Piper Jaffray Remains Neutral as Wolverine World Wide's (WWW) 3Q Results Brings Muted Visibility
Piper Jaffray reiterated a Neutral rating and $19.00 price target on Wolverine World Wide (NYSE: WWW) as muted visibility follow the company's 3Q15 earnings results. Sales guidance was cut significantly for Q4, and management is assuming roughly one-third of its sales to be re-orders against overall lower demand. For Q4, management expects reported revenue in a $750-770M range (or down 7%-5%) which was below the $817M Street estimate. Q4 EPS is projected in the $0.31-0.34 range.
Analyst Erinn Murphy commented, "We are reiterating our Neutral rating and are refining our model for Q4 and beyond. Sales guidance was cut significantly for Q4 and we note that management is assuming roughly one-third of its sales to be re-orders against overall lower demand. Management is anticipating the environment to remain promotional and could see markdown dollars elevated to accommodate retailer needs. We note that inventory exiting Q3 was up 6% and management noted it could be up HSD ending the year. With the level of global uncertainty, the pressure FX is placing on their business coupled with the lackluster trends domestically, we remain Neutral on shares of WWW. Our FY16 EPS estimate of $1.44 is below the Street's $1.62."
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Shares of Wolverine World Wide closed at $20.25 yesterday.