Wolverine: Earnings Preview

| About: Wolverine World (WWW)
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Wolverine World Wide Inc. (WWW), one of the leading designers, manufacturers and marketers of branded footwear and apparel, is scheduled to report its third quarter 2010 financial results before the bell on Tuesday, October 5, 2010. The current Zacks Consensus Estimate for the quarter is 67 cents a share.

Second-Quarter 2010, a Synopsis
On July 15, 2010, Wolverine reported second quarter 2010 results that topped the Zacks Estimate and boosted the company’s outlook for the current fiscal year. The quarterly earnings of 39 cents per share outpaced the Zacks Consensus Estimate of 33 cents and soared 44.4% from 27 cents in the prior-year quarter.

Wolverine, selling its products under the brands Harley-Davidson Footwear, Hush Puppies, Merrell and others, revealed that total revenue for the quarter edged up 4.8% to $258.2 million from the prior-year quarter.

Wolverine at its last earnings call raised its fiscal 2010 projection based on robust second quarter results and increased order backlog of over 38%. The company now projects revenues in the range of $1,190 million to $1,220 million, reflecting year-over-year growth of 8.1% to 10.8%; and up from $1,160 million to $1,190 million predicted earlier.

Fiscal 2010 earnings are expected between $1.98 and $2.04 per share, representing year-over-year growth of 11.9% to 15.3%; and up from the guidance range of $1.92 to $2.00 per share provided previously.

Third-Quarter 2010 Consensus

Analysts surveyed by Zacks expect Wolverine to post third-quarter 2010 earnings of 67 cents per share. The current Zacks Consensus Estimate represents year-over-year growth of 8.1%. Estimates range from a low of 63 cents to a high of 72 cents.

The current Zacks Consensus Estimate has been stagnant over the last 30 days as none of the 10 analysts covering the stock revising their estimates. Nor have analysts revisited their estimates in the past 7 days.

With respect to earnings surprises, Wolverine has met or topped the Zacks Consensus Estimate over the last four quarters. It has outperformed the Zacks Consensus Estimate by an average of 14.4% in those four quarters.

Wolverine Holds Zacks #3 Rank
Currently, Wolverine maintains a Zacks #3 Rank, which translates into a short-term Hold recommendation. Our long-term rating on the stock is Neutral.

Given the past trends, we believe that this Rockford, Michigan-based company could surpass the Zacks Consensus Estimate. We observe that the momentum regained in fiscal 2009 continued in fiscal 2010 and it is well positioned to increase its market share on the strength of its brand portfolio and increased backlog. The Merrell brand has been the key growth driver in the past decade, and is expected to act as a catalyst for future growth.