Back to top

Analyst Blog

Wolverine World Wide Inc. (WWW - Snapshot Report), one of the leading designers, manufacturers and marketers of branded footwear and apparel, priced its $375 million worth of senior notes at 6.125%. Earlier this week, the company stated that the debt offering will carry a guarantee of its certain domestic subsidiaries, and is scheduled to mature in 2020.

Wolverine stated that the net proceeds from the sale of debt would be around $367 million after meeting the expenses and initial purchasers' discounts and will only be offered to the qualified institutional buyers.

The company also stated that the proceeds from the offering will be used to fund its acquisition of the Performance + Lifestyle Group business (the "PLG Business") of Collective Brands Inc . Apart from this, the company intends to repay loans under its credit facility with the amount.

Wolverine is focusing on enhancing its portfolio of brands, thus the company announced the acquisition of Collective Brands’ Performance + Lifestyle Group (PLG) unit. The PLG unit sells footwear and related products, both wholesale and retail, for children and adults under popular brands which include Stride Rite, Sperry Top-Sider, Saucony, and Keds. 

We expect the acquisition to provide ample opportunities to Wolverine for boosting its growth prospects while facilitating the company to enhance its portfolio of brands.

Going forward, Wolverine expects revenues to be in the low-to-mid-single-digit range, while earnings are expected to remain flat year over year for the third quarter of 2012.  

Moreover, for fiscal 2012, the company expects total revenue in the range of $1.46 billion to $1.50 billion, reflecting a year-over-year growth of 3.6% to 6.4%.

Currently, we are maintaining a long-term ‘Neutral’ recommendation on the stock. However, Wolverine, which competes with Deckers Outdoor Corporation (DECK - Analyst Report) and Skechers USA Inc. (SKX - Analyst Report), has a Zacks #4 Rank that translates into a short-term ‘Sell’ rating as secular headwinds act as short-term deterrents for the stock.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%