Wolverine Offers Debt - Analyst Blog
September 25 2012 - 1:05PM
Zacks
Wolverine World Wide
Inc. (WWW), one of the leading designers, manufacturers
and marketers of branded footwear and apparel, announced the
offering of $375 million worth of senior notes.
The company stated that the issue
will have the guarantee of its certain domestic subsidiaries, and
is scheduled to mature in 2020.
The announcement reflected the
company’s strategic approach to utilize the proceeds from the debt
offering to fund its acquisition of the Performance + Lifestyle
Group business (the "PLG Business") of Collective Brands
Inc (PSS). Moreover, the company intends to repay loans
under its credit facility with the amount.
Earlier in May, Wolverine announced
the acquisition of Collective Brands’ Performance + Lifestyle Group
(PLG) unit. The PLG unit sells footwear and related products, both
wholesale and retail, for children and adults under popular brands
including Stride Rite, Sperry Top-Sider, Saucony, and
Keds.
Moreover, after its dismal second
quarter results, it is encouraging to observe the company’s focus
on enhancing its portfolio of brands, as the deal will provide
ample opportunities to boost its profitability.
The company posted
lower-than-expected second-quarter 2012 results, however management
maintained its earnings guidance for the current fiscal. Wolverine
expects fiscal 2012 earnings between $2.70 and $2.80 a share,
representing a growth of 8.9% to 12.9% from the prior year.
Further, Wolverine expects total
revenue in the range of $1.46 billion to $1.50 billion for fiscal
2012, reflecting a year-over-year growth of 3.6% to 6.4%.
For the third quarter of 2012, the
company expects revenues to be in the low-to-mid-single-digit
range, while earnings are expected to remain flat year over year.
Currently, we are maintaining a
long-term ‘Neutral’ recommendation on the stock. However,
Wolverine, which competes with Deckers Outdoor
Corporation (DECK) and Skechers USA Inc.
(SKX), has a Zacks #4 Rank that translates into a short-term ‘Sell’
rating as secular headwinds act as short-term deterrents.
DECKERS OUTDOOR (DECK): Free Stock Analysis Report
COLLECTIVE BRND (PSS): Free Stock Analysis Report
SKECHERS USA-A (SKX): Free Stock Analysis Report
WOLVERINE WORLD (WWW): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Payless Shoesource (NYSE:PSS)
Historical Stock Chart
From Aug 2024 to Sep 2024
Payless Shoesource (NYSE:PSS)
Historical Stock Chart
From Sep 2023 to Sep 2024