Street stomps on Crocs

Shares of Crocs Inc. plunged 45 percent Friday after the shoemaker forecast earnings lower than its previous prediction, raising concerns that it may not be able to sell its colored foam clogs profitably.

Crocs may post its first drop in sales since it sold shares to the public in 2006 as retailers cut back on orders. The stock rose sevenfold in the 20 months after the initial share sale in February 2006, when investors bought on the hopes that forays into apparel and celebrity endorsements would sustain the company's revenue growth.

"It brings up serious questions about their business model," said Keri Spanbauer, a retail analyst at Minneapolis-based Thrivent Financial for Lutherans.

Crocs fell $4 Friday to close at $4.95, down 93 percent from the stock's record high of $74.75 on Oct. 31. The shoemaker said retailers cut back on clog orders as U.S. consumers spend less.

"It's a fad," retail consultant Walter Loeb said in an interview. "Many people have Crocs and, particularly with the weak economy, consumers may not be interested in new Crocs this year."