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Crocs, Inc., 2022: Déjà Vu All Over Again
Lipson, Marc L.; Loutskina, Elena; Rayaji, Abanikash Case F-2066 / Published January 30, 2024 / 18 pages. Collection: Darden School of Business
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Product Overview

This case introduces Andrew Rees, CEO of Crocs, Inc., who is facing a challenge following the COVID-19 pandemic. Crocs had performed exceptionally well during the pandemic lockdowns: core product revenue had almost doubled to $2.3 billion in 2021. The market had seemed pleased, lifting the company’s share price from $40 in January 2020 to a record $180 in November 2021. Crocs’ recent acquisition of HEYDUDE, a casual footwear maker, was supposed to be another great step forward. Yet on May 25, 2022, the share price was 74% below the recent high, sitting at $49 per share. Rees did not see any reason for such a dramatic turn in a short time, and he was concerned that a drop of this magnitude could indicate changing investor expectations about Crocs. At that moment, his task was one of both cognition and action—he would have to understand what was driving the shift in market perception and then he would have to respond to two audiences: a disaffected and skeptical equity market and a fearful workforce. Both these audiences needed Rees to articulate a clear strategic direction for Crocs that was based on a sound and sustainable competitive advantage. Rees’s ability or inability to make that case could have discernable impact on the market’s valuation and the performance of Crocs’ workforce. The case links the company’s financial performance and shareholder value to the company strategy. It illustrates how investor beliefs about company strategy are accounted for in the share price. It also effectively demonstrates that finance can inform strategy in the shared goal of improving shareholder value.




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  • Overview

    This case introduces Andrew Rees, CEO of Crocs, Inc., who is facing a challenge following the COVID-19 pandemic. Crocs had performed exceptionally well during the pandemic lockdowns: core product revenue had almost doubled to $2.3 billion in 2021. The market had seemed pleased, lifting the company’s share price from $40 in January 2020 to a record $180 in November 2021. Crocs’ recent acquisition of HEYDUDE, a casual footwear maker, was supposed to be another great step forward. Yet on May 25, 2022, the share price was 74% below the recent high, sitting at $49 per share. Rees did not see any reason for such a dramatic turn in a short time, and he was concerned that a drop of this magnitude could indicate changing investor expectations about Crocs. At that moment, his task was one of both cognition and action—he would have to understand what was driving the shift in market perception and then he would have to respond to two audiences: a disaffected and skeptical equity market and a fearful workforce. Both these audiences needed Rees to articulate a clear strategic direction for Crocs that was based on a sound and sustainable competitive advantage. Rees’s ability or inability to make that case could have discernable impact on the market’s valuation and the performance of Crocs’ workforce. The case links the company’s financial performance and shareholder value to the company strategy. It illustrates how investor beliefs about company strategy are accounted for in the share price. It also effectively demonstrates that finance can inform strategy in the shared goal of improving shareholder value.

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