Sometimes it seems as though a company is somehow unworthy if it's not growing 20% a year. The fact is, as far as I'm concerned, growth at that clip is often more trouble than it's worth. It attracts go-go investors who push your stock up to unreasonable valuations and abandon it in a huff at the first sign of trouble. It's difficult to manage internally and it tends to attract competition.
With that in mind, I don't see anything really wrong with Wolverine Worldwide
For the third quarter, revenue rose 7% and operating earnings climbed about 11%. Earnings were helped by improvements in the gross and operating margins, while revenue performance was mixed across the brands. The Hush Puppies, Heritage, and Outdoor units were all positive, while the Wolverine business saw a slight decline in sales.
It appears that management is also continuing to build for future growth. It is expanding its relationship with Federated Department Stores
In the meantime, the blocking and tackling aspects of the company seem to be in line, as well. Debt remains low, inventories are under control vis-a-vis revenue growth (and most of that inventory growth is in the successful outdoor products), and accounts receivable seem reasonable as well. Top that off with increased guidance, a solid backlog, and positive cash flow generation, and you've got a nice growth story.
No doubt that footwear is a tough business. Wolverine is certainly smaller than Nike
Take a walk on the wild side:
Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).