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
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!