The versatile footwear retailer Wolverine World Wide Inc. (WWW) recently announced a new share buyback program besides declaring its regular quarterly dividend.
Under the new share repurchase program, which replaced the one authorized in 2010, the company authorized buybacks worth $200 million. Usually, these repurchases are spread over a period of 4 years. However, the buyback amount is determined after considering factors like market conditions, share price and credit related limitations faced by the company.
Coupled with this, Wolverine announced a cash dividend of 6 cents a share, to be paid on a quarterly basis. This dividend is the same as the one declared previously, amounting to 24 cents on an annualized basis, payable on May 1, 2014 to shareholders of record as of Apr 1, 2014.
The company believes in utilizing its cash mainly by repaying its debt and returning it to shareholders in the form of dividends and share buybacks, reflecting its commitment towards shareholders.
Recently, Wolverine discussed its preliminary results for the full year ended Dec 28, 2013, as per which it expects revenues for the year to rise 5.5% from last year, on a pro forma basis. Moreover, it envisions earnings to dovetail with the upper end of the previous guidance of $1.37–$1.42 per share. The Zacks Consensus Estimate stands at $1.42, in line with the company’s expectations.
Wolverine has a positive outlook for 2014, as its operational efficiencies, formidable brand portfolio and leverage from the recent acquisitions (Collective Brands’ Performance + Lifestyle Group) position it favorably to generate healthy sales and earnings. Moreover, exclusive assortments remain popular among consumers and impart the company an edge over competitors like Nike and Deckers Outdoor Corporation (DECK).
This Michigan-based retailer currently holds a Zacks Rank #4 (Sell). However, better-ranked stocks in the apparel-shoe industry include Foot Locker, Inc. (FL) and Finish Line Inc. (FINL), both holding a Zacks Rank #2 (Buy).
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