Using Analytic Techniques to Add Meaning to Data
History
Headquartered in Broomfield, CO, Crocs, Inc. is a
publicly traded company (Nasdaq: CROX) with around 6000 employees. Crocs is one
of the top ten global leaders in the non-athletic footwear industry. The
company’s brands include Crocs and HEYDUDE, which are sold in over 85 countries
and distributed through wholesale and business-to-consumer channels (Crocs,
2024, May). In 2022, Crocs, Inc. acquired HEYDUDE to help the company with its
global expansion. This Italian company started in 2008 with similar goals “to
develop comfortable, versatile, and accessible footwear”(Crocs, 2021, para. 3).
Crocs sells approximately 150 million pairs of shoes annually, earning approximately
four billion in sales each year (Crocs, 2024, May). As of September 30th, 2023,
Crocs reported revenue growth in Asia at 37%,
America at 7%, and Europe, the Middle East, Africa, and Latin
America (EMEALA) at 17% (Crocs Inc, 2024 January).
Crocs' history began in 2002 when George Boedecker Jr.
and Lyndon Hanson wanted to create a safe, waterproof, and convenient boating
shoe. Boedecker and Hanson partnered with the Foam Creations company to create
a lightweight, waterproof shoe from a proprietary Croslite foam (Crocs, 2005).
The company created Crocs shoes, which Boedecker and Hanson introduced at a
Florida boat show, and they quickly gained regional popularity. Over the past
twenty years, the company has expanded globally, offering different variations of
Crocs (Crocs, 2005).
Product
Boedecker and Hanson designed the Croc to be lightweight
(only six ounces), breathable, supportive, comfortable with grip-focused soles,
and waterproof. Crocs are like sandals and clogs, but they are different from
any shoe available on the market upon its release (Crocs, 2005). The company’s
competitive advantage is its product differentiation. Crocs manufactures its
shoes using the company’s proprietary closed-cell resin, Croslite (Crocs
Australia, 2024). Because of this
material, Crocs perform well on land and sea, like crocodiles, which is why the
animal is the shoe’s logo and namesake (Croc Australia, 2024). By 2005, Crocs
Inc. offered eight types of Crocs in various colors (Crocs, 2005). Today, the
company offers over “120 styles for men, women, and children...for any occasion
and every season”(Crocs Australia, 2024, para. 1). Styles of Crocs include the classic
clog, cozy slippers, sandals, platforms, wedges, slides, loafers, boots, and
its street-stylish Echo line (Crocs Retail, 2024). HEYDUDE offers hundreds of comfortable,
causal loafers, mules, sandals, platforms, and boots, all constructed with
lightweight materials like cotton, canvas, and hemp (HEYDUDE, 2024). Most Crocs
and HEYDUDE products fall within the price range of twenty to eighty dollars,
with the more luxury styles on the high end.
Mission
Crocs, LLC.’s mission is to “bring
profound comfort, fun,
and innovation to the world’s feet” (Crocs Australia, 2024, para. 3). Crocs, LLC. is “
committed to reducing our environmental footprint, uplifting our communities,
and creating a welcoming environment for everyone, rooted in a culture of
sustainability, governance, transparency, and accountability” (Crocs Retail,
2024, para. 1). The company is meeting these goals with through its extensive
product selection and with its plan to reach net zero sustainability by
reducing its manufacturing and packaging carbon footprint, and donating shoes
and funds through its Crocs Cares program (Crocs Retail, 2024).
Competition
The 305B non-athletic footwear market is worth 305
billion, comprised of 142 billion for dress and fashion shoes, 125 billion for
casual shoes, 30 billion for sandals, and eight billion for clogs (Crocs Inc,
2024 January). Crocs is one of the top global leaders in the casual footwear
industry. Sketchers, Deckers, Wolverine, Steve Madden, Birkenstock, and Allbirds
are competitors within the industry. For reported revenue for 2023, Sketchers
made eight billion, Deckers reported four billion, Crocs had just under four
billion, Wolverine had two billion, Steve Madden and Birkenstock made under two
billion, and Allbirds reported less than one billion (Crocs Inc, 2024 January).
Crocs, Inc. and HEYDUDE have the potential for substantial market growth.
Graphical
Representations of Data
Figure 1
Scatterplot of the Highest Stock Prices
Note: Data pulled from Yahoo Finance.
https://finance.yahoo.com/quote/CROX/
A scatterplot represents the relationship
between two variables as dots along an x-axis and y-axis (Capella, 2024). The
independent variable, Date (MM/DD/YYYY), is plotted along the x-axis in
correlation to the dependent variable on the y-axis, Stock Prices in U.S.
Dollars. The Scatterplot of the Highest Stock Prices chart was created in
Excel with data compiled from Yahoo Finance from 7/23/2023 to 7/23/2024. The
data was placed in columns, and the date and highest stock prices columns were
arranged side-by-side. The data in both columns were highlighted, the insert
tab was selected, charts were selected in the drop-down, more scatter
charts were selected, and the scatterplot was chosen and generated from the
data. By calculating the correlation coefficient r, one can measure the
strength of the relationship between the date and price. The correlation
coefficient can range from -1 to 1, with -1 representing a perfectly inverse
correlation and +1 indicating a perfectly positive correlation. An r of
0 would indicate no correlation (Lind et al., 2022). Using the CORREL function
in Excel, the correlation coefficient for this scatterplot is 0.82, indicating
a moderately strong positive correlation.
Figure 2
Scatterplot of the Lowest Stock Prices
Note: Data pulled from Yahoo Finance.
https://finance.yahoo.com/quote/CROX/
The Scatterplot of the Lowest Stock Prices
chart was created in Excel with data compiled from Yahoo Finance from 7/23/2023
to 7/23/2024. Like the previous scatterplot, the data was placed in columns,
and the date and lowest stock prices columns were arranged side-by-side. The
data in both columns were highlighted, then the insert tab was selected,
charts was selected in the drop-down, more scatter charts was
selected, and the scatterplot was chosen and generated from the data. Using the
CORREL function in Excel, the correlation coefficient for this scatterplot is also
.082, indicating a moderately strong positive correlation.
Figure 3
Histogram of Adjusted Stock Price
Note: Data pulled from Yahoo Finance.
https://finance.yahoo.com/quote/CROX/
A histogram is a graphical representation of
a variable's frequency of occurrence or probability distribution (Capella,
2024). A histogram can indicate relationships, patterns, and distributions of
values like skews. A histogram has two dimensions: "The x-axis represents
ranges of values distributed in equal, continuous intervals, and the y-axis
represents the number of occurrences of a phenomenon” (Capella, 2024, p. 4). The
data determines the bin and width appropriate for the data set (Capella, 2024).
The Histogram of the Adjusted Stock Price chart was created in Excel using the
Data analysis tool. However, before using the tool, one must determine the
correct bin size by locating the lowest and highest values for the adjusted
stock prices. The data was added to a separate column to find these values and
then sorted from high to low. The lowest adjusted closing stock price was $77.27,
and the highest was $ 159.68. Using the “2 to the k rule’, to support
the class number of 253 days, 2k must be equal to or greater
than 253, so 28 is sufficient since 28=256 (Lind et al.,
2022). The formula for the class interval is the maximum value minus the
minimal value/k, so the class interval is ten because (159.68 – 77.27)/8
= 10.3. Therefore, the bins are set as 70,80,90,100,110,120,130,140,150, and 160 to accommodate the data.
Next, the Data Analysis tool was used, the Histogram option was selected, the
input range and bin range were highlighted and selected for the appropriate
fields, and the chart was created.
The resulting Histogram of the Adjusted Stock
Price ranges from 80 to 160, with only nine bins used. The histogram is bimodal,
with data clusters around 90 to 110 and 130 to 150, and 89% of the occurrences
are within these ranges. There are 136 occurrences in the 90 to 110 range,
which is 54% of the data. There are 89 occurrences clustered around the 130 to
150 bins, which is 35% of the total occurrences. Over half of the days of the
year, the adjusted stock price for Crocs, Inc. was around $90 to $110; on three
days out of the year, the stock sold for its lowest price of around $80, and
the stock was the highest price at the 150 to 160 range for 49 days or 19% of
the year.
Figure 4
Histogram of Stock Trade Volume
Note: Data pulled from Yahoo Finance.
https://finance.yahoo.com/quote/CROX/
The x-axis for the Histogram of Stock Trade
Volume is the bins or ranges of the stock trade volume, and the y-axis is the
number of occurrences. Like the Histogram of the Adjusted Stock Price, the
Histogram of Stock Trade Volume was created in Excel following the same steps
using the stock trade volume data. The lowest value for the trade volume was
437,500, and the highest was 10,487,000, so the bin number was set to 11, ranging from 1,000,000
to 11,000,000. The bin and stock volume were input into the Data Analysis tool to
create the histogram. The histogram shows a solid skewness for the left, with most
of the data occurrences around one to three billion bins. 96.8% of the data
falls within this range. Most of the trade volume (173 occurrences) happens
around two billion, 68% of the data.
Descriptive Analytics
Mean, median, and mode can help determine a
data set's central tendency. Standard deviation can help explain a data set's
characteristics, such as variation and dispersion from the mean. Mean is the
average value of a data set. The median determines the center of a data set.
Mode is the value that occurs the most often within a data set, and standard
deviation measures the dispersion of the values from the mean (Capella, 2024). Excel
formulas were used to calculate all four values for the adjusted closing stock
price and volume.
Figure 5
Mean, Median, Mode, and Standard Deviation of the Adjusted Daily Closing
Stock Price
|
Adjusted Stock Price |
|
|
Mean |
113.513913 |
|
Median |
104.989998 |
|
Mode |
96.839996 |
|
Std. Dev. |
22.63798278 |
Note: Data pulled from Yahoo Finance.
https://finance.yahoo.com/quote/CROX/
Figure 6
Mean, Median, Mode, and Standard Deviation of the Stock Volume
|
Stock Volume |
|
|
Mean |
1450758.696 |
|
Median |
1220300 |
|
Mode |
1074300 |
|
Std. Dev. |
965426.7307 |
Note: Data pulled from Yahoo Finance.
https://finance.yahoo.com/quote/CROX/
To calculate the mean
in Excel, select the Formula tab, then select More Formulas, then select
Statistical, and then select AVERAGE from the drop-down list. The range of data
is then inputted, or highlighted, into the field labeled Number 1. To calculate
the median, select the Formula tab, select More Formulas, then Statistical, and
then select MEDIAN from the drop-down list. Again, the data range is either
entered or inputted into the Number 1 field, and the calculation will be
generated for whichever empty cell is selected. The same steps are followed to
calculate the MODE and standard deviation, STDEV.S.
Summary
The Scatterplot of the Highest Stock Prices and Lowest Stock prices indicates
a moderately strong positive linear relationship wherein the highest and lowest
values for the stock prices have gradually increased over the year. While the
scatterplot contains several valleys and peaks, the values stay relatively
close to the trend line, as explained by the correlation coefficient of 0.82 for both scatterplots. The Histogram of
the Adjusted Stock Price is bimodal, with data clusters around 100 and 140. The
mean is 113.5, and the median is 105. The standard deviation for the adjusted price
is 23.64, which indicates that the data is dispersed widely. The standard
deviation for the volume is 965,426. Because of the large spread and tendency
to rise and fall, these are potential indicators of a high-risk stock, but
further analysis is required to determine this.
High volatility is often associated with significant
peaks and dips where the prices change dramatically over a short period. Low
volatility means less fluctuation and, therefore, a less risky stock. Higher
volatility means the price is more likely to fluctuate dramatically over a
short period, thus making it a riskier option (Hayes, 2024). Volatility = σ√T
where σ is the standard deviation of returns and T is the number of periods in
the time horizon (253) (Hayes, 2024). To
calculate this, each daily adjusted price is subtracted from the mean, squared
to eliminate the negative values, and added together (= 129144.53). The total
is divided by the number of days (253) to equal the variance (=510.45). The
square root of the variance gives the standard deviation (=22.59). The standard
deviation of the returns is 22.59, which indicates Crocs’ stock price
fluctuations make Crocs, Inc. a risky investment.
References
Capella
University. (2024). Using analytic techniques to add meaning to data
[Video transcript].
https://media.capella.edu/coursemedia/mba5008element19233/wrapper.asp
Crocs
Australia. (2024). About Crocs. https://www.crocs.com.au/company/about-crocs.html
Crocs, Inc.
(2021, December 2023). Crocs, Inc. to acquire casual footwear brand HEYDUDE
[Press release].
https://investors.crocs.com/news-and-events/press-releases/press-release-details/2021/Crocs-Inc.-to-Acquire-Casual-Footwear-Brand-HEYDUDE/default.aspx
Crocs, Inc.
(2024, January). A leader in global casual footwear [Video]. https://s22.q4cdn.com/133460125/files/doc_presentations/2024/01/2024-ICR-Presentation-vF-1.pdf
Crocs, Inc.
(2024, May 7). Investor relations. Crocs Corporate Website. https://investors.crocs.com/overview/default.aspx
Crocs, Inc.
(2025, September 14). Croc and roll [Press release].
https://investors.crocs.com/news-and-events/press-releases/press-release-details/2005/Croc-and-Roll/default.aspx
Crocs Retail, LLC. (2024). Green comes in every color. https://www.crocs.com/crocs-purpose.html
Hayes, A. (2024, July 3). Volatility: Meaning in finance and how it
works with stocks.
Investopedia.https://www.investopedia.com/terms/v/volatility.asp#:~:text=How%20to%20Calculate%20Volatility,is%20$2%2C%20and%20so%20on.
HEYDUDE. (2024). About us. https://www.heydude.com/pages/about-us-1
Lind, D. A., Marchal, W. G., & Wathen, S. A. (2022). Basic
statistics for business and economics (10th ed.). McGraw-Hill.
Yahoo Finance. (2024, July 23). Crocs, Inc. (CROX).
https://finance.yahoo.com/quote/CROX/
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