The ICR X-Change Bounce

Gerelyn is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

When executives at iconic footwear brand Crocs (NASDAQ: CROX) readied their presentation at the 2012 ICR Xchange conference, an investor conference where public and private companies participate, the stock climbed approximately 16%. Once again, the footwear company is preparing for ICR Xchange and analysts, including those at Goldman Sachs, are advising investors to buy shares, according to a recent Barron's article. This year's conference will be held in mid-January in Miami, Florida, and Crocs is already seeing the bounce.

Indeed, this year marks the 15th annual ICR X-Change conference and Croc's stock has increased an average of 6% in the days surrounding the ICR conference over nearly the past decade, Barron's points out.  So far in 2013, shares of Crocs advanced nearly 7% following an overall decline in 2012. Clearly, there is an ICR bounce happening that investors can attempt to profit from.

It's not just superstition driving Croc's stock higher this year. Goldman analysts, who have a buy rating on the stock, suggest that Crocs intends to provide some update to its 4Q earnings projections before the company reports on in February. According to its most recent earnings guidance, Crocs expects only to "break even" with sales of $220 million.

Nonetheless, Goldman analysts have reason to believe that Crocs will be updating its projections. Perhaps the confidence is stemming from the fact that Croc's has almost $400 million in inventory backlog including products other than the iconic rubber shoes, which is about $100 million more than last year at the same time. According to Crocs' 3Q earnings results, however, it appears the inventory backlog represents orders and not actual shipments.

Currently, shares of Crocs are trading at a trailing price-to-earnings ratio of below 10. Crocs expects to produce a 15-20% increase in top-line growth in 2013 and also expects to enjoy profit margins of 14-15%. Crocs may also increase the size of its share buyback program, which would have a positive impact on earnings results.

<img src="/media/images/user_13739/mf-crocs_large.png" />

Other ICR X-Change Presenters

Crocs is not the only company evaluating its share repurchase program. Shoe Carnival (NASDAQ: SCVL) sells footwear and accessories at a discount and is also presenting at the ICR X-Change conference, recently extended an existing share repurchase program to December 2013.  The share buyback was initiated in 2010 and there is a remaining $20.3 million in shares that can be repurchased as part of this initiative.

Shoe Carnival also pays dividends and in addition to its regular $0.05 quarterly payout initiated a special dividend last month.

<img src="/media/images/user_13739/mf-carnival-shoes_large.png" />

Good Time for A Run

Athletic apparel company Lululemon Athletica (NASDAQ: LULU) is not only participating in the ICR X-Change conference, it's also leading a yoga session and group run. Started as a yoga company, Lululemon has expanded into the science and technology of new fabrics. Sure to be giving apparel innovator Under Armour a run for its money, Lululemon has a market cap of more than $10 billion and is generating sales to the tune of $1.2 billion annually. 

Lululemon's newest Reflect-Illuminate product line is material that is fully waterproof and reflective, and on shirts has holes for ventillation under the arms. Lululemon is also expanding to offer apparel to young girls between the ages of eight and 12 years old, according to a recent Bloomberg interview.

The ICR X-Change effect seems to be a phenomenon exclusively for Crocs. Nonetheless, there's no telling whether companies like Lululemon, Shoe Carnival or any other might have some developments throughout the conference that will create greater demand for shares.


GerelynT has no position in any stocks mentioned. The Motley Fool recommends Lululemon Athletica. The Motley Fool owns shares of Crocs. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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