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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) is performing well on the bourses, thanks to its robust business strategies. The company has been strengthening its direct-to-consumer (DTC) business and its footprint across international markets. WWW also focuses on developing brands that aptly suit consumer needs on the back of advanced technologies and accurate market insights.
Shares of this apparel and footwear dealer have increased 17.6% in the past three months against the industry’s 1.1% dip.
Let’s Delve Deep
The company’s multichannel strategy is progressing well, with the addition of eight stores in the fourth quarter of 2022. Management projects revenues from the China JV to double in 2023. It predicts Saucony’s revenues to increase mid-single digits in 2023 with high-single digits growth in the first quarter. Further, it predicts Sweaty Betty’s revenues to increase in the low single digits in 2023. With respect to Sweaty Betty, it introduced one pop-up in China and intends to open 10 stores in 2023 mainly in the U.K. and Ireland.
Image Source: Zacks Investment Research
The international business remains one of the key revenue drivers. WWW’s international business was robust in the fourth quarter and improved 22.2% to $281.5 million. International revenues increased 31.9% in constant currency. We note that the company’s EMEA business is a major contributor to international growth, with a revenue increase of 21%. The top three brands further boosted the performance, representing more than 50% of international revenues. Wolverine plans to invest in key growth markets and continues to invest in the international regions, with joint ventures for Merrell and Saucony. The company also expands its e-commerce capabilities globally.
Wolverine has been striving to develop an efficient sourcing structure and diversify its global business. It remains committed to new launches across different brand banners and has been strengthening its brands. In the fourth quarter of 2022, the Merrell brand continued its momentum, generating 27% revenue growth and 31% on a constant currency basis and benefiting from global brand strength across categories.
Merrell’s DTC business increased 16% in the quarter, accounting for more than 40% of the brand’s sales in the United States. Wolverine forecasts Merrell's revenues to increase in the mid-single digits in 2023 with a high-teens rise in the first quarter.
Saucony’s revenues also increased 24.8% to $121.3 million in the reported quarter. The updated core franchises aided Saucony’s performance and its e-commerce revenues grew 31%. This brand will continue to drive innovation and Saucony's China JV had an outstanding quarter, as sales tripled in 2022.
For 2024, the Zacks Consensus Estimate for sales and earnings per share (EPS) is pegged at $2.62 billion and $2.22, respectively. These estimates show corresponding year-over-year growth of 2% and 44.8%. Also, the consensus estimate for the current year’s EPS is pegged at $1.53, reflecting a year-over-year increase of 8.5%. This reflects analysts’ optimism. A VGM Score of B for this current Zacks Rank #3 (Hold) stock speaks volumes.
RL has a trailing four-quarter earnings surprise of 23.6%, on average. The Zacks Consensus Estimate for Ralph Lauren’s current financial-year sales and EPS suggests growth of 5.5% and 14%, respectively, from the year-ago corresponding figures.
Oxford Industries, which designs, sources, markets and distributes lifestyle products and other brands, currently carries a Zacks Rank #2 (Buy). Oxford Industries has a trailing four-quarter earnings surprise of 14.7%, on average.
The Zacks Consensus Estimate for OXM’s current financial-year sales and EPS suggests growth of 5.8% and 7.6% from the year-ago reported numbers.
Deckers, a footwear dealer, has a Zacks Rank of 2 at present. DECK has a trailing four-quarter earnings surprise of 31%, on average.
The Zacks Consensus Estimate for Deckers’ current financial-year sales and EPS suggests growth of 11.1% and 17.2%, 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) is performing well on the bourses, thanks to its robust business strategies. The company has been strengthening its direct-to-consumer (DTC) business and its footprint across international markets. WWW also focuses on developing brands that aptly suit consumer needs on the back of advanced technologies and accurate market insights.
Shares of this apparel and footwear dealer have increased 17.6% in the past three months against the industry’s 1.1% dip.
Let’s Delve Deep
The company’s multichannel strategy is progressing well, with the addition of eight stores in the fourth quarter of 2022. Management projects revenues from the China JV to double in 2023. It predicts Saucony’s revenues to increase mid-single digits in 2023 with high-single digits growth in the first quarter. Further, it predicts Sweaty Betty’s revenues to increase in the low single digits in 2023. With respect to Sweaty Betty, it introduced one pop-up in China and intends to open 10 stores in 2023 mainly in the U.K. and Ireland.
Image Source: Zacks Investment Research
The international business remains one of the key revenue drivers. WWW’s international business was robust in the fourth quarter and improved 22.2% to $281.5 million. International revenues increased 31.9% in constant currency. We note that the company’s EMEA business is a major contributor to international growth, with a revenue increase of 21%. The top three brands further boosted the performance, representing more than 50% of international revenues. Wolverine plans to invest in key growth markets and continues to invest in the international regions, with joint ventures for Merrell and Saucony. The company also expands its e-commerce capabilities globally.
Wolverine has been striving to develop an efficient sourcing structure and diversify its global business. It remains committed to new launches across different brand banners and has been strengthening its brands. In the fourth quarter of 2022, the Merrell brand continued its momentum, generating 27% revenue growth and 31% on a constant currency basis and benefiting from global brand strength across categories.
Merrell’s DTC business increased 16% in the quarter, accounting for more than 40% of the brand’s sales in the United States. Wolverine forecasts Merrell's revenues to increase in the mid-single digits in 2023 with a high-teens rise in the first quarter.
Saucony’s revenues also increased 24.8% to $121.3 million in the reported quarter. The updated core franchises aided Saucony’s performance and its e-commerce revenues grew 31%. This brand will continue to drive innovation and Saucony's China JV had an outstanding quarter, as sales tripled in 2022.
For 2024, the Zacks Consensus Estimate for sales and earnings per share (EPS) is pegged at $2.62 billion and $2.22, respectively. These estimates show corresponding year-over-year growth of 2% and 44.8%. Also, the consensus estimate for the current year’s EPS is pegged at $1.53, reflecting a year-over-year increase of 8.5%. This reflects analysts’ optimism. A VGM Score of B for this current Zacks Rank #3 (Hold) stock speaks volumes.
Eye These Solid Picks
Here we have highlighted three top-ranked stocks, namely, Ralph Lauren (RL - Free Report) , Oxford Industries (OXM - Free Report) and Deckers (DECK - Free Report) .
Ralph Lauren, a footwear and accessories dealer, sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
RL has a trailing four-quarter earnings surprise of 23.6%, on average. The Zacks Consensus Estimate for Ralph Lauren’s current financial-year sales and EPS suggests growth of 5.5% and 14%, respectively, from the year-ago corresponding figures.
Oxford Industries, which designs, sources, markets and distributes lifestyle products and other brands, currently carries a Zacks Rank #2 (Buy). Oxford Industries has a trailing four-quarter earnings surprise of 14.7%, on average.
The Zacks Consensus Estimate for OXM’s current financial-year sales and EPS suggests growth of 5.8% and 7.6% from the year-ago reported numbers.
Deckers, a footwear dealer, has a Zacks Rank of 2 at present. DECK has a trailing four-quarter earnings surprise of 31%, on average.
The Zacks Consensus Estimate for Deckers’ current financial-year sales and EPS suggests growth of 11.1% and 17.2%, respectively, from the year-ago corresponding figures.