Shares of footwear firm Wolverine World Wide (NYSE:WWW) are flat-footed so far this year, but it has now increased earnings guidance twice since April. Plus, it just reported its 20th straight quarter of record sales and earnings. Sounds great, but lately the competition has been performing even better.

Wolverine's second-quarter sales came in a bit light of expectations, but strong inventory management and tight expense controls contributed to an earnings improvement of 12%. Better yet, the company's "innovative product offerings remain in demand and are being embraced by the global consumer," as well as brands like Merrell, Hush Puppies, and the Heritage Brands Group, which licenses the Caterpillar Cat product line and a Harley-Davidson line as well.

The solid overall sales and profitability environment led management to again increase full-year guidance -- this time to a range of $1.60-$1.64. Based on the current stock price, that represents a forward P/E of less than 18, which is definitely reasonable given Wolverine's history of high-single-digit sales growth and double-digit earnings gains.

Wolverine World Wide is clearly an appealing investment option in the footwear industry. However, the space is crowded and a number of firms are outperforming the company. Over the past couple of years, solid operational improvements have contributed to hefty stock gains at Deckers Outdoor (NASDAQ:DECK), Steve Madden (NASDAQ:SHOO), and Skechers (NYSE:SKX).

Even Payless (NYSE:PSS) has outperformed Wolverine recently and will soon acquire Stride Rite (NYSE:SRR), making the leap from retailing to shoe branding to boost its own margins. Wolverine has actually rewarded investors handsomely over the past five years. Perhaps the stock has just paused to catch its breath so far in 2007. As long as it keeps posting strong earnings gains, investors have little to worry about going forward.

For related Foolishness:

Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.