Why I Prefer Crocs over Under Armour

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I bought some Crocs stocks (CROX) a while ago; actually I looked at Under Armour (UA) at the same time and I am glad I made the correct decision (so far). Besides the difference of PE ratio, CROX is 42, UA is 76 (supposedly the lower PE means the price is cheaper). I made this decision more based on the business prospects.

From my observation, Crocs are sold in a lot more stores than Under Armour, which are only sold in Sporting Good stores. In other words, Crocs have a wider distribution channel. This is very important for consumer goods. By the same token, I found Crocs have a wider appeal to consumers, especially kids. Under Armour has made efforts to reach women and kids but they are not there yet.

More importantly, Under Armour is only successful in the United States at this time. This is because UA’s original products are sporting underwear for football players (they expand to baseball now). Both sports are traditionally US sports. Since basketball and soccer are the sports of the world, Nike and Addidas are very successful in the international markets, I believe UA will face very intense competition from those two guys. I really doubt UA will be successful in China.


  1. Crocs went out and created its own niche market with the Crocs footwear line. Not to knock Under Armour, but their apparel is very similar to Nike or Adidas as you said.

    What’s great about Crocs is their fast international growth. International Sales grew almost 1000% last year, and don’t seem to be trailing off.

    I wrote more in-depth about the Crocs International Growth possibilities on my site.

  2. Yes. I was aware of your article of Crocs, and it was well written.

    I think UA also started at a niche (sports underwear). Unfortunately sports underwear does not has the market potential as big as Crocs. There is nothing wrong to compete against Nike/Addidas. It’s not easy though.

    By the same token, I am thinking Heelys (HLYS) could felt into the same category as UA, if the skating shoes business does not turn out big…

  3. Notice what leads to the success of the crocs is the built in material-Croc’s cell resin which make the footwear so light and comfortable yet anti-bacteria. Still remember the first time that I saw the crocs is that an old lady wearing the weird black shoes full of holes in the chilly winter season but with thick socks two years ago. Upon people’s staring, she explained it with an excited tone:”I just love this shoes, it is so comfortable and I got two pairs. I don’t want wear other shoes anymore.” Well, as to its developing mode, although it started from the comfort, actually it is leading to a fashion and necessary… Yet should be awared that some faked shoes on the shelf already which needs to be considered for the international growth trend but up to the countries…

    Seems like an Ads, of course not.

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