A high-octane tech fund just bailed on a consumer brand whose outlook isn’t impressing investors.
San Francisco-based investment firm No Street fully exited its position in Crocs (CROX 1.06%) during the third quarter, according to a Securities and Exchange Commission filing released on Friday.
What Happened
No Street GP LP reported a full liquidation of its Crocs holding in its quarterly Form 13F, filed on Friday. The fund sold all previously held 495,000 shares for an estimated transaction value of $50.1 million.
What Else to Know
Top holdings after the filing:
- NASDAQ:APP: $147.3 million (9.8% of AUM)
- NYSE:CVNA: $111.5 million (7.4% of AUM)
- NYSE:UBER: $107.8 million (7.2% of AUM)
- NASDAQ:WIX: $97.7 million (6.5% of AUM)
- NASDAQ:COOP: $94.9 million (6.3% of AUM)
As of Friday, shares of Crocs were priced at $73.39, down 26.5% over the past year and well underperforming the S&P 500’s 15% gain during the period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of market close Friday) | $73.39 |
| Market Capitalization | $3.9 billion |
| Revenue (TTM) | $4.1 billion |
| Net Income (TTM) | $182.5 million |
Company Snapshot
Crocs, Inc. is a global leader in casual footwear, leveraging a diversified distribution network and strong brand recognition to reach consumers in over 85 countries. The company’s strategy centers on product innovation, direct-to-consumer expansion, and operational efficiency. Crocs’ competitive advantage lies in its iconic products and scalable business model, supporting consistent revenue generation and international growth.
Foolish Take
For long-term investors, No Street GP’s decision to walk away from Crocs stands out because it breaks from what seems like a typical approach of letting volatility run in pursuit of asymmetric upside. With top positions concentrated in fast-growing names like AppLovin, Carvana, and Uber, a full exit from the struggling footwear company suggests the risk-reward profile simply stopped competing.
Crocs’ latest results help explain the hesitation. Third-quarter revenue fell 6.2% to $996 million, with sales of the HEYDUDE brand sliding a steep 21.6%. Gross margin, meanwhile, compressed 110 basis points, and adjusted earnings per share declined 18.9% to $2.92. Management also issued disappointing guidance: Fourth-quarter revenue is expected to decline about 8%, led by a mid-20% drop at HEYDUDE. Even with free cash flow of $226 million and aggressive buybacks—2.4 million shares repurchased for $203 million in the quarter—the near-term trajectory remains soft.
So, what should long-term investors take away? Crocs still has brand strength and cash generation on its side, but growth is stalling, and near-term guidance points to more volatility ahead. Patience may pay off—but only once revenue stabilizes and the HEYDUDE drag begins to ease.
Glossary
Fully exited: When an investor sells all holdings of a particular security, leaving no remaining position.
13F reportable assets: Assets that institutional investment managers must disclose in quarterly SEC Form 13F filings.
Assets under management (AUM): The total market value of investments managed by a fund or investment firm.
Form 13F: A quarterly report filed by institutional investment managers to disclose their equity holdings.
Liquidation: The process of selling off an investment position, often referring to selling all shares of a security.
Allocation: The percentage of a portfolio’s total value assigned to a specific asset or investment.
Direct-to-consumer: Sales strategy where products are sold directly to end customers, bypassing third-party retailers.
Wholesale: Selling goods in large quantities to retailers or distributors rather than directly to consumers.
TTM: The 12-month period ending with the most recent quarterly report.
Scalable business model: A business structure that can increase revenue with minimal incremental cost as operations grow.
