Back to Main

Wolverine Hits New High - Analyst Blog

Posted: 10/15/2013 10:30:00 AM
Referenced Stocks: BBY;EPS;HI;PLG;STZ

Shares of Wolverine World Wide Inc. ( WWW ) touched a new 52-week high of $60.83 on Oct 14, 2013. The stock gained momentum on the back of the company's better-than-expected third-quarter bottom-line results and upbeat guidance for fiscal 2013. This apparel-footwear retailer has amassed a year-to-date return of 50.6%.

The average volume of shares traded over the last 3 months was approximately 426.6K. Moreover, the company currently trades at a forward P/E of 21.6x, a 3.9% premium to the peer group average of 20.78x. The last traded price is 8.5% above the Zacks Consensus average analyst price target of $56.00. Additionally, the company's long-term estimated earnings per share (EPS) growth rate is 12.5%.

Investors are optimistic about this Zacks Rank #3 (Hold) stock as it posted EPS of $1.16 that handily surpassed the Zacks Consensus Estimate of $1.05 and rose 61.1% year over year. Wolverine reported net sales of $716.7 million that more than doubled on a year-over-year basis and came ahead of the Zacks Consensus Estimate of $711 million. Moreover, on a pro-forma basis, revenues increased 9.0% in the quarter.  

Results benefited mainly from the acquisition of Collective Brands' Performance + Lifestyle Group (PLG) group.

Buoyed by stronger-than-anticipated quarterly results, management raised its earnings guidance. Adjusted EPS are now likely to be in the range of $2.73-$2.83, up from the earlier projection of $2.60-$2.75, and indicating year-over-year growth of 19.2% to 23.6%.

Revenues are expected to be in the range of $2.71-$2.73 billion, up 6.4% to 7.1% year over year on a pro-forma basis. For fiscal fourth-quarter 2013, the company anticipates revenues in the band of $750-$780 million, reflecting growth of 3.2% to 6%.

Wolverine's history of positive earnings surprises also make investors optimistic about the stock. We observe that the company has beaten the Zacks Consensus Estimate in the past 4 quarters by an average of 73.9%.

Going forward, we believe that with its operational efficiencies, a formidable 16-brand portfolio and leverage from the recent acquisitions, Wolverine is well positioned to generate healthy sales. The company's exclusive assortments remain popular among consumers and impart it a competitive edge.

Apart from Wolverine, other retail stocks such as Constellation Brands Inc. ( STZ ), Hillenbrand, Inc. ( HI ) and Best Buy Co., Inc. ( BBY ) achieved new 52-week highs of $63.44, $29.40 and $39.66, respectively, on Oct 14, 2013.

BEST BUY (BBY): Free Stock Analysis Report

HILLENBRAND INC (HI): Free Stock Analysis Report

CONSTELLATN BRD (STZ): Free Stock Analysis Report

WOLVERINE WORLD (WWW): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research