Wolverine Earnings Preview

| About: Wolverine World (WWW)

Wolverine World Wide, Inc. (NYSE:WWW), one of the leading designers, manufacturers and marketers of branded footwear and apparel, is scheduled to report its first-quarter 2011 financial results before the bell on Tuesday, April 19. The current Zacks Consensus Estimate for the quarter is 66 cents a share. For the quarter under review, revenue is $324 million, according to the Zacks Consensus Estimate.

Fourth-Quarter 2010: A Synopsis

On February 1, Wolverine reported fourth-quarter 2010 results that topped the Zacks expectation on the heels of strong demand witnessed across its brands. The company also provided an impressive outlook for fiscal 2011 on a strong order backlog.

The quarterly earnings of 52 cents a share outpaced the Zacks Consensus Estimate of 46 cents and grew 15.6% from 45 cents earned in the prior-year quarter. Wolverine, who sells its products under the brands Harley-Davidson Footwear, Hush Puppies, Merrell, and others, said its total revenue for the quarter climbed 23.2% to $385 million from the prior-year quarter, and handily beat the Zacks Consensus Estimate of $356 million.


At its last earnings call, Wolverine projected fiscal 2011 total revenue in the range of $1,350 million to $1,390 million, reflecting a year-over-year growth of 8.1% to 11.3%. Fiscal 2011 earnings are expected between $2.35 and $2.45 per share, representing a year-over-year growth of 8% to 13%.

First-Quarter 2011 Consensus

Analysts surveyed by Zacks, expect Wolverine to post first-quarter 2011 earnings of 66 cents a share. The current Zacks Consensus Estimate represents a year-over-year growth of 17.9%. The current Zacks Consensus Estimate for the quarter range from a low of 64 cents to a high of 68 cents.

Zacks Agreement & Magnitude

Of the 10 analysts following the stock, only one analyst revised the estimate upwards in the last 30 and seven days, without any material impact on the current Zacks Consensus Estimate. The Estimate remains stagnant at 66 cents a share.

Positive Earnings Surprise History

With respect to earnings surprises, Wolverine has topped the Zacks Consensus Estimate over the last four quarters in the range of 4.5% to 18.2%. The average remained at 12.5%. This suggests that Wolverine has beaten the Zacks Consensus Estimate by an average of 12.5% in the trailing four quarters. Given the past performance we expect the company to outperform the Zacks Consensus Estimate.

Wolverine Holds Zacks #2 Rank

Rockford, Michigan-based Wolverine enjoyed increased momentum in fiscal 2010, which is expected to continue into fiscal 2011. Moreover, we believe that the company remains well positioned to increase its market share on the strength of its brand portfolio. The Merrell brand has been the key growth driver for the past decade, and we expect it to catalyze future growth. The company’s multi-brand portfolio, geographical diversification, and multi-distribution channel strategy remain its key growth drivers.

Wolverine, which competes with Timberland Co. (NYSE:TBL), Deckers Outdoor Corporation (NASDAQ:DECK) and Skechers USA Inc. (NYSE:SKX), maintains a Zacks #2 Rank, which translates into a short-term Buy recommendation.

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Tagged: , Textile - Apparel Footwear & Accessories, Earnings
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