Wolverine World Wide Inc. (WWW), one of the leading designers, manufacturers and marketers of branded footwear and apparel, is set to employ its free cash to boost shareholders’ return, thus enhancing investor confidence on the stock.
The company raised its quarterly dividend by approximately 9.1% to 12 cents from 11 cents per share. The increased dividend will be paid on May 2, 2011 to shareholders of record as of April 01, 2011, marking the company’s first dividend enhancement from 2008.
Dividend increase reflects the company’s sturdy financial position and well-defined future prospects. Further, this strategy enhances shareholders’ return and lifts the market value of the stock.
The company’s continuous focus on inventory management, cost control and merchandise inventiveness kept it afloat in a droopy retail environment. Further, the company’s multi-brand portfolio, geographical diversification, and multi-distribution channel strategy remain its key growth drivers.
Prior to it, the company announced healthy fourth-quarter earnings of 52 cents a share, outpacing the Zacks Consensus Estimate of 46 cents and grew 15.6% from 45 cents in the prior-year quarter.
Wolverine, the seller of products under Harley-Davidson Footwear, Hush Puppies, Merrell and other brands, stated its total revenue for the quarter climbed 23.2% to $385 million from the prior-year quarter, handily beating the Zacks Consensus Estimate of $356 million.
By operating groups, year-over-year revenue increased 22.3% to $134.9 million at Outdoor Group, 27.6% to $97.9 million at Wolverine Footwear Group, 25.8% to $65.1 million at Heritage Brands Group and 16.4% to $38.9 million at Hush Puppies Group. Other business units, which comprise Wolverine retail and leathers, posted a revenue growth of 17.9% to reach $44.1 million.
Gross profit for the quarter jumped 16.3% to $142.7 million, whereas gross margin contracted 220 basis points to 37.1%, reflecting a rise in product costs.
Based in Rockford, Michigan, Wolverine enjoyed increased momentum in fiscal 2010, which is expected to continue till fiscal 2011. Moreover, we believe that the company remains well positioned to increase its market share on the strength of its brand portfolio. The Merrell brand has been the key growth driver for the past decade, and we expect it to catalyze future growth.
Wolverine, which competes with Deckers Outdoor Corporation (DECK) and Skechers USA Inc. (SKX), holds a Zacks #3 Rank, which translates into a short-term ‘Hold’ recommendation
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