MarketWatch  Aug 9  Comment 
Wolverine World Wide share swing from a gain of over 12% to a decline of nearly 7% after the company got on its post-earnings conference call and gave analysts a third-quarter outlook that was below expectations.
Benzinga  May 17  Comment 
Following Wolverine World Wide, Inc.'s (NYSE: WWW) first-quarter results last week and Baird's travel with the management in Europe, the firm said its doubts regarding top-line fundamentals appear to be lifting. Accordingly, the firm upgraded the...


Wolverine World Wide, Inc. (NYSE: WWW) is a leading marketer of branded casual, active lifestyle, work, outdoor sport and uniform footwear and apparel and accessories. The Company’s well-recognized brand names such as Merrell and Hush Puppies feature products with contemporary styling and proprietary technologies designed to provide maximum comfort and performance.[1]

Business Summary

WWW sells products in the United States, Canada and approximately 10 countries in Europe to a wide range of retail customers, including department stores, national chains, catalogs, specialty retailers, mass merchants and Internet retailers, and to governments and municipalities. Many of the retailers carrying Wolverine products operate multiple storefront locations. WWW products are marketed worldwide in a total of approximately 190 countries and territories through Company-owned wholesale and retail operations, licensees and distributors.[1]

Approximately 50 million pairs/units of the Company’s branded footwear and apparel were sold in the fiscal year 2010 in approximately 190 countries and territories around the world. WWW’s primary competitive advantages are its well-recognized brand names, its patented proprietary designs and comfort technologies, its wide range of distribution channels and its diversified manufacturing and sourcing base.[1]

Business Segments and Product Portfolio


WWW’s business is organized into four branded footwear, apparel and licensing operating segments: The Outdoor Group, Wolverine Footwear Group, The Heritage Brands Group, and The Hush Puppies Group. In addition, they also operate three other business segments: Wolverine Retail, which consists of 81 retail stores in North America and 7 retail stores in the United Kingdom that feature footwear and apparel; Wolverine Leathers Division, which markets pigskin leathers primarily to footwear companies; and Wolverine Procurement, Inc., a wholly-owned subsidiary where raw pigskins are purchased and cured for sale to various customers. As of December 29th 2010, though, all assets of Wolverine Procurement, Inc. were sold to a third party buyer.[1]

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WWW's operating segments and revenues for FY 2010[1]

Brands and Marketing

Bates Brand
Bates Brand[2]
Cat Brand
Cat Brand[2]
Chaco Brand
Chaco Brand[2]
Chushe Brand
Chushe Brand[2]
Harley Davidson Brand
Harley Davidson Brand[2]
HyTest Brand
HyTest Brand[2]
HyTest Brand
HyTest Brand[2]
Merrell Brand
Merrell Brand[2]
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WWW's Merrell brand is partnering with Vibram to create barefoot outdoor shoes. [3]
Patagonia Brand
Patagonia Brand[2]
Sebago Brand
Sebago Brand[2]
Wolverine Brand
Wolverine Brand[2]
Track 'n Trail Brand
Track 'n Trail Brand[2]
  • Bates

This brand supplies footwear for the armed forces. Expect sales of this brand to rise upon a rise in US defense and military activity. Thus, sales are also highly dependent upon government budget and spending.

  • Cat

High performance work boots and lifestyle footwear for men, women, and children. The product line consists of rugged work boots, but also some with a little more style.

  • Chaco

Originally a river guides seasonal shoe, this brand consists of waterproof flip flops and sandals. They are marketed to those who seek adventure in the outdoors and have created the "z-tan" from the way the straps lay over your feet which customers are encouraged to post pictures of on the Chaco website.

  • Cushe

Cushe (pronounced “Cushy”), is a design-led footwear brand that is centered around unique designs to accommodate an assortment of lifestyles. One such design includes the hem holster to keep the back of baggy jeans from dragging under your feet as you walk.

  • Harley-Davidson

This brand markets itself to the expansive and loyal Harley-Davidson segment. With the motorcycle company itself centered around its extremely loyal fan base, a brand such as this is sure to bring in consistent long term revenue. It also does run the risk of a possible but unlikely failure on the part of Harley-Davidson to continue to add value to their customers.

  • Hush Puppies

Possibly the most well-known brand from WWW, Hush Puppies appeals to the casual wearer. The brand provides an assortment of footwear from semi formal to casual loafers to leather sandals. This brand, known for good old American quality and comfort, is certainly one of WWW's most important assets.

  • HyTest

A brand constructed on safety in the manufacturing sector, these products offer features such a steel toes, electrical hazard composite and slip resistance for the factory workers who need it most. With technological unemployment on the rise and the decline of the dominant auto industry presence in Michigan, this brand probably wont be churning in the most revenue in the future.

  • Merrill

Another very recognizable brand and the largest revenue producing, Merrill looks to offer the choice of outdoor footwear that can also be an everyday lifestyle footwear. Last fall came the announcement that WWW was partnering with Vibram, the maker of the successful Five Fingers shoe to create their own line of bearfoot shoes. WWW seeks to make this brand their first billion dollar brand.[3]

  • Patagonia

This brand offers outdoor and sporting as well as casual apparel, and they center there image around environmentalism. It is a forward looking prospect and could see growth in the future given the current markets trends of "going green".

  • Sebago

The "world’s finest hand sewn and performance marine footwear", this brand directly competes with Sperry brand docksiders.

  • Wolverine

Work, sport, and rugged casual footwear. One of the company's best known brands.

  • Track 'n Trail

As part of Wolverine World Wide, Inc. since 2001, Track ’n Trail is a part of their retail segment. It offers a wide selection of WWW brands online or in-store at one of the thirteen retail locations in nine states. The highest concentration of 3 stores is in the state of Michigan.

Strategic and Competitive Analysis

Competitor Comparison

WWW markets its products in a highly competitive and fragmented environment. They compete with numerous domestic and international marketers and importers, some of which are larger and have greater resources. They claim to have at least forty major competitors for its brands of footwear and apparel. The following lists four of their major competitors:

TBL sells shoes and outdoor clothing. The company is best known for its urban boots, known as "Tims," and footwear accounts for more than 70% of the company's sales. TBL posted a revenue of 1,429 Million in FY 2010 compared to WWW's 1,248.5 million. Thus, based on revenue, it is a larger company than WWW, but since the market is so fragmented, size may not be the only thing that matters in the competitive landscape. Other factors such as brand loyalty and market niches also come into play.

SKX is a sports and casual footwear company. They posted a revenue 2,011 million in FY 2010 compared to WWW's 1,248.5 million. Once again, SKX is a larger company by revenue, but since it competes more so in the sports footwear market, differences in segments make this company a competitor in only certain areas of WWW's business.

  • R. Griggs Group Ltd. – Doc Martens

The creator of Dr. Martens (aka Doc Martens or Docs), the chunky, thick-soled shoes and boots sold in specialty stores and major retailers. The style has grown beyond the classic, black, lace-up boot to include more than 1,000 variations of boots, shoes, and sandals for adults and children. R. Griggs, one of the UK's biggest shoemakers, returned to its work-boot roots when sales dwindled, but it's back to getting its feet wet elsewhere again. It is a privately-held company.

  • Red Wings Shoe Company, Inc.

Based in Red Wing, Minnesota, Red Wing Shoe Company, Inc. manufactures and markets hard working boots and shoes for work and play. It offers work shoes and boots, motorcycle boots, and accessories. The company also offers various footwear brands for work and play. It offers its products through dealers or distributors in the United States and internationally. It is also a privately held company.

Financial Performance


WWW Price/Earnings ratio for FY 2010 was 18.8, TBL was 24.8, and SKX was 6.8. The industry average was 21.2. [4] Investors seem more confident in TBl than they do in WWW, but steady and healthy growth in revenues over the past year hasn't given any reason to fear for the company going under. Thus, a comparably high Price/Earnings, yet still under the industry average.

WWW’s Price/Book ratio or price to equity ratio (P/E) was 3.6, TBL was 3.7, and SKX was 1.0. The industry average was 3.1.[4] Both WWW and TBL are above the industry average, bu there are risks in investing in companies with high P/E ratios. Since they are selling at a premium, its positive performance has already been realized, and if the company has even a little slide of performance, you could see investors overreacting and driving down the price because their high expectations have turned for the worse. As it seems, though, WWW is still, although higher, close to the industry average and not at an exceedingly high point. So, this phenomenon may have little chance if any of occurring in the future.

Profitability & Efficiency

WWW's profitability and efficiency ratios compared to competitors for FY 2009, 2010, and Trailing Twelve Months (TTM)
WWW's profitability and efficiency ratios compared to competitors for FY 2009, 2010, and Trailing Twelve Months (TTM)[5]
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WWW's TTM profitability ratios compared to competitors[5]

According to Trailing Twelve Months (TTM) data as of 4/2011<ref=Morningstar/>, WWW's return on invested capital (ROIC), at 20.31%, is the highest amongst it's competitors ahead of TBL (16.01%) and SKX (15.52). This would suggest that WWW is efficiently using its invested capital to generate returns and is doing so at a higher rate than its competitors. Asset turnover for WWW seems to be stuck in the middle of its competitors with not a lot of variance among them. WWW may need to improve upon more efficiently generating revenues from its assets if it wishes to hold a competitive advantage in that arena.

While WWW's gross margin stands at the lowest amongst its competitors, their operating margin is highest. This may be a good sign for WWW, because since gross margin only includes the base costs of producing the product such as the raw materials, they could simply just be making higher quality products and then making up for that cost by increasing their operating efficiency and thus decreasing operating costs and thus offset the high cost of quality raw materials.

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WWW's TTM efficiency ratios compared to competitors[5]

As far as efficiency with cash flows and inventory, WWW is currently in last place with a cash conversion cycle of 116 days, above TBL (85 days) and SKX (74 days). This shows a low capability for the firm to efficiently convert its products into cash through sales, which is extremely important for any retailer’s bottom line as it significantly reduces liquidity risk. Then again, WWW's DPO is very low compared to its competitors, so it could be that it just is paying it's creditors back sooner, which is a good thing as long as they have the appropriate cash reserves on hand for potential economic downfalls.

Human Resources

Key Personnel

Below is a table of WWW's top executives, their age, position, FY 2010 compensation, past experience, and education.

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WWW's top executives, age, position, FY 2010 compensation, past experience, and education.[6][7]


  1. 1.0 1.1 1.2 1.3 1.4 WWW 10-K, 3/2/2011
  2. 2.00 2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10 2.11 WolverineWorldWide.com, 4/30/11
  3. 3.0 3.1 "Shoemaker Wolverine World Wide's next big bet? The anti-shoe", The Grand Rapids Press, 10/6/10
  4. 4.0 4.1
  5. 5.0 5.1 5.2 Morningstar.com, 4/30/11
  6. WWW Proxy Statement, 4/21/11
  7. Forbes.com Profiles, 4/30/11
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