Back to top

Wolverine's Growth Global Agenda Strong, Sales Trend Weak

Read MoreHide Full Article

Wolverine World Wide, Inc. (WWW - Free Report) ison track with its Way Forward initiative, as it entered into the next phase — Global Growth Agenda. Additionally, an impressive earnings history, strong product portfolio and expansion plans bode well.

Despite such upsides, the company is grappling with declining sales trend along with currency headwinds. Notably, shares of the company slumped 11.6% in the past three months, significantly underperforming the industry’s decline of 3.3%. Also, this Zacks Rank #3 (Hold) stock has lagged the broader Shoes and Retail Apparel sector's loss of 3.6% in the said time period. Let’s delve deeper.


What’s Hurting the Stock?

Wolverine’s top-line has been registering a year-over-year decline for the last five quarters. Top line declined 3.9% to $558.6 million and also fell short of the Zacks Consensus Estimate of $581.5 million.

The company witnessed sales decline in all the three segments. Sales at Wolverine Outdoor & Lifestyle Group, Wolverine Boston Group and Wolverine Heritage Group decreased 0.7%, 4% and 5.7%, respectively. Sales at the company’s Boston Group and Heritage Group have declined in all the three quarters of 2018. Moreover, the company is exposed to significant currency risks.

Efforts to Revive on Track

Wolverine is progressing well with its Way Forward initiative, which is likely to drive growth.Further, the company entered into the next phase of its Way Forward initiative — Global Growth Agenda — which focuses on empowering brands, implementing advanced digital tools and expanding into new markets. Wolverine anticipates additional investments in this direction to be $40-$45 million for 2018. Out of this, 45% of such investments are directed toward the creation of powerful product development.

Also, the company remained focused on enhancing its digital capabilities. Efforts in this respect include enhancing the company’s social presence, improving digital advertisement maneuvers, and better implementation and management of consumer database. Further, the company has allocated approximately $15 million of incremental investments from Global Growth Agenda toward digital advancements. Moreover, it is witnessing solid e-commerce growth with 25% improvement in this business during the third quarter.

Moving on, Wolverine is making efforts to expand base. Going ahead, the company plans to add greater strategic resources to strengthen its regional teams, especially in the emerging regions of Asia-Pacific such as China. With such well-spun plans rolled up its sleeves, the company plans to achieve high-single digit growth in revenues from its international business in 2018.

3 More Retails Stocks to Bank Upon

Deckers Outdoor Corp. (DECK - Free Report) has long-term earnings growth rate of 11.3% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Xtep International Holdings Ltd. (XTEPY - Free Report) has long-term earnings growth rate of 11% and a Zacks Rank #1.

Skechers U.S.A., Inc. (SKX - Free Report) has long-term earnings growth rate of 7% and a Zacks Rank #2 (Buy).

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>

More from Zacks Analyst Blog

You May Like