May 25, 2022

StrategisChhr

Skillful Business Crafters

Wolverine (WWW) Queued Up for Q4 Earnings: What’s in Store?

This story originally appeared on Zacks

Wolverine World Wide, Inc. WWW is expected to report increases in its top and the bottom line from the respective year-ago quarter’s reported figures when it releases fourth-quarter 2021 results on Feb 23, before market open. The consensus estimate of $627.1 million for quarterly revenues suggests growth of 23.1% from the prior-year quarter’s tally.
The Zacks Consensus Estimate for the quarterly earnings has been stable in the past 30 days at 41 cents, indicating a significant improvement from 21 cents earned in the year-earlier quarter. In the trailing four quarters, this Rockford, MI-based player delivered an earnings surprise of 18.3%, on average.
For 2021, the Zacks Consensus Estimate for revenues is pegged at $2.41 billion, suggesting an increase of 34.4% from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for earnings has been stable in the past 30 days at $2.10 per share. The consensus mark indicates a sharp improvement from 93 cents earned last year.

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Key Factors to Note

Wolverine’s commitment toward product innovation and investments in own stores and digitization to directly reach customers are likely to have favorably impacted its fourth-quarter performance. Also, demand for its brands and robust direct-to-consumer sales might have contribute to results. The performance categories like hiking, running and work have been performing well for a while. WWW has also been leveraging higher digital marketing investments to boost traffic and is deepening its focus on better merchandising to optimize conversion.
On its last earnings call, management had anticipated adjusted earnings per share of 38-43 cents with the higher end of the range suggesting 100% growth from the 2020 reported level. Wolverine projected revenues of $2.40 billion for 2021. The latest revenue projection suggests growth of 35% from the number reported in 2020. The revenue outlook represents mid-single-digit growth (including Sweaty Betty) and low-single-digit growth (excluding Sweaty Betty) from the respective 2019 reported levels. Management envisioned adjusted earnings per share of $2.05-$2.10 for the year.
On the flip side, higher adjusted selling, general and administrative expenses are likely to have persisted in the fourth quarter. Also, steep air-freight and logistics costs due to COVID-related supply-chain constraints remain a headwind. Wolverine had earlier expected volatility to continue in the near term.

What Our Zacks Model Says

Our proven model doesn’t 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 Filter.
Although Wolverine currently has a Zacks Rank #2, its Earnings ESP of -0.41% leaves surprise prediction ]inconclusive.

Stocks With Favorable Combinations

Here are a few companies worth considering as our model shows that these have the right combination of elements to beat on earnings this season:
Gildan Activewear GIL currently has an Earnings ESP of +9.57% and a Zacks Rank of 2. GIL is anticipated to register a top-line increase when it reports fourth-quarter 2021 results. The Zacks Consensus Estimate for Gildan Activewear’s quarterly revenues is pegged at $731 million, indicating a rise of 5.9% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Gildan Activewear’s bottom line has been stable in the past 30 days at 58 cents per share. The consensus estimate for earnings suggests an improvement of 29% from the year-ago quarter’s reported figure. GIL delivered an earnings beat of 85%, on average, in the trailing four quarters.
Foot Locker FL currently has an Earnings ESP of +7.73% and a Zacks Rank #3. FL is likely to register a bottom-line decrease when it reports fourth-quarter fiscal 2021 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $1.46 suggests a fall of 5.8% from the year-ago quarter’s reported figure.
Foot Locker’s top line is expected to rise from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for quarterly revenues is pegged at $2,352 million, which indicates an improvement of 7.3% from the figure reported in the prior-year quarter. FL has a trailing four-quarter earnings surprise of 58.1%, on average.
Costco COST currently has an Earnings ESP of +1.27% and a Zacks Rank of 3. COST is likely to register an increase in the bottom line when it reports second-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $2.67 suggests an increase of 24.8% from the year-ago period’s reported number.
Costco’s top line is expected to increase from the year-earlier quarter’s reported number. The Zacks Consensus Estimate for quarterly revenues is pegged at $51.1 billion, which suggests growth of 14% from the prior-year quarter’s reported figure. COST has a trailing four-quarter earnings surprise of 8.3%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Costco Wholesale Corporation (COST): Free Stock Analysis Report
 
Foot Locker, Inc. (FL): Free Stock Analysis Report
 
Wolverine World Wide, Inc. (WWW): Free Stock Analysis Report
 
Gildan Activewear, Inc. (GIL): Free Stock Analysis Report
 
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