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Wolverine's (WWW) Strategies on Track: Up 24.3% in 3 Months

Wolverine World Wide, Inc. WWW is performing well on the bourses, thanks to its robust business strategies. The company has been strengthening its direct-to-consumer (DTC) business. WWW also focuses on developing brands that suit consumer needs aptly on the back of advanced technologies and accurate market insights. It has been reinforcing its footprint across international markets. Apparently, shares of this apparel and footwear dealer have increased 24.3% in the past three months against the industry’s 5% dip.

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%. This reflects analysts’ optimism. A VGM Score of B for this current Zacks Rank #3 (Hold) stock speaks of its potential.

Let’s Delve Deep

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.

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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.

The company’s multichannel strategy is progressing well, with the addition of eight stores during the fourth quarter. 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 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.
 
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, and expands e-commerce capabilities globally.

Eye These Solid Picks

Here we have highlighted three top-ranked stocks, namely, Ralph Lauren RL, Oxford Industries OXM and Deckers DECK.

Ralph Lauren, a footwear and accessories dealer, sports a Zacks Rank #1 (Strong Buy) at present. RL has a trailing four-quarter earnings surprise of 23.6%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

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, 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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Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report

Ralph Lauren Corporation (RL) : Free Stock Analysis Report

Wolverine World Wide, Inc. (WWW) : Free Stock Analysis Report

Oxford Industries, Inc. (OXM) : Free Stock Analysis Report

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