Wolverine World Wide Inc
), one of the leading designers, manufacturers and marketers of
branded footwear and apparel, announced the offering of $375
million worth of senior notes.
The company stated that the issue will have the guarantee of its
certain domestic subsidiaries, and is scheduled to mature in
The announcement reflected the company's strategic approach to
utilize the proceeds from the debt offering to fund its acquisition
of the Performance + Lifestyle Group business (the "PLG Business")
Collective Brands Inc
). Moreover, the company intends to repay loans under its credit
facility with the amount.
Earlier in May, Wolverine announced the acquisition of
Collective Brands' Performance + Lifestyle Group (PLG) unit. The
PLG unit sells footwear and related products, both wholesale and
retail, for children and adults under popular brands including
Stride Rite, Sperry Top-Sider, Saucony, and Keds.
Moreover, after its dismal second quarter results, it is
encouraging to observe the company's focus on enhancing its
portfolio of brands, as the deal will provide ample opportunities
to boost its profitability.
The company posted lower-than-expected second-quarter 2012
results, however management maintained its earnings guidance for
the current fiscal. Wolverine expects fiscal 2012 earnings between
$2.70 and $2.80 a share, representing a growth of 8.9% to 12.9%
from the prior year.
Further, Wolverine expects total revenue in the range of $1.46
billion to $1.50 billion for fiscal 2012, reflecting a
year-over-year growth of 3.6% to 6.4%.
For the third quarter of 2012, the company expects revenues to
be in the low-to-mid-single-digit range, while earnings are
expected to remain flat year over year.
Currently, we are maintaining a long-term 'Neutral'
recommendation on the stock. However, Wolverine, which competes
Deckers Outdoor Corporation
Skechers USA Inc
), has a Zacks #4 Rank that translates into a short-term 'Sell'
rating as secular headwinds act as short-term deterrents.
DECKERS OUTDOOR (DECK): Free Stock Analysis
COLLECTIVE BRND (PSS): Free Stock Analysis
SKECHERS USA-A (SKX): Free Stock Analysis
WOLVERINE WORLD (WWW): Free Stock Analysis
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