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Wolverine Worldwide (WWW) Stock Trades Up, Here Is Why

WWW Cover Image

What Happened?

Shares of footwear conglomerate Wolverine Worldwide (NYSE: WWW) jumped 11.7% in the afternoon session after the company posted strong second-quarter financial results that surpassed Wall Street's expectations. The footwear company reported that its revenue climbed 11.5% to $474.2 million, beating analysts' forecasts. This growth was driven by its Active Group, where the Saucony brand's sales surged an impressive 41.5%. Profitability also saw a major boost, with earnings per share landing at $0.35, easily topping the consensus estimate of $0.24 and more than doubling the figure from the same quarter last year. The company attributed the improved gross margin to a better sales mix, less promotional activity, and benefits from supply chain cost initiatives. Additionally, Wolverine strengthened its balance sheet, cutting its net debt by nearly 15% compared to the prior year.

Is now the time to buy Wolverine Worldwide? Access our full analysis report here, it’s free.

What Is The Market Telling Us

Wolverine Worldwide’s shares are very volatile and have had 25 moves greater than 5% over the last year. But moves this big are rare even for Wolverine Worldwide and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 2 days ago when the stock gained 5.6% on the news that markets rebounded following a sharp sell-off in the previous trading session as weaker-than-expected U.S. jobs data fueled investor hopes for a potential interest rate cut by the Federal Reserve. The July Nonfarm Payrolls report revealed a gain of only 73,000 jobs, significantly below the 110,000 expected. Compounding the news, prior months' figures were revised downward by over 250,000 jobs. This data, indicating a cooling labor market, has led investors to dramatically increase bets on a September interest rate cut by the Federal Reserve, with the probability jumping to over 80% according to the CME FedWatch Tool. The prospect of lower borrowing costs typically stimulates economic activity and boosts consumer spending on non-essential goods and services, which directly benefits companies in the consumer discretionary space.

Wolverine Worldwide is up 18.6% since the beginning of the year, and at $26.81 per share, has set a new 52-week high. Investors who bought $1,000 worth of Wolverine Worldwide’s shares 5 years ago would now be looking at an investment worth $1,159.

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