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Wolverine World Wide (WWW) Q3 Earnings: What to Expect?

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Wolverine World Wide Inc.WWW is scheduled to report third-quarter 2015 financial numbers before the opening bell on Oct 20, 2015. The big question facing investors is whether this leading footwear company can continue with its positive earnings surprise streak.

In the second quarter of 2015, the company registered a positive earnings surprise of 28.6%. Notably, the company has surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average earnings surprise of 11%. Here's a discussion on the determinants of third-quarter results:

Zacks Model Shows Unlikely Earnings Beat

Our proven model does not conclusively show that Wolverine World Wideis likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Wolverine World Wide has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are at 48 cents. The company carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Factors Influencing This Quarter

Strengthening of the U.S. dollar is likely to have an adverse impact on the company's performance in the quarter to be reported, given its huge overseas operations.

Further, the company's earnings in the third quarter are expected to be affected by a number of factors. Earnings benefits of 2 cents, which the company was expected to receive in the third quarter were received in the second quarter of 2015. Previously, the company had stated that its marketing and advertising expenses in the third quarter are expected to increase 40%, which will also affect its performance.

Moreover, exit of the Patagonia Footwear license, store closures and extensive brand building exercise will weigh on Wolverine's performance.

Stocks that Warrant a Look

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

American Eagle Outfitters, Inc. AEO has an Earnings ESP of +10% and a Zacks Rank #2 (Buy).

L Brands, Inc. LB has an Earnings ESP of +2.08% and a Zacks Rank #3.

The Children's Place, Inc. PLCE has an Earnings ESP of +1.54% and a Zacks Rank #3.

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AMER EAGLE OUTF (AEO): Free Stock Analysis Report

WOLVERINE WORLD (WWW): Free Stock Analysis Report

CHILDRENS PLACE (PLCE): Free Stock Analysis Report

L BRANDS INC (LB): Free Stock Analysis Report

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


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

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