Why Wolverine World Wide, Inc. (WWW) Stock Is Wowing Shareholders

Page 1 of 2

Wolverine World Wide, Inc. (NYSE:WWW) will be one of the first companies to release its earnings for the quarter. But Wolverine World Wide stock has already anticipated strong results from the company next Tuesday, and even though analyst projections are calling for a decline in earnings from the year-ago quarter, massive sales growth should point the way to an earnings recovery in the long run.

Wolverine World Wide, Inc. (NYSE:WWW)

Wolverine World Wide, Inc. (NYSE:WWW) is part of the highly competitive footwear business, with its shoe offerings including its namesake Wolverine brand as well as Keds, Stride Rite, Saucony, and Hush Puppies. Let’s take an early look at what’s been happening with Wolverine World Wide over the past quarter and what we’re likely to see in its report.

Stats on Wolverine World Wide

Analyst EPS Estimate $0.34
Change From Year-Ago EPS (29%)
Revenue Estimate $591.03 million
Change From Year-Ago Revenue 89%
Earnings Beats in Past 4 Quarters 3

Source: Yahoo! Finance.

Why aren’t Wolverine World Wide’s earnings keeping up with its revenue growth this quarter?
Analysts have had mixed views on Wolverine World Wide, Inc. (NYSE:WWW)’s earnings prospects recently, cutting their estimates for the June quarter by $0.07 per share but boosting their full-year 2013 and 2014 consensus estimates by 1% to 2%. Wolverine World Wide stock has reacted favorably, rising more than 25% since early April.

The big move for Wolverine World Wide, Inc. (NYSE:WWW) came last year, when the company made a $1.2 billion purchase of the Performance and Lifestyle Group of Collective Brands, the parent company of the Payless ShoeSource chain. The move came as part of a group deal with private equity companies that were interested in the Payless retail business, but it gave Wolverine ownership of the popular Keds, Saucony, Stride-Rite, and Sperry Top-Sider brands. The deal has led to the huge gains in revenue that Wolverine World Wide, Inc. (NYSE:WWW) has seen, but it has also had an impact on earnings as the company works to integrate its purchase.

Even with that strategic acquisition, Wolverine faces a big challenge from competitors. Deckers Outdoor Corp (NASDAQ:DECK) has had to deal with investors’ skepticism about whether its UGG line of footwear can avoid the same fate that fad products from other companies have suffered in years past, but value investor Whitney Tilson notes that many UGG buyers see their shoes as a utilitarian rather than a fashion choice. Meanwhile, Saucony gives Wolverine World Wide, Inc. (NYSE:WWW) an entry into the athletic shoe industry, but NIKE, Inc. (NYSE:NKE) continues to dominate the industry with its strong gross margins. In order to disrupt NIKE, Inc. (NYSE:NKE)’s strength, Wolverine will need to emphasize Saucony’s focus on running shoes, aiming to capture business from runners who value attention to their specific needs rather than NIKE, Inc. (NYSE:NKE)’s broad array of shoes covering multiple sports.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!