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Crocs, Express, Amazon, Google and Chipotle highlighted as Zacks Bull and Bear of the Day

Zacks Equity Research
·9 min read
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For Immediate Release

Chicago, IL – February 3, 2021 – Zacks Equity Research Shares of Crocs, Inc. CROX as the Bull of the Day, Express, Inc. EXPR as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Amazon.com, Inc. AMZN, Alphabet Inc. GOOGL and Chipotle Mexican Grill, Inc. CMG.

Here is a synopsis of all five stocks:

Bull of the Day:

Headquartered in Niwot, CO, Crocs is a leading specialty footwear retailer for men, women, and children. All Crocs shoes feature Croslite, a proprietary material that gives each pair of shoes a soft, comfortable, lightweight, non-marking, and odor-resistant quality that consumers know and love.

Best Annual Sales Ever?

Last month, CROX said that it’s set to report its best annual sales ever, driven by increased demand for its footwear during the coronavirus pandemic.

The retailer announced that it now expects 2020 revenue to fall in the range of $1.381 billion and $1.384 billion, which would mark a 12% jump from 2019’s revenue at the high end. This would mark record sales growth for Crocs, and its best-ever in 18 years.

Previously, Crocs was anticipating revenue growth between 5% to 7%.

“Amidst a global pandemic in 2020, we will deliver the strongest revenue in Crocs' history. Our brand momentum is exceptional, and we anticipate another record year in 2021. We remain focused on continuing to deliver sustainable, profitable growth for years to come,” said CEO Andrew Rees.

The company also said that it expects Q4 sales to spike 55% year-over-year.

CROX Breaks Out

In the past one-year period, shares of CROX have surged almost 100% compared to the S&P 500’s 18.6% increase. Earnings estimates have been rising too, and CROX is a Zacks Rank #1 (Strong Buy) right now.

For fiscal 2020, four analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up 30 cents to $2.93 per share. Earnings are expected to grow 82% compared to the prior year period. Fiscal 2021 looks strong too, and earnings should see double-digit year-over-year growth as well.

CROX does report earnings at the end of February, so these estimates and growth figures could change.

Like many other retailers, the coronavirus pandemic took a toll on Crocs; its brick-and-mortar stores were forced to close earlier for some time last year (most have now reopened), and its supply chain has certainly been affected.

But, Crocs is seeing a record resurgence in demand, and more people are turning to its comfort-forward shoes, especially as working from home has now become the norm.

Even though the growth rates seen during the Covid-19 crisis have slowed down a bit, the retailer expects to resume pre-pandemic growth levels in 2021. It’s forecasting another major sales jump this year, with its top line growing 20% to 25%.

If you’re an investor searching for a retail stock to add to your portfolio, make sure to keep CROX on your shortlist.

Bear of the Day:

Based in Columbus, OH, Express is a specialty men’s and women’s retailer that’s found predominantly in malls and shopping centers in the U.S. The company’s core customer is in their 20s and 30s, and offers work, casual, and going-out apparel.

Q3 Earnings Recap

Non-GAAP earnings sunk to a loss of $1.17 per share and revenue fell over 34% year-over-year to $322 million.

Comparable store sales plunged to -30% for the quarter, as demand for wear-to-work and occasion-based apparel items continue to be weak.

Looking at liquidity, Express ended the quarter with $107 million cash, and the company completed an additional 10% workforce reduction. This will help reduce expenses in 2021 by about $13 million.

While brick-and-mortar performance remains dismal, the retailer’s digital operations are gaining momentum. Q3 digital transactions increased 17% year-over-year, and conversion is up 10% over the prior year.

“As we move into 2021, we remain focused on delivering our long-term goal of a mid-single digit operating margin and profitable growth,” said CEO Tim Baxter.

Bottom Line

EXPR is now a Zacks Rank #5 (Strong Sell).

Two analysts have cut their full year earnings outlook over the past 60 days, and the consensus estimate has fallen 97 cents to a loss of $5.05 per share; earnings and sales are expected to experience major year-over-year declines for fiscal 2021, though the outlook looks brighter for fiscal 2022.

EXPR reports earnings in a few weeks, so investors should be aware that these figures could change.

Shares are down over 20% in the past one-year period, but have skyrocketed about 250% year-to-date.

Just like GameStop and AMC Entertainment, EXPR is a heavily-shorted stock (short interest stood at 13% last week) that Reddit traders took a unique interest in recently. This resulted in a bid to drive the price up in order to squeeze out hedge funds short-covering the stock.

But the WallStreetBets short squeeze is unraveling, and EXPR plunged over 32% on Monday.

Looking at its business, Express faces some tough headwinds going forward, mainly the lack of desire for its core apparel products.

Management is still focusing on building sufficient liquidity, as well as its long-term objective of sustained profitable growth. However, until the underlying uncertainty from the pandemic eases, it may be a rocky ride for Express for a little while longer.

Additional content:

Amazon, Google Post Big Q4 Beats; Chipotle Misses

Amazon has reported two powerful news items following Tuesday’s closing bell. The first is its Q4 earnings report, which doubled expectations on its bottom line: $14.09 per share zoomed past the $7.05 per share expected, and well beyond the $6.47 per share posted in the year-ago quarter. Revenues of $125.56 billion was also a marked improvement on the $120.36 billion estimated. This marks Amazon’s third-straight earnings beat; three of the previous four quarters were misses.

Also, CEO Jeff Bezos has found a replacement at the helm of Amazon: Andy Jassy, who had started up Amazon Web Services (AWS) and has run the money-making enterprise of the corporation since 2003. Bezos will be making himself Executive Chairman as of Q3 2021. Jassy has been an Amazon employee for 25 years, and is widely regarded as the main reason Amazon was able to step out to a seven-year lead in the cloud space among tech giants.

AWS came in a tad light of expectations in Q4, however — $12.8 billion versus the $12.7 billion estimate. Both North America and International revenues came in stronger than expected, however, and the company upped revenue guidance for Q1 to a range of $100-106 billion. The Zacks consensus for the #3-ranked (Hold) stock ahead of the earnings release was for $95.71 billion. Shares have bounced around since the announcement; whether Bezos taking himself out of the day-to-day decision-making may be weighing on the stock in late trading.

Google parent Alphabet also put up big numbers in its Q4 earnings report after the closing bell, with earnings of $22.30 per share easily surpassing the $15.91 in the Zacks consensus. Revenues — minus traffic acquisition costs (TAC), which the company does not report in its headline sales figure — reached $46.43 billion in the quarter, higher than the $44.1 billion our analysts were expecting. A strong quarter from Search and YouTube helped propel the company, and Cloud revenues grew 47% year over year, to $3.8 billion.

Chipotle has put up its second earnings miss in the past three quarters, however, with earnings of $3.48 per share missing the Zacks consensus of $3.70. Revenues were exactly in-line with estimates, to $1.61 billion. Q4 comps were in-line with expectations, +5.7%. Shares are down 4% following the earnings release. Prior to the two negative earnings surprises in the past three quarters, Chipotle had not disappointed on its bottom line since Q3 2017.

Questions or comments about this article and/or its author? Click here>>

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Click to get this free report Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report Express, Inc. (EXPR) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research