Wolverine’s 52-week High is No Fad
Originally Published In the News April 16 2008 10:50 AM
Sensible buysiders got in early on the CROCS craze or passed on the stock entirely; the valuation against its peers began to look silly as early as eighteen months ago.
November 2006
But with nearly 50% of (CROX) float shorted, the stock has been a bloody battleground for months. Indeed, the stock now boasts a market capitalization and enterprise value on par with Wolverine World Wide, a longtime member in good standing of the footwear industry whose 2007 revenue should clock in approximately 3x that of CROCS. Margin differentials account for part of the valuation gap between the two stocks, but clearly the stock’s embed different growth rate assumptions, the secret sauce that makes growth stock investing more of an art than a science.
Wolverine World Wide might not offer up the excitement that CROCS does, but shareholders are probably not complaining as the stock prints new 52-week highs today:
Shoe company Wolverine World Wide Inc on Wednesday reported higher first-quarter profit and raised its full-year outlook as revenue rose on strong demand for its Merrell footwear.
Earnings increased to $23.7 million, or 46 cents a share, from $22.3 million, or 39 cents a share, a year earlier. That beat the analysts’ average forecast of 43 cents per share, according to Reuters Estimates.... During the quarter, revenue growth was strongest in the company’s Outdoor Group and international businesses, Chief Executive Blake Krueger said in a statement.
“In particular, our royalty-based global licensing and distribution businesses had a very strong quarter,” he said. “The Outdoor Group remained the company’s leading profit contributor during the quarter, led by the Merrell businesses in the U.S. and Europe.”
The company’s order backlog rose more than 10 percent, and inventories were down 4 percent.
One-Year WWW vs CROX
Sometimes, boring is beautiful.
Wolverine earnings rise on strong Merrell sales
Reuters
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