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Wolverine World Wide Inc. (WWW - Snapshot Report), a leading designer, manufacturer and marketer of branded footwear and apparel, is scheduled to report its second-quarter 2012 financial results on Tuesday, July 10, 2012.

The current Zacks Consensus Estimate for the quarter stands at 44 cents per share, indicating an estimated decrease of 8.3% from the prior-year quarter. Revenue, as per the Zacks Consensus Estimate, is $314 million.

First-Quarter 2011, a Synopsis

On April 23, 2012, Wolverine posted soft first-quarter 2012 results. Lower sales and a decline in margins took a toll on the company’s earnings as Wolverine reported quarterly earnings of 64 cents a share, down 11.1% from the prior-year quarter's earnings of 72 cents. However, the reported earnings exceeded the Zacks Consensus Estimate of 54 cents.

Wolverine marked a 2.4% decrease in its top line to $322.8 million. The reported revenue was also below the Zacks Consensus Estimate of $334 million.

Guidance

Management remains optimistic for the coming quarters and raised its earnings guidance for the current fiscal year. Wolverine now expects 2012 earnings between $2.70 and $2.80 a share, representing growth of 8.9% to 12.9% from the prior year.

Moreover, Wolverine revised its sales guidance and expects total revenue in the range of $1.46 billion to $1.50 billion for fiscal 2012, reflecting year-over-year growth of 3.6% to 6.5%.

For the second quarter of 2012, the company expects revenues to remain flat or increase in low single digits, while gross margin is forecasted to be slightly down or remain flat. Earnings are expected to be in the range of 40 cents to 45 cents per share.

Agreement of Estimate Revisions

For the to-be-reported quarter, 2 out of 10 estimates have been revised downwards over the past 7 and 30 days respectively, while none were raised. Moreover, for fiscal 2012, the story remains more or less the same with 1 estimate (out of 10) being revised downwards, with none moving in the opposite direction.  

Magnitude of Estimate Revisions

There was no movement in the Zacks Consensus Estimate for the second quarter of 2012, either in the last 7 or 30 days; analysts covering the stock have kept their estimates intact in the absence of any major news having a direct or an indirect impact on the estimates. 

Surprise History

With respect to earnings surprises, Wolverine has either topped or met the Zacks Consensus Estimate over the last four quarters with an average earnings surprise of 9.1%.

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. , Deckers Outdoor Corporation (DECK - Analyst Report) and Skechers USA Inc. (SKX - Analyst Report), we prefer to have a long-term Neutral recommendation on the stock. Moreover, Wolverine holds Zacks #3 Rank that translates into a short-term Hold rating.

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