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Insider Selling Is Not What’s Wrong With Shares Of Wolverine Worldwide

Insider Selling Is Not What’s Wrong With Shares Of Wolverine Worldwide

Wolverine Worldwide Plunges On Weak Outlook 

Shares of Wolverine Worldwide (NYSE: WWW) plunged more than 10% this week but, for those of you turning to the insider selling data, it is not insider selling that is the problem. While insiders have shed nearly $3.0 million worth of their shares in 20 transactions over the past year it is the results and outlook that are weighing on shares. The company reported Q3 results and confirmed what the market had already begun to suspect. Supply chain challenges are cutting into both the top and bottom line and having a profound effect on the guidance. The good news is that insiders and institutional money still view the stock as a buy. Insiders hold nearly 5% of shares while institutions control another 91.5%. 

“The Company delivered strong double-digit revenue growth and exceptional earnings leverage, despite the increased supply chain disruption caused by Vietnam factory closures and global logistics delays” said Blake W. Krueger, Wolverine Worldwide’s Chairman and Chief Executive Officer.

Wolverine Worldwide Hit By Supply Chain Woes 

Wolverine had a very strong quarter in which revenue grew more than 29% over last year but there is a problem. The revenue missed the consensus by 250 basis points due to supply chain disruptions that shaved an estimated $60 million from the top line. Including the lost revenue, the company would have produced a net $696.7 million or enough to have beaten the consensus by 650 basis points. 

“The unplanned supply chain disruptions resulted in at least a $60 million negative revenue impact in Q3. Demand for our brands remains very strong as evidenced by continued strength in sell-through trends at retail and a robust order book that extends into Q3 2022.”


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Moving down into the details, the report does get better. eCommerce, a driving force of the company’s growth, grew 45% YOY and nearly 130% versus 2019 to drive solid gains in the margin. The company’s gross margin improved by 220 basis pints GAAP and 330 basis points on an adjusted basis to produce better than expected earnings despite the weakness in revenue. The company’s GAAP EPS fell short of consensus due to the recent acquisition of Sweaty Betty and investment in inventory but the adjusted earnings were strong. On an adjusted basis, EPS came in at $0.62 to beat by a penny and nearly double from the previous year. Inventory is up 26.5% from last year. 

Looking forward, the company is expecting strength to continue but also for supply chain headwinds to remain steady. The bad news is that revenue guidance is only in-line with the consensus estimate and EPS is light. 

The Technical Outlook: Wolverine Worldwide Is Range-Bound 

Shares of Wolverine Worldwide tanked in the wake of the Q3 earnings report but we don’t think much more decline is in store. The stock has been range-bound for several quarters and is still within that range. If price action continues to fall it will probably find support at the bottom ofo the range near $30. Regardless of the near-term direction in price action, shares of Wolverine Worldwide are likely to remain rangebound for the foreseeable future because of results and outlook. On the one hand, the results are good and strength should continue but on the other, the upside in growth is capped by supply chain challenges that have not yet eased. 

Insider Selling Is Not What’s Wrong With Shares Of Wolverine Worldwide

Companies in This Article:

CompanyCurrent PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Wolverine World Wide (WWW)$31.14-2.0%1.28%-27.80Buy$44.25
Fed Decriminalization of Cannabis Could Spark New Pot Stock Boom
With Democrats now controlling both houses of Congress and the executive branch, cannabis decriminalization on the federal level could be months away. This could result in established Washington State weed companies being able to market across state lines -- setting off a bidding war for quality stocks at reasonable prices.
Get All the Details on #1 Stock