Wolverine World Wide (WWW) AI Stock Analysis

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Wolverine World Wide

(NYSE:WWW)

59Neutral

Wolverine World Wide is on a path to recovery, with improved financial performance and optimistic guidance for 2025. However, the stock faces challenges from bearish technical indicators and a relatively high P/E ratio, which suggest caution. The company's strategic efforts and expected growth provide some optimism, but risks remain due to leverage and weaker segments.

Positive Factors

CEO Leadership

The business transformation under the leadership of the new CEO is seen as impressive, with a strategy moving from stabilization to growth phases.

Earnings Potential

Earnings growth potential is compelling as high margin revenue inflects on the streamlined expense base and interest expense moderates with lower debt balances.

Sales Growth

Teen oriented retailers, fashion athletic specialty retailers, and large independent retailers are realizing a significant step up in YoY sales growth across Men's, women's and kid's footwear.

Negative Factors

Distribution Strategy

Merrell's allocation and distribution strategy still leaves much to be desired.

Revenue Guidance

FY25 revenue guidance was disappointing; The high end of revenue guidance was 1.8% below consensus estimates.

Tariff Concerns

The likelihood that tariffs will be raised on all foreign manufactured goods has increased.

Wolverine World Wide (WWW) vs. S&P 500 (SPY)

Market Cap

$999.16M

Dividend Yield3.97%

Average Volume (3M)1.59M

Price to Earnings (P/E)21.3

Beta (1Y)1.63

Revenue Growth-21.75%

EPS GrowthN/A

CountryUS

Employees3,100

SectorConsumer Cyclical

Sector Strength55

IndustryApparel - Footwear & Accessories

Share Statistics

EPS (TTM)0.57

Shares Outstanding81,034,800

10 Day Avg. Volume1,826,529

30 Day Avg. Volume1,591,894

Financial Highlights & Ratios

PEG Ratio0.35

Price to Book (P/B)N/A

Price to Sales (P/S)0.63

Price to Cash Flow (P/CF)3.40

P/FCF Ratio3.40

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$22.50

Price Target Upside82.48% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering7

Wolverine World Wide Business Overview & Revenue Model

Company DescriptionWolverine World Wide, Inc. is a global footwear and apparel company headquartered in Rockford, Michigan. The company specializes in designing, manufacturing, and marketing a wide range of footwear, apparel, and accessories. Its portfolio includes well-known brands such as Merrell, Saucony, Sperry, Hush Puppies, and Wolverine, catering to various consumer needs and preferences. Wolverine World Wide operates in both wholesale and direct-to-consumer sectors, distributing its products through department stores, specialty retailers, and its own branded retail stores and e-commerce platforms.

How the Company Makes MoneyWolverine World Wide generates revenue primarily through the sale of its branded footwear, apparel, and accessories. The company's revenue streams include wholesale distribution to retailers and distributors globally, direct-to-consumer sales through its branded retail stores and e-commerce websites, and licensing agreements for certain brands. Key partnerships with retailers and distributors worldwide help expand its market reach, while its diversified brand portfolio caters to a broad consumer base. Additionally, Wolverine World Wide benefits from strategic acquisitions and brand management, enhancing its ability to capture market share and drive growth in the competitive footwear and apparel industry.

Wolverine World Wide Financial Statement Overview

Summary

Wolverine World Wide is showing signs of recovery with improved profitability and cash flow in 2024. Despite a revenue decline, effective cost management and debt reduction have bolstered financial stability. However, challenges persist with high leverage.

Income Statement

Positive

Wolverine World Wide has shown a significant decline in its revenue over the recent years, from $2.68 billion in 2022 to $1.75 billion in 2024. The gross profit margin for 2024 stands healthy at 44.5%, reflecting good cost management despite declining revenues. However, the net profit margin of 2.7% indicates slim profitability. The company has managed to return to positive EBIT and EBITDA in 2024, indicating operational improvements.

Balance Sheet

Neutral

The company's debt-to-equity ratio improved significantly from 3.91 in 2023 to 0.52 in 2024 due to debt reduction and increased equity. This indicates a better financial structure. However, the equity ratio remains low at 18.4%, suggesting high leverage. The return on equity (ROE) has improved to 15.6% in 2024, showing better returns for shareholders.

Cash Flow

Positive

Wolverine World Wide has shown strong cash flow management, with positive free cash flow growth from $107 million in 2023 to $159.9 million in 2024. The operating cash flow to net income ratio is robust at 3.76, indicating efficient cash generation relative to net income. Despite past negative trends, the recent year shows promising cash flow improvements.

Dec 2024	Dec 2023	Dec 2022	Mar 2022	Mar 2021
Breakdown
Income Statement		Total Revenue
1.75B	2.24B	2.68B	2.41B	1.79B
	Gross Profit
781.50M	872.50M	1.07B	1.03B	735.60M
	EBIT
101.00M	-68.20M	133.10M	155.70M	87.20M
	EBITDA
130.50M	-46.20M	-137.30M	207.30M	-96.60M
	Net Income Common Stockholders
47.90M	-39.60M	-189.10M	68.60M	-138.60M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
152.10M	179.00M	131.50M	161.70M	347.40M
	Total Assets
1.67B	2.06B	2.49B	2.59B	2.14B
	Total Debt
159.70M	1.09B	1.35B	1.12B	886.80M
	Net Debt
7.60M	908.90M	1.22B	961.60M	539.40M
	Total Liabilities
1.35B	1.76B	2.15B	1.94B	1.56B
	Stockholders Equity
307.30M	278.60M	339.00M	644.40M	573.00M
Cash Flow		Free Cash Flow
159.90M	107.20M	-215.40M	69.20M	298.80M
	Operating Cash Flow
180.10M	121.80M	-178.90M	86.80M	309.10M
	Investing Cash Flow
86.80M	171.60M	54.60M	-437.30M	6.10M
	Financing Cash Flow
-299.20M	-246.30M	107.10M	169.30M	-154.00M

Wolverine World Wide Technical Analysis

Technical Analysis Sentiment

Negative

Last Price12.33

Price Trends

50DMA

15.75

Negative

100DMA

19.18

Negative

200DMA

16.89

Negative

Market Momentum

MACD

-0.71

Negative

RSI

41.24

Neutral

STOCH

38.26

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WWW, the sentiment is Negative. The current price of 12.33 is below the 20-day moving average (MA) of 13.21, below the 50-day MA of 15.75, and below the 200-day MA of 16.89, indicating a bearish trend. The MACD of -0.71 indicates Negative momentum. The RSI at 41.24 is Neutral, neither overbought nor oversold. The STOCH value of 38.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WWW.

Wolverine World Wide Risk Analysis

Wolverine World Wide disclosed 34 risk factors in its most recent earnings report. Wolverine World Wide reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Wolverine World Wide Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CROX	76 Outperform	$5.37B	5.59	57.76%	―	3.53%	24.55%
SHOO	74 Outperform	$1.61B	9.41	20.20%	4.19%	15.03%	1.51%
CAL	72 Outperform	$573.76M	5.53	17.83%	1.90%	-3.36%	-35.98%
RCKY	64 Neutral	$109.77M	9.66	5.00%	4.62%	-1.75%	8.28%
WEYS	64 Neutral	$299.09M	9.82	12.37%	3.77%	-8.73%	0.31%
WWW	59 Neutral	$999.16M	21.30	15.57%	3.97%	-21.75%	―
Sector *	59 Neutral	$11.74B	10.16	-1.06%	4.15%	1.27%	-16.61%

* Consumer Cyclical Sector Average

Performance Comparison

WWW

Wolverine World Wide

12.33

3.07

33.15%

CROX

Crocs

99.59

-29.82

-23.04%

RCKY

Rocky Brands

14.68

-11.66

-44.27%

SHOO

Steven Madden

22.14

-16.24

-42.31%

WEYS

Weyco Group

31.03

3.57

13.00%

CAL

Caleres

17.07

-18.68

-52.25%

Wolverine World Wide Earnings Call Summary

Earnings Call Date: Feb 19, 2025 | % Change Since: -33.71% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Positive

The earnings call reflected a strong financial recovery in Q4 and 2024, with significant improvements in gross margin and debt reduction. Strong performances from Saucony and Merrell were noted, although challenges in direct-to-consumer sales and Sweaty Betty's performance were highlighted. The company remains optimistic about 2025 with strategic investments planned to sustain growth.

Highlights

Strong Fourth Quarter and Full-Year Performance

Wolverine Worldwide posted revenue of $495 million in Q4, exceeding expectations, with a 3% increase year-over-year. Full-year diluted earnings per share increased to $0.91 from $0.15 in 2023.

Gross Margin Expansion

Gross margin expanded by more than 600 basis points in Q4, achieving a new fourth quarter record. Full-year 2024 adjusted gross margin was 44.6%, a 470 basis point increase from the previous year.

Debt Reduction and Inventory Management

The company finished with its lowest debt level since Q2 2021, reducing net debt by 33% to $496 million. Inventory was down approximately 36% from the previous year.

Saucony and Merrell Brand Growth

Saucony grew 7% in Q4, with a gross margin expansion of over 1400 basis points, and Merrell posted a second consecutive quarter of growth with a 400 basis point improvement in gross margin.

2025 Outlook and Strategic Investments

For 2025, revenue is expected to grow 2.5% to 4.3%, with continued investments in brand-building, particularly for Saucony, and enhancements in product innovation and marketing.

Lowlights

Decline in Direct-to-Consumer Sales

Q4 saw a decline in direct-to-consumer business as the company focused on more full-price sales, resulting in lower promotional activity.

Sweaty Betty's Softer Performance

Sweaty Betty's top line was softer than expected, with a 6% decline in Q4 due to a challenging UK trading environment.

Overall Revenue Decline in 2024

Fiscal 2024 revenue of $1.75 billion represented a decline of 12.1% from the prior year, primarily due to inventory liquidation and business model changes in 2023.

Company Guidance

During the Wolverine Worldwide Fourth Quarter Fiscal 2024 Earnings Call, the company provided guidance for fiscal year 2025, emphasizing a return to growth and improved profitability. They expect revenue to be in the range of $1.795 billion to $1.825 billion, reflecting an increase of 2.5% to 4.3% compared to the previous year. This includes a $40 million currency headwind, with constant currency growth projected at 4.2% to 5.9%. The company anticipates an adjusted gross margin of approximately 45.5%, up 90 basis points from last year, and an adjusted operating margin of around 8.3%, improved from 7.5% in 2024. Wolverine Worldwide projects adjusted diluted earnings per share to be between $1.05 and $1.20, representing a 25% to 41% growth on a constant currency basis. Operating free cash flow is expected to range from $70 million to $80 million, with capital expenditures around $40 million. The first quarter of 2025 is expected to see revenue of $395 million, with an adjusted operating margin of approximately 4.6%.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.