Wunderlich Securities Previews Q3 Earnings For Crocs

Wunderlich Securities issued a Q3 preview for Crocs, Inc. CROX on Thursday and reiterated its Buy rating and $17 price target.

Analyst Danielle McCoy believed that "Crocs kept pace with its strategic plan to clean up the business model by reducing head count, closing underperforming stores, continuing its SAP roll-out, and making necessary changes to management."

McCoy viewed "CROX trading ~26 percent below its 52 wk. high or 4.3x EV/EBITDA (vs. peers at 7.4x) as an optimal time to build a position."

"3Q consensus of $0.15 is a penny above our estimate. Our projection assumes: 1) a revenue increase of 1 percent YoY (vs. management's expectations of 4 percent to 5.7 percent YoY) including a $4.2 million loss from ~33 store closures and pressure in the Asia Pacific region; 2) 30 bp of gross margin pressure; and 3) 80 bp of operating leverage driven by reduced head count and closure of underperforming locations."

Crocs will report earnings on Monday, October 27, after the market close.

Crocs, Inc. closed at $12.22 on Wednesday, down 2.44 percent.