Wolverine (WWW) stepping out

Wolverine World Wide, Inc. (NYSE: WWW), famous for its work boots, posted its 24th straight quarter of record profits. Revenue for 2Q2008 totaled $267.4 million, up 6.8%. EPS increased 17.9% to $0.79. More importantly, sales revenues increased in all global regions. The company's order backlog increased, indicating demand for its products outstrips supply. Inventory levels decreased 7% due to company efforts to control expenses and improve operational efficiencies. Accounts receivables increased 13%, so more money is moving through the pipeline. The company repurchased 200,000 shares of stock. Operating margins were squeezed a bit given the recent run up in raw material costs.

CEO Blake Krueger forecasts a growth rate in the 7.6-11.8% range, truly impressive when so many other retailers are struggling. This growth rate would translate into revenues in the $1.23-$1.26 billion range and EPS in the $1.83-$1.90 range. Inexplicably, the stock dropped 11.5% to $23.50 on the earnings release, despite the fact that 2Q EPS beat estimates by $0.02. The stock began to climb back a bit yesterday to close at $23.33, down from its 52-week high of $31.21, but it is dropping again this morning.