TIVP034: CROCS (CROX): FASHION ICON OR VALUE TRAP?

W/ DANIEL MAHNCKE & SHAWN O’MALLEY

TIVP034: CROCS (CROX): FASHION ICON OR VALUE TRAP? W/ DANIEL MAHNCKE & SHAWN O’MALLEY

24 August 2025

Daniel Mahncke and Shawn O’Malley dive into Crocs, the footwear company that turned a ridiculed foam clog into a global fashion phenomenon. After a post-IPO collapse and years of overextension, Crocs has staged one of the most impressive brand comebacks in recent retail history — now fueled by strong margins, loyal customers, and bold international expansion. But there are still some challenges and risks. The HEYDUDE acquisition wasn’t successful yet, and the turnaround will still take time, and there are still reasonable doubts around the sustainability of the growth and fashion relevance of Crocs.

SUBSCRIBE

IN THIS EPISODE, YOU’LL LEARN:

  • How Crocs was founded
  • Why Crocs almost went bankrupt in 2008 and how it survived
  • What started the second hype cycle
  • What its highly customized designs mean from a business perspective
  • What role social media plays in Crocs success
  • About Crocs international strategy
  • How the HEYDUDE acquisition hurt Crocs business
  • Whether Crocs is attractively valued at its current levels
  • Whether Shawn & Daniel add CROX to The Intrinsic Value Portfolio

 

 

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

[00:00:00] Daniel Mahncke: Crocs might be the only brand that I know that trades at a discount because people think the product is ugly. The market doesn’t trust the phenomenal numbers. Margins comparable to those of software companies, the growth CAGR and the mid-teens, and very promising international expansion.

[00:00:17] Shawn O’Malley: I’m guilty as charged as definitely being one of those people who, for better or worse has felt Crocs are just too ugly to be a thing, but they continue to prove me wrong and have emerged as one of Gen Z’s favorite shoes and are really everywhere on TikTok.

[00:00:31] Daniel Mahncke: If they just keep executing at the same level, this stock could easily become a double. The big whisp is that it turns out to be a fa and we see the business basically decline before our eyes.

[00:00:47] Intro: You are listening to The Intrinsic Value Podcast by The Investor’s Podcast Network. Since 2014 with over 180 million downloads, we’ve learned directly from the world’s best investors. Now we are applying those lessons to analyze businesses and investment opportunities every week, helping you uncover intrinsic value. And now here are your hosts, Shawn O’Malley and Daniel Mahncke.

[00:01:19] Shawn O’Malley: After discussing Lululemon on last week’s episode, today we are trying to understand the hype surrounding the unique and perhaps what you might already call iconic Crocs Clogs. They experienced their first hype cycle in the mid two thousands, and I remember seeing them. All over the playground back in the day, just when I was a little one, but from what I can tell, there was really this gap in their popularity until the brand reemerged once again in the late 2010s.

[00:01:50] Shawn O’Malley: And it feels since then, the brand has just gotten bigger and bigger and more popular every single year. And to some extent, that’s been true for the stock as well. It’s returned about 150% since the start of 2020. However, while the business has seen significant fundamental growth since then, the stock is still trading at a substantially lower valuation than its peers and just an objectively low valuation.

[00:02:18] Shawn O’Malley: And I suppose today will be about determining whether this entry point is as excellent of an opportunity to invest as it seems. Or if the Crocs hype is just a fad and the stock is a value trap. And for some reason though I have to say Daniel, you don’t strike me as a Crocs guy, and I’m pretty sure I’m not one either.

[00:02:38] Shawn O’Malley: But I’m hoping you can help us figure out how Crocs took over the world, because clearly both with the fashion and with the investment, we miss the boat here. And more importantly, what we’re gonna wanna figure out is whether the brand can persist over the coming years.

[00:02:55] Daniel Mahncke: Believe it or not, Shawn, this episode has actually made me order a pair of Crocs and no, it’s shocking, but if the product can even convince me, I think that’s probably a good sign for the staying power of clogs.

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