Piper Jaffray Reiterates Its Overweight Rating On Crocs Following Management Meetings

Piper Jaffray is reiterating its Overweight rating and $20 price target following meetings and store visits with Crocs' CROX European management team. 2011 should be a year of strong European growth fueled by retail expansion and leveraging of existing infrastructure. Of the company's 100 planned new retail stores in 2011, Piper Jaffray expects an increasing share will be located in Europe as the market remains significantly underpenetrated at the retail level. Piper Jaffray believes new styles have performed well for Crocs during Q4, particularly boots in Europe. While likely a small portion of total sales, the success of boots is important for raising ASPs and decreasing seasonality. New non-clog styles such as the Hover Lace Up and Hover Slip-on also appear to be selling well in Europe and the U.S. based on our store checks and these new styles should also help raise ASPs and minimize seasonality. Risks to achieving the target price include demand changes, competition, rising input costs, FX & economic factors. CROX closed Monday at $18