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What: Shares of Wolverine World Wide , a footwear and apparel manufacturer, slumped on Tuesday after the company reported mixed first-quarter earnings. The stock closed down 7.6% on Tuesday after being down as much as 10% during the day.
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So what: Wolverine reported $631.4 million of revenue for the first quarter, up 0.6% year-over-year and shy of analyst estimates by about $12 million. Growth was negatively affected by the strong U.S. dollar, with constant currency revenue growth a much higher 3.4%. Store closings also had a negative impact on revenue growth.
While Wolverine's revenue disappointed analysts, the company's earnings beat expectations. Wolverine reported non-GAAP EPS of $0.37, three cents higher than what analysts were expecting and a penny lower compared to the same period last year.
Wolverine reaffirmed its prior full-year guidance, calling for revenue between $2.82 billion and $2.87 billion, representing 2%-4% growth. On a constant currency basis, the company expects revenue growth of 5%-7%. Non-GAAP EPS is expected to be between $1.53 and $1.60.
Now what: Like many companies with significant international sales, Wolverine is suffering from the strength of the U.S. dollar. The negative reaction, sending the stock tumbling, seems overdone, although shares of Wolverine have risen considerably over the past six months.
Currency fluctuations will continue to have significant effects on Wolverine's business for the rest of the year, according to the company's guidance, but this is ultimately a short-term issue. The underlying fundamentals of the business are what investors should focus on.
The article Why Shares of Wolverine World Wide Inc. Slumped Today originally appeared on Fool.com.
Timothy Green has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.