No Pause for Wolverine

If you crave steady growth, impressive brand recognition, and a solid management team, look no further than Wolverine World Wide (NYSE: WWW  ) . The world of outdoor gear suppliers includes plenty of competitors, including Timberland (NYSE: TBL  ) and Columbia Sportswear (Nasdaq: COLM  ) , but Wolverine continues to lead the trek north.

For the first quarter, Wolverine World Wide reported its earnings climbed 14.7% to $22.3 million, or $0.39 per share. Not only did those numbers best analysts' estimates of $0.37 per share, they also set a record. Its $281.1 million in revenue came in just under expectations, but was also a record for the company. Management pointed to higher sales in its outdoor footwear and heritage brands groups, as well as its Hush Puppies segment. (Is it just me, or does Hush Puppies seem a bit out of place here?)

A deeper look at the numbers reveals even more good news. Gross margins rose to record levels, selling and administrative expenses were down as a percentage of sales, and Wolverine repurchased more than 1.1 million shares of stock in the first quarter. Perhaps the only negative for the company was the 9.3% increase in its inventory levels. This would imply it's keeping too much merchandise on its shelves, yet its backlog increased more than 8%, meaning that shouldn't be the case for very long.

This company has a plethora of strong brands, including Hush Puppies, Harley-Davidson, Merrell, and Patagonia. It nudged up its estimates for the year by a penny, to a range of $1.57 to $1.63. That gives Wolverine a forward P/E between 18.5 and 19.2. The company is not cheap, but with its history of solid performance, you wouldn't expect it to be. Sometimes, you get what you pay for.

For more on how Wolverine reached this point, check out:

Columbia Sportswear is aMotley Fool Hidden Gems recommendation. For more small caps with form and function that can help you beat the market, sign up today for your free 30-day trial.

Fool contributor Mike Cianciolo welcomes feedback and doesn't own any of the companies in this article. The Fool has a disclosure policy.


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