Wolverine World Wide Inc. Common Stock (WWW) fair value

ACCE thesis

Wolverine World Wide makes Merrell hiking boots, Saucony running shoes, Sweaty Betty activewear and Chaco sandals, selling through wholesale accounts, its own e-commerce sites and retail stores. The brand portfolio is the moat: Saucony in particular has built a following among serious runners, which gives the company pricing power that shows in a 47.1% gross margin. Revenue growth of 6.8% is the kind of organic expansion that rarely shows up in footwear, and a 27.7% return on equity suggests the capital is being put to work effectively. At 9.9 times forward earnings against 15.5 times trailing, the market is pricing in a meaningful earnings recovery from the current 9.8% operating margin, so the question for the deeper work is whether margins can rebuild and hold. The company is small enough at a 1.6 billion dollar market cap to sit outside the major indices, which may keep coverage thin and leave room for mispricing.