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Wolverine (WWW) Rides High on Growth Strategies: Apt to Hold
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Wolverine World Wide, Inc. (WWW - Free Report) appears encouraging on the back of its robust business strategies. The company is focused on developing brands that aptly suit consumer needs on the back of advanced technologies and accurate market insights. WWW is striving to develop an efficient sourcing structure and diversify its global business as well as strengthen its direct-to-consumer (DTC) channel.
Buoyed by such endeavors, shares of this designer of casual and active apparel have increased 19.6% in the year-to-date span, outperforming the industry’s 2.6% drop.
Analysts seem optimistic about the company. For 2024, the Zacks Consensus Estimate for sales and earnings per share (EPS) is pegged at $2.61 billion and $2.26, respectively. These estimates show corresponding year-over-year growth of 2.3% and 51.1%. Also, the consensus estimate for the current year’s EPS is currently pegged at $1.49, reflecting a year-over-year increase of 5.7%.
Let’s Delve Deep
Wolverine’s multichannel strategy is progressing well. Management had initiated a 100-day action plan, including a focus on inventory reduction, debt management, Keds sale and the creation of a profit improvement office to grab savings to drive growth. The profit improvement office is on track to generate $65 million of cost savings this year. Management expects $150 million of annual savings from the profit improvement office in 2024.
Image Source: Zacks Investment Research
The international business remains one of the company’s key drivers. WWW’s international business was robust in the first quarter and improved 12.6% to $249.7 million. International revenues increased 18% in constant currency. The company’s brands resonated well across global markets and management sees major opportunities in both owned and JV-operated markets. Merrell and Saucony were the major drivers across regions, generating 29% growth and 37% growth, respectively. Saucony's China JV delivered a sturdy quarter as sales increased more than 100%, reflecting strength in its multichannel strategy.
Additionally, the company focuses on the brand structure, increasing efficiency by removing costs, reviewing its portfolio strategically, improving working capital and lowering leverage. We note that the sale of Keds and the pending licensing of Hush Puppies transitions are well underway. It is also on track to divest the Wolverine leather business. The company looks forward to making further investments in Merrell and softening its lifestyle businesses as well as enhancing Sweaty Betty's global business. Wolverine remains confident in accomplishing a 12% operating margin in 2024.
The company is committed to new launches across different brand banners. In the first quarter of 2023, the Merrell brand continued its momentum, generating 18% revenue growth and 20% on a constant currency basis. Wolverine forecasts Merrell's revenues to increase by mid-single digits in 2023.
Saucony’s revenues also increased 21.2% to $132.6 million in the reported quarter. It predicts Saucony’s revenues to increase by high-single digits in 2023 with mid-single digits growth in the first half. Further, it predicts Sweaty Betty’s revenues to increase in the low single digits at constant currency in 2023.
On a concluding note, this current Zacks Rank #3 (Hold) company is likely to continue performing well given the aforesaid strengths.
RCL has a trailing four-quarter earnings surprise of 26.4%, on average. The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates increases of 48.7% and 162.9%, respectively, from the year-ago period’s reported levels.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank #2 (Buy), at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 17.1% and 18.4%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 9.9%, on average.
Ralph Lauren, a footwear and accessories dealer, has a Zacks Rank of 2 at present. RL has a trailing four-quarter earnings surprise of 17.4%, on average.
The Zacks Consensus Estimate for Ralph Lauren’s current financial-year sales and EPS suggests growth of 2.8% and 13.1%, respectively, from the year-ago corresponding figures.
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Wolverine (WWW) Rides High on Growth Strategies: Apt to Hold
Wolverine World Wide, Inc. (WWW - Free Report) appears encouraging on the back of its robust business strategies. The company is focused on developing brands that aptly suit consumer needs on the back of advanced technologies and accurate market insights. WWW is striving to develop an efficient sourcing structure and diversify its global business as well as strengthen its direct-to-consumer (DTC) channel.
Buoyed by such endeavors, shares of this designer of casual and active apparel have increased 19.6% in the year-to-date span, outperforming the industry’s 2.6% drop.
Analysts seem optimistic about the company. For 2024, the Zacks Consensus Estimate for sales and earnings per share (EPS) is pegged at $2.61 billion and $2.26, respectively. These estimates show corresponding year-over-year growth of 2.3% and 51.1%. Also, the consensus estimate for the current year’s EPS is currently pegged at $1.49, reflecting a year-over-year increase of 5.7%.
Let’s Delve Deep
Wolverine’s multichannel strategy is progressing well. Management had initiated a 100-day action plan, including a focus on inventory reduction, debt management, Keds sale and the creation of a profit improvement office to grab savings to drive growth. The profit improvement office is on track to generate $65 million of cost savings this year. Management expects $150 million of annual savings from the profit improvement office in 2024.
Image Source: Zacks Investment Research
The international business remains one of the company’s key drivers. WWW’s international business was robust in the first quarter and improved 12.6% to $249.7 million. International revenues increased 18% in constant currency. The company’s brands resonated well across global markets and management sees major opportunities in both owned and JV-operated markets. Merrell and Saucony were the major drivers across regions, generating 29% growth and 37% growth, respectively. Saucony's China JV delivered a sturdy quarter as sales increased more than 100%, reflecting strength in its multichannel strategy.
Additionally, the company focuses on the brand structure, increasing efficiency by removing costs, reviewing its portfolio strategically, improving working capital and lowering leverage. We note that the sale of Keds and the pending licensing of Hush Puppies transitions are well underway. It is also on track to divest the Wolverine leather business. The company looks forward to making further investments in Merrell and softening its lifestyle businesses as well as enhancing Sweaty Betty's global business. Wolverine remains confident in accomplishing a 12% operating margin in 2024.
The company is committed to new launches across different brand banners. In the first quarter of 2023, the Merrell brand continued its momentum, generating 18% revenue growth and 20% on a constant currency basis. Wolverine forecasts Merrell's revenues to increase by mid-single digits in 2023.
Saucony’s revenues also increased 21.2% to $132.6 million in the reported quarter. It predicts Saucony’s revenues to increase by high-single digits in 2023 with mid-single digits growth in the first half. Further, it predicts Sweaty Betty’s revenues to increase in the low single digits at constant currency in 2023.
On a concluding note, this current Zacks Rank #3 (Hold) company is likely to continue performing well given the aforesaid strengths.
Eye These Solid Picks
Some better-ranked companies are Royal Caribbean (RCL - Free Report) , lululemon athletica (LULU - Free Report) and Ralph Lauren (RL - Free Report) .
Royal Caribbean sports a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
RCL has a trailing four-quarter earnings surprise of 26.4%, on average. The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates increases of 48.7% and 162.9%, respectively, from the year-ago period’s reported levels.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank #2 (Buy), at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 17.1% and 18.4%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 9.9%, on average.
Ralph Lauren, a footwear and accessories dealer, has a Zacks Rank of 2 at present. RL has a trailing four-quarter earnings surprise of 17.4%, on average.
The Zacks Consensus Estimate for Ralph Lauren’s current financial-year sales and EPS suggests growth of 2.8% and 13.1%, respectively, from the year-ago corresponding figures.