Why did WWW's Q4 2024 EPS surprise analysts?

Wolverine World Wide's (WWW) Q4 2024 EPS did not surprise analysts, as the EPS was reported at $0, which was neither a surprise nor a disappointment, considering the analysts' expectations. However, the company's performance in other areas, such as revenue growth and margin improvements, exceeded analysts' expectations, contributing to the stock's positive performance. 1. **Revenue Growth**: Despite a 7% decline in revenue versus the prior year, WWW's revenue for the third quarter exceeded expectations, with $440 million reported, which was $20 million above the outlook of $420 million. This indicates that the company's revenue performance was stronger than anticipated. 2. **Margin Improvements**: Wolverine World Wide achieved a record gross margin of 45.3% in Q3 2024, up 450 basis points from the previous year, driven by lower supply chain costs and reduced sales of end-of-life inventory. This significant improvement in gross margin reflects better operational efficiency and cost management, which could have contributed to the positive earnings surprise. 3. **Debt Reduction and Financial Stability**: WWW has made substantial progress in reducing its debt levels, with a significant decrease in leverage ratio, which dropped to 5.3x at the end of 2024, down from 9.2x at the end of 2023. This improvement in financial stability could have positively influenced the company's earnings, as it indicates lower interest expenses and a stronger balance sheet. In conclusion, while the EPS may not have surprised analysts, the company's strong revenue growth, significant margin improvements, and effective debt reduction efforts likely contributed to a better-than-expected earnings report.