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.
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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.