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On Jul 10, 2013, Zacks Investment Research upgraded Wolverine World Wide Inc. (WWW - Snapshot Report) 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 - Snapshot Report), which carries a Zacks Rank #1 (Strong Buy). Big 5 Sporting Goods Corp. (BGFV - Analyst Report) and Deckers Outdoor Corporation (DECK - Analyst Report), both carrying a Zacks Rank #2 (Buy) are also worth considering.

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