Earnings Preview: Wolverine - Analyst Blog
April 20 2012 - 9:30AM
Zacks
Wolverine World Wide,
Inc. (WWW), one of the leading designers, manufacturers
and marketers of branded footwear and apparel, is scheduled to
report its first-quarter 2012 financial results before the opening
bell on Monday, April 23, 2012.
The current Zacks Consensus Estimate
for the quarter is 54 cents a share, which reflects a decline of
25% from the prior-year quarter’s earnings. The estimates in the
current Zacks Consensus range between a low of 52 cent and a high
of 56 cents a share. The Zacks Consensus estimates revenue at $334
million for the first quarter.
Recap of Fourth-Quarter
2011
On January 30, 2012, Wolverine
posted soft fourth-quarter 2011 results. Decline in margins took a
toll on the company’s earnings as Wolverine reported quarterly
earnings of 47 cents a share, down 9.6% from the prior-year
quarters’ earnings of 52 cents a share. However, the earnings
exceeded the Zacks Consensus Estimate by a couple of cents.
Wolverine, the seller of products
under Harley-Davidson Footwear, Hush Puppies, Merrell and other
brands, marked an increase of 5.6% year over year in its top line
to $406.5 million. However, the reported revenue lagged behind the
Zacks Consensus Estimate of $412 million.
(Refer the article: Wolverine Beats,
Profit Dips)
Guidance
Wolverine at its last earnings call
guided fiscal 2012 total revenue in the range of $1,485 million to
$1,525 million, reflecting a year-over-year growth of 5.4% to 8.2%,
and projected earnings between $2.60 and $2.70 per share,
representing a growth of 4.8% to 8.9% from the prior year.
Zacks Agreement &
Magnitude
No movement was noticed in the Zacks
Consensus Estimate for the first quarter of 2012, either in the
last 7 or 30 days, since 10 analysts covering the stock kept their
estimates intact, in the absence of any major news having a direct
or an indirect impact on the estimates.
Positive Earnings
Surprise History
With respect to earnings surprises,
Wolverine has topped the Zacks Consensus Estimate over the last
four quarters by an average of 6%. Given the past performance we
expect the company to outperform the Zacks Consensus Estimate this
time too.
Wolverine Holds Zacks #3
Rank
Rockford, Michigan-based Wolverine
enjoyed increased momentum in fiscal 2011, which we expect to
continue into fiscal 2012. Moreover, we believe that the company
remains well positioned to increase its market share on the
strength of its brand portfolio. The Merrell brand has been the key
growth driver in the past decade, and we expect it to catalyze
future growth. The company’s multi-brand portfolio, geographical
diversification, and multi-distribution channel strategy remain its
key growth drivers.
However, given the current global
macroeconomic environment and intense competition from
Timberland Co. (TBL), Deckers Outdoor
Corporation (DECK) and Skechers USA Inc.
(SKX), we prefer to have a long-term “Neutral” recommendation on
the stock. Moreover, Wolverineholds Zacks #3 Rank that translates
into short-term “Hold” rating.
DECKERS OUTDOOR (DECK): Free Stock Analysis Report
SKECHERS USA-A (SKX): Free Stock Analysis Report
WOLVERINE WORLD (WWW): Free Stock Analysis Report
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