Choice Equities' Mitchell Scott making the case that $CROX is not a fad

Aug 24, 2023

Mitchell Scott, founder and portfolio manager at Choice Equities Capital Management, joins the podcast to make the case that Crocs is not a fad. They discuss the growth story of Crocs, its valuation, and the patent protection on the product. They also delve into the core customer base, the acquisition of HEYDUDE, and the future of Crocs' apparel line. The episode explores the challenges of knock-offs, the impact of COVID-19, and the marketing potential of the brand.

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Introduction

00:00 • 3min

Insider Buying, Growth, and Cheapness of Crocs

02:44 • 7min

Valuation, Growth Potential, and Board's Capital Allocation Strategy

09:22 • 3min

Crocs and the Growth Question

12:41 • 12min

The Hey Dude Acquisition: Growth and Skepticism

24:13 • 12min

Marketing Potential and International Reach

36:21 • 9min

The Impact of the Gray Market on Crocs Business

45:18 • 3min

Brand Growth, Multi-Channel Offerings, and Retail Challenges

48:20 • 4min

Mitchell Scott, Founder and Portfolio Manager at Choice Equities Capital Management, joined the podcast to make the case that Crocs, Inc. (NASDAQ: CROX) is not a fad.

For more information about Choice Equities Capital Management, please visit: https://choice-equities.com/

Chapters:

[0:00] Introduction + Episode sponsor: Stream by Alphasense

[1:36] What is $CROX, why is it interesting to Mitchell and $CROX growth story

[4:50] What is Jibbitz, patent protection on the product and consumer trends using the product

[8:22] $CROX valuation

[12:16] $CROX bear case and response

[16:44] Why aren't there more Crocs knock-offs

[17:40] Is $CROX just a COVID beneficiary and Crocs brand power

[22:01] Crocs core customer and fashion/age out risk

[25:04] HEYDUDE acquisition, go-forward with management's strategy around the brand, average customer of HEYDUDE shoes, knock off problem and why would one need multiple pairs of them

[34:19] How do overcome the bears $CROX worry that Crocs (and other brands $CROX owns) turns out to be a fad

[38:45] Why is $CROX the best buyer and owner of HEYDUDE?

[41:00] Endgame for $CROX / apparel line in the future?

[44:17] Final thoughts on $CROX: shifting HEYDUDE wholesale channel, worry about inventory buildup and this year's earnings

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