WWW - Sweaty Betty owner Wolverine World Wide falls further after downgrade lousy earnings

2023-08-11 09:35:58 ET

Wolverine World Wide, Inc. ( NYSE: WWW ) 5.6% on Friday morning after the stock got a downgrade following poor quarterly earnings.

Seaport Research Partners downgraded the stock to Neutral from Buy, having lost confidence in its prior thesis. The firm had upgraded shares earlier this year on the belief that WWW was taking the right steps to return to a 12% operating margin.

Shares of the footwear maker tumbled 26% on Thursday after the company’s second-half outlook disappointed and the footwear maker unexpectedly announced a new chief executive officer.

“We were bullish on a big uptick in EPS, and we liked that the EPS improvement was coming from margins and not sales,” Seaport analyst Mitch Kummetz wrote in a note.

The company cut its full year operating margin guidance from 8.5% to 5.0% this week.

Seaport expects a weak spring order book and “we’re not confident that WWW’s brand portfolio isn’t losing market share in total,” Seaport said. “All told, we have lots of questions, and questions don’t instill confidence.”

This week, CEO Brendan Hoffman exited abruptly and President Christopher Hufnagel was appointed in his place, effective immediately.

"Our second half outlook, as reflected in our updated annual guidance, is disappointing but we are confident that the work we are undertaking will drive significant profit improvement in 2024 and quickly set a strong growth foundation for the company," Hufnagel said about the earnings report.

The stock has one Strong Buy, one Buy and seven Hold ratings from Wall Street analysts.

More on WWW:

• Wolverine World Wide, Inc. ( WWW ) Q2 2023 Earnings Call Transcript
• Wolverine World Wide falls after disappointing outlook, CEO transition
• Wolverine World Wide Non-GAAP EPS of $0.19 in-line, revenue of $589.1M beats by $6.13M

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