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Wolverine (WWW) to Post Q4 Earnings: What's in the Offing?

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Wolverine World Wide, Inc. (WWW - Free Report) is scheduled to report fourth-quarter 2019 numbers on Feb 25, before the opening bell. Notably, the company has trailing four-quarter positive earnings surprise of 5.6%, on average. If all goes well, the quarter will mark the eighth straight quarter of earnings beat for the company.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 59 cents, which suggests growth of 13.5% from 52 cents earned in the year-ago quarter. Moreover, the consensus mark for quarterly revenues is at $613.4 million, which indicates 5.9% rise from the year-ago quarter’s tally.

Wolverine World Wide, Inc. Price and EPS Surprise

 

Wolverine World Wide, Inc. Price and EPS Surprise

Wolverine World Wide, Inc. price-eps-surprise | Wolverine World Wide, Inc. Quote

 

Key Factors

Wolverine has been gaining from its e-commerce and wholesale channels. The company has been utilizing its digital capabilities to boost social presence and enhance speed of information as well as better manage consumer database and product flow. In order to support growth in the digital arena, it is investing toward strengthening of distribution centers. Its efforts to develop brands that suit consumers’ needs more aptly on the back of advanced technologies and accurate market insights bode well.

Wolverine’s Global Growth Agenda, aimed at three major elements — continued introduction of products worldwide with creative designs, expansion of digital engagement to enhance the owned e-commerce business as well as stronger investments in regional resources and systems to drive international growth — look good. Such well-chalked endeavors are likely to have had a positive impact on the top line in the to-be-reported quarter. Encouragingly, the current Zacks Consensus Estimate of $353 million for the Wolverine Michigan Group and $246 million for the Wolverine Boston Group, call for sequential growth of 10.7% and 2.1%, respectively.

In the last earnings call, management guided fourth-quarter adjusted operating margin of 11.5%, which indicates 80 basis points (bps) increase from the prior-year quarter’s level. The company had projected adjusted earnings per share of 59 cents, which reflects a 3-cent impact from new tariff costs and a 5-cent timing shift between the third quarter and the fourth quarter. However, management had guided fourth-quarter gross margin of 39.5%, which represents nearly 50 bps adverse tariff costs. Also, headwinds related to foreign currency fluctuations and stiff competition in the industry persist.

What Our Zacks Model Says

Our proven model does not conclusively predict an earnings beat for Wolverine this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filterr.

Wolverine carries a Zacks Rank #3 and Earnings ESP of 0.00%.

Stocks With Favorable Combination

Here are a few companies you may want to consider, as our model shows that these have the right combination to post an earnings beat:

G-III Apparel Group (GIII - Free Report) has an Earnings ESP of +5.62% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Costco (COST - Free Report) has an Earnings ESP of +0.56% and a Zacks Rank #2.

Burlington Stores (BURL - Free Report) has an Earnings ESP of +0.36% and a Zacks Rank #2.

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