stock price.

China, India, and Japan are early-stage markets where Crocs holds less than 1% market share. However, with overseas sales led by these Asian countries expected to surpass U.S. sales for the first time in history this year, expectations for growth are spreading. While there are cautious views, Wall Street is increasingly betting on further stock price increases.

The Crocs story begins in the summer of 2002 with three friends from Colorado spending time on a yacht named Hannibal in the Caribbean. The boat owner, Scott Seamans, was a retired inventor; George Bodocker Jr. was an entrepreneur running over 100 Domino's Pizza stores; and Lyndon Duke Hanson was a former computer salesman. They decided to enter the business after trying on foam shoes called "Crocs" made by a Canadian company named Foam Creations for spa use.

These shoes did not slip even on slippery decks, floated in water, and did not develop odors. Although the design was poor, these people were impressed by the functionality and secured U.S. distribution rights for Crocs. They set up their company while living on a boat off the coast of Miami. The name "Crocs" comes from the crocodile that moves between water and land. At the Fort Lauderdale Boat Show in November 2002, the first product launched sold out all 200 pairs prepared.

Sensing success, they acquired Foam Creations entirely in 2004 to secure exclusive rights to the patented material Croslite, and entered NASDAQ in February 2006 through an initial public offering (IPO), raising over $2 million won. In 2007, the year after listing, sales skyrocketed to 1.19 trillion won ($847 million), 2.4 times the previous year's figure. However, with the global financial crisis in 2008, the trend faded, sales declined, and excess inventory piled up in warehouses, leading to bankruptcy rumors as a major crisis struck. The stock price, which was at the $75 level in autumn 2007, fell below $1 by 2009.

What saved Crocs from this crisis was Zeebits, a company acquired in 2006. In 2005, Sherry Schmelzer, raising three children in Colorado, began inserting flowers and cubic decorations into the holes of her children's Crocs shoes and turned it into a business. The company she started with her husband Rich, Zeebits, saw monthly sales jump from $200,000 to 0.2 billion won within six months. In 2006, Crocs acquired this couple's company for 1 billion won in cash and agreed to pay an additional 1 billion won upon achieving revenue targets.

Zeebits completely changed Crocs' business model. Crocs' main products have 13 holes, and the accessories inserted into them continued to sell well. Even people who did not buy new shoes because trends had faded purchased a few thousand won worth of accessories. With children developing an interest in decorating their shoes, Crocs gained a buffer against the shock of trend extinction.

Of course, the process of enduring was harsh. The company survived by conducting large-scale layoffs and restructuring, closing stores and warehouses. The turning point came at the end of 2013. Private equity firm Blackstone injected $2 million won (280 billion won) to advise on management, leading Crocs to cut back its sprawling product lines and close loss-making stores, returning to its former appearance.

Just in time, Crocs' popularity returned again. Instead of adult customers from the past, teenagers from the MZ generation began wearing Crocs. Designs that parents considered old-fashioned were instead evaluated as unique shoes by the MZ generation, gaining popularity. In 2017, luxury brand Balenciaga showcased $850 heeled Crocs at Paris Fashion Week, turning the fashion world upside down, and a collaboration product with rapper Post Malone sold out immediately upon release. Zeebits also evolved into character and artist collaboration products, turning shoes into icons of self-expression.

Especially in 2020, the COVID-19 pandemic fueled demand for Crocs. Demand for comfortable shoes for remote work exploded, and Crocs even turned its image around with a campaign donating 860,000 pairs of shoes to medical staff for free. In 2021, sales increased by 67% from the previous year to reach 3.24 trillion won ($2.313 billion), and the stock price, which had plummeted below $1 during the financial crisis, hit an all-time high of $183 in November 2021.

However, Crocs fell into trouble again when it acquired casual footwear brand Hey Dude in March 2022 for $2.5 billion (3.5 trillion won), which became a poison pill. Hey Dude's sales slipped from $949 million the year after acquisition to $715 million last year, and inventory piled up in wholesale warehouses, eroding brand value. Hey Dude continued to eat into profits, and eventually, Crocs took a big write-off related to Hey Dude in the second quarter of 2025.

This involved an impairment charge of $430 million for the Hey Dude trademark, $37 million for goodwill, totaling 1.3 trillion won ($737 million) all at once. As a result, the company recorded a net loss per share of $8.82 in that quarter, and as a ripple effect, pre-tax profits for last year shrank to 102.2 billion won ($73 million), which is one-twelfth of the previous year's pre-tax profit of $911 million. A securities class action lawsuit filed by stock purchasers from 2022 to 2024 over wholesale inventory issues is also ongoing.

However, the situation changed this year. After shedding Hey Dude, Crocs posted results beating market expectations for three consecutive quarters. For the second quarter announced last month on the 30th, sales increased by 2.6% to 1.65 trillion won ($1.179 billion), recording the highest quarterly figure in company history, and Crocs brand sales exceeded 1.4 trillion won ($1 billion) for the first time ever. Adjusted earnings per share (EPS) rose 7.6% to $4.55. Hey Dude also showed some improvement in performance by increasing direct-to-consumer (DTC) sales by 7.2%. The company raised its EPS guidance again to $13.70–$14.00, the second upward revision this year.

What is noteworthy is that Crocs is performing significantly well in overseas markets. In the first quarter of this year, even amid the fallout from Middle East conflicts, Crocs brand overseas sales increased by 7%, with China, India, and Japan all achieving double-digit growth. The company plans to open up to 250 new stores overseas this year, having already opened about 160 monobrand stores and kiosks in the second quarter alone.

In China, the company set top stars as ambassadors and launched a collaboration between Pop Mart, a symbol of Chinese pop culture, and Zeebits, generating hot consumer responses. A new term called "Dongmen" (, meaning "Door of Holes") emerged to refer to Crocs fandom, with social media hashtag mentions approaching 1 billion, and those who call themselves Dongmen even share Zeebits combinations. The main customer base is the Z-generation in major cities, especially young women. In the first quarter of this year, Crocs held its first-ever Super Brand Day on Douyin (China's version of TikTok), achieving above-expected results through celebrity live commerce. In the second quarter, it quickly released a China-exclusive model of ballet flats by reading local reactions and responding immediately, recording the highest quarterly sales in company history. The company has moved from the stage of importing global plans to making shoes specifically for China.

In Japan, Crocs rode the wave of "Oshikatsu" (し), a term meaning fan activities where people spend time and money on their favorite idols or characters, which has become a lifestyle phenomenon among young women. Zeebits, inserted into shoe holes, caught consumers' attention. The company also identified personalization trends as the driving force for growth in Japan. In the second quarter of this year, Japan achieved balanced growth across all channels.

Crocs popularity is also soaring in India. In India, where it must endure a rainy season with heavy rain for three months, Crocs are perfect for daily life because they are water-resistant and can be easily washed if muddy. Ann Melman, CEO of the Crocs brand, said, "India is a core market because sandals have a natural silhouette for consumers." In India, young women are also the main customer base. This year, the company appointed Bollywood top star Rashmika Mandanna as an ambassador to run a Monsoon campaign, prominently featuring new lines such as Classic Buckle and Ballet Flats. Additionally, in a simultaneous campaign across seven Asian countries including India, China, Japan, and Korea, Indian actor Siddhant Chaturvedi and Korean actress Choi Soobin were cast together, blending K-drama and Bollywood sensibilities.

Overseas market sales, which were $1.389 billion in 2023, increased to $1.78 billion in 2025. Although this period saw a decrease from $2.574 billion to $2.261 billion, Wall Street is giving higher scores to the growth trend of overseas markets. The overseas share of Crocs brand sales grew from 41.0% in 2023 to 48.6% last year, and the company expects it to exceed 50% this year.

Wall Street investment ratings are concentrated on "Buy." The basis for the bullish view is valuation and cash flow. Even after the rally, the price-to-earnings ratio (PER) based on this year's expected earnings is around 10 times, half of the industry average of 18 times for footwear companies. Return on equity (ROE) stands at 42%, and annualized free cash flow reaches 750 billion won ($534 million). Market consensus estimates suggest that EPS will increase by 9.3% this year and 7.7% next year. A situation is unfolding where profits are growing and multiples, suppressed by share buybacks, are normalizing.

Of course, there are also arguments about the peak. The cheap price tag of a PER of 10 times could also mean that the market does not yet fully believe in the company's ability to sustain growth. There are also opinions that the growth trend in overseas markets should be viewed cautiously. China has already passed the fashion early-adopter stage and is now pulling in mass consumers through celebrity live commerce, raising concerns that the sudden drop in Crocs' popularity in the U.S. in 2008 could repeat overseas.

There are also points to watch regarding Hey Dude's performance improvement. There are also tariff issues. Since most of Crocs' production is outsourced to Asia, it is exposed to U.S. tariff policies, and the outcome of the securities class action lawsuit related to wholesale inventory remains uncertain.