DENVER (AP) Crocs love em or hate em.
But not just the distinctive rubbery shoes with holes. The stock of Crocs generates the same polarized sentiment.
Investors have alternately loved it and hated it, sending the shares on precipitous surges and crashes over Crocs six years as a publicly traded company.
While the stock still shows volatile swings, Crocs has reversed a succession of financial losses with a successful turnaround strategy.
The Niwot-based shoemaker gradually is transforming its product mix from the iconic clunky clogs to snazzier styles, and beefing up its international markets. That has helped bring Crocs back from near extinction to a steady money-maker.
After a rocky 2008-09 when auditors issued a warning about Crocs ability to survive, the company has turned a profit for seven consecutive quarters.
Revenue hit a record high of $295.6 million in the second quarter of 2011 as consumers embraced a growing selection of shoe styles at higher prices and better profit margins than the classic $29.99 clog.
Theyve added shoes that look like shoes, not shoes that make your feet look like a ducks, said Sam Poser, a New York-based senior research analyst with Sterne Agee.
Yet amid the fashion transition and financial makeover, the share-price volatility remains.
Investors were reminded of the stocks capricious nature in October when Crocs was hammered with a one-day price plunge of 39 percent after it said third-quarter revenue and earnings would be slightly lower than projected.
That was the latest in a series of big movements that have made Crocs stock as interesting to watch as its unique footwear.
The October drop reflected both pragmatic and emotional concerns by investors, Poser said.
Half of it was missing their numbers, he said. The other half was people thinking back to 2007 and saying, God, here they go again.
Thats a reference to Crocs big surge after its 2006 initial public stock offering, followed by an epic crash.
After buyers flocked to the February 2006 IPO at a split-adjusted price of $10.50, shares took a meteoric run up to $74.75 by October 2007.
But just a year later, the stock plummeted to less than $1 as investors fled what they believed to be a fad-induced spike.
Fadishness, however, is not a current concern for chief executive John McCarvel.
In fact, We never say the f-word around here, McCarvel said, with a grin.
McCarvel held other management positions with Crocs and headed the companys Asian operations.
Earlier this year, McCarvel was named winner of the annual Stevie Award for turnaround executive of the year at the American Business Awards.
In a recent interview at Crocs Niwot headquarters, McCarvel relaxed in a meeting room, wearing an a open-collar oxford shirt, well-worn blue slacks and a pair of Crocs Santa Cruz Loungers a canvas model that bears a resemblance to household slippers.
He described the recent plummeting stock price as an overreaction to lower earnings projections. Shareholders may be skittish, but customers, he said, are enthusiastic.
Weve got a loyal customer base, he said. From a name-brand-recognition point of view, its a pretty good connection with customers.
McCarvel said his belief that Crocs has a sustainable, nonfaddish future is based on these factors:
Consumer enthusiasm for the companys nonclog product line. Crocs now has 125 different styles. Particularly for women, models now include diverse styles of boots, heels, wedges, flats and sneakers made with leather or fabric and priced as high as $119.99. In the third quarter of 2011, the majority of Crocs revenue came from nonclog models.
Prospects for growth in international markets. Third-quarter sales in Asia increased by 41 percent. And even as questions remain about Europes financial problems, European sales were up by 26 percent.
Better control over inventories. Bloated inventories were a key factor in Crocs net losses in 2008 and 2009. The company now has a manageable inventory ranging from 10 million to 14 million pairs, compared with 29 million when sales began to drop in 2007.
More emphasis on Internet and company-owned-store sales instead of from wholesale customers such as department stores and shoe stores. McCarvel said Crocs will add about 100 more company-owned retail outlets next year. It now has about 400.
Strong financial fundamentals. The company has no debt and $250 million in cash.
Wall Street analysts generally like Crocs direction, with the majority maintaining buy ratings.
Although we believe it may take a quarter or two for the stock to start working again and management needs time to rebuild credibility with investors, we are sticking with our buy rating, WJB Capital Group analyst Robert Samuels said in a recent report.
We continue to believe that Crocs represents a compelling global growth story, Monness Crespi Hardt retail analyst Jim Chartier said in a report. Given this growth profile, the stock looks undervalued.
Customers continue to exhibit a love-hate relationship with Crocs, sometimes simultaneously.
Perusing the Crocs kiosk last week at the Cherry Creek Shopping Center, Lydia Cohen eyed but didnt buy a pair of the $39.99 Baya clog model lined with fleece.
Theyre weird. Theyre funky, she said. But theyre kind of cute in their funky way.