Wolverine Upgraded to Strong Buy - Analyst Blog


On Jul 10, 2013, Zacks Investment Research upgraded Wolverine World Wide Inc . ( WWW ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Wolverine came up with strong second-quarter 2013 results, owing to the robust performance of its newly acquired brands. The company's quarterly earnings of 46 cents a share zoomed past the company's previous guidance range of 31 cents - 35 cents and handily surpassed the Zacks Consensus Estimate of 34 cents. Moreover, the quarterly earnings jumped 12.2% year over year.

Top line surged 88% year over year to $587.8 million, while gross margin expanded 320 basis points to 41%, reflecting increased contribution from high margin consumer direct operations.

Based on its progress, the company raised its earnings per share projection for fiscal 2013 to $2.60 - $2.75 from $2.50 - $2.65. However, its sales guidance of $2.7 billion - $2.775 billion, up 6% to 8.9% year over year on a pro-forma basis was reiterated.

Gross margin is expected to improve moderately in 2013 due to the product mix shift toward high margin consumer direct business and lower markdowns.

We remain upbeat on Wolverine's fundamentals and believe that the strong performance of the company's brands is likely to boost its profitability in the upcoming quarters.

Other Stocks to Consider

Besides Wolverine, the other stock in the consumer discretionary sector worth considering includes Brown Shoe Co. Inc . ( BWS ), which carries a Zacks Rank #1 (Strong Buy). Big 5 Sporting Goods Corp. ( BGFV ) and Deckers Outdoor Corporation ( DECK ), both carrying a Zacks Rank #2 (Buy) are also worth considering.

BIG 5 SPORTING (BGFV): Free Stock Analysis Report

BROWN SHOE CO (BWS): Free Stock Analysis Report

DECKERS OUTDOOR (DECK): Free Stock Analysis Report

WOLVERINE WORLD (WWW): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: BGFV , BWS , DECK , WWW

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