Wolverine World Wide Still Dependent On Promotions, Now Facing Currency Headwinds

Argus provided its outlook on Wolverine World Wide, Inc. WWW in a Wednesday report. It maintained both its EPS estimates and Hold on shares. The analysts expect 2016 EPS to stand at $1.46 and 2017 EPS at $1.55.

The company noted that Wolverine, like many retailers, has relied heavily on promotions to offset slower store traffic and weak consumer spending, estimating significant promotional pricing to continue in the near term. Moreover, despite the company's prospects appear stronger in overseas markets, international sales (30 percent of total revenue) are hurt by negative currency translation.

However, the analysts believe spending on footwear will increase as the economy recovers and consumer confidence improves, and expect this to benefit Wolverine over time, despite the weaker near-term outlook.

"We also have a positive view of the 2012 acquisition of PLG, which has expanded the company's retail footprint, particularly in the athletic and children's markets. As such, our long-term rating remains BUY," wrote Argus.