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Wolverine (WWW) Appears Solid on E-commerce & Brand Strength

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Wolverine World Wide, Inc. (WWW - Free Report) appears strong on the back of its enhanced digital capabilities, a diversified global business model and brand strength. Among the company’s sales channels, e-commerce is its key growth driver. The company is consistently utilizing its digital capabilities to speed up information and product flow alongside strengthening its distribution centers to support growth in the digital arena. For 2021, management targets accomplishing $500 million in digital revenues. Additionally, the company is smoothly progressing on its Global Growth Agenda initiative.

Markedly, the Rockford, MI-based company’s shares have increased 15.6% in the past six months compared with its industry’s rise of 10.1%. Additionally, the Zacks Consensus Estimate for earnings currently stands at $2.09 for 2021 and $2.40 for 2022, which suggests growth of 1% and 0.8%, respectively, in the past 30 days.

Let’s Delve Deeper

Earlier this month, management said that the company’s performance improved in the second quarter of 2021 on strength in its largest brands and product innovation. It stated that it has been experiencing momentum and stronger-than-expected trends for sometime now across roughly all its brands with Merrell, Saucony and Sperry leading the way. Markedly, sturdy order book has been improving since the end of the March quarter with impressive gains in the company’s international business. As a result, management anticipates its June-quarter 2021 revenues to surpass the 2019 levels. We note that Wolverine generated revenues of $568.6 million during second-quarter 2019. The company also reaffirmed full-year revenue guidance.

For 2021, management expects revenues in the bracket of $2,240-$2,300 million, implying growth of 25-28% from last year’s reported levels. Moreover, adjusted earnings per share are anticipated in the band of $1.95-$2.10 for the year. Notably, the company delivered adjusted earnings per share of 93 cents and 95 cents at constant currency in 2020.

Now detailing the strategic initiatives further, we note that this presently Zacks Rank #3 (Hold) company leveraged higher digital marketing investments to boost traffic and digital content as well as deepened its focus on better merchandising to optimize conversion. Markedly, e-commerce business remained strong in the first quarter of 2021. The company’s owned e-commerce business was the key driver, up 83.6% on gains from the company’s global digital strategy. Also, its direct-to-consumer channels have been strong for a while now.

Brandwise, saucony.com registered growth of above 150% on compelling digital storytelling and product launches. Moreover, Merrell.com revenues increased approximately 135% and that of Sperry.com’s revenues jumped 40% year over year in the first quarter. Over the next few months, management is expected to integrate and launch various innovation and technologies including a Merrell mobile app.

Further, Wolverine focuses on developing brands that suit consumer needs aptly on the back of advanced technologies and accurate market insights. Going forward, management is also committed toward product innovations and introductions across Saucony and Merrell brands.

Solid Picks in the Same Sector

Crocs (CROX - Free Report) has a long-term earnings growth rate of 15% and a Zacks Rank #1 (Strong Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

GIII-Apparel Group (GIII - Free Report) , also presently a Zacks #1 Ranked stock, has a long-term earnings growth rate of 11.6%.

Columbia Sportswear (COLM - Free Report) has a long-term earnings growth rate of 32% and a Zacks Rank #2 (Buy) at present.

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