Wolverine World Wide Inc.
) has posted better-than-expected bottom-line results in the past
four quarters, thereby securing itself in a comparatively
favorable position. With the company providing an upbeat guidance
for 2013 and the economy showing signs of recovery, we expect
Wolverine's robust performance to continue going forward.
The company kept its earnings streak alive by beating the Zacks
Consensus Estimate in the trailing four quarters. The company
posted a positive earnings surprise of 11.5% in the third
quarter, 35.3% in the second quarter and 51.9% in the first
quarter of 2013. Moreover, in the fourth quarter of 2012, the
positive earnings surprise was 200.0%.
Additionally, Wolverine's global net sales grew over two times in
the third quarter, rose 88% in the second quarter and twofold in
the first quarter of 2013. Furthermore, sales had increased 60.5%
in the fourth quarter of 2012. Top-line expansion benefited
primarily from the acquisition of Collective Brands' Performance
+ Lifestyle Group (PLG) group.
Buoyed by stronger-than-anticipated quarterly third-quarter 2013
results, management raised its earnings guidance. Adjusted
earnings per share are now likely to be in the range of
$2.73-$2.83, up from the earlier projection of $2.60-$2.75,
thereby marking year-over-year growth of 19.2% to 23.6%.
Revenues are expected to be in the band of $2.71-$2.73 billion,
up 6.4% to 7.1% year over year on a pro-forma basis. For
fourth-quarter 2013, the company anticipates revenues to be
$750-$780 million, reflecting growth of 3.2% to 6%.
Going forward, we believe Wolverine's operational efficiencies,
its formidable 16-brand portfolio and leverage from the recent
acquisitions well positioned it to generate healthy sales.
Moreover, exclusive assortments remain popular among consumers
and impart it a competitive edge.
Barring a few hiccups, the share price has been surging and most
recently it hit a new 52-week high of $34.10 on Dec 31, before
closing at $33.96. Moreover, this Zacks Rank #2 (Buy) stock
amassed a return of roughly 68.2% over a year.
Based on the current price, this retailer is 20.2% above the
Zacks Consensus average analyst price target of $28.25. The
company currently trades at a forward P/E of 24.1x, a premium of
26.4% to the peer group average of 19.06x. Additionally, the
company's long-term estimated earnings per share (EPS) growth
rate is 12.5%.
Apart from Wolverine, other stocks such as
Foot Locker, Inc.
Gannett Co., Inc.
) achieved new 52-week highs of $141.39, $41.63 and $29.87,
respectively on Tuesday.
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