Stock Buy: LaCrosse Footwear

LaCrosse Footwear (BOOT: 18.91 0.00 0.00%) is a Zacks #2 Rank stock with strong prospects for growth, an attractive dividend yield, and a reasonable valuation.

The company has an expected long-term EPS growth rate of 17.5%, a dividend yield of 2.6%, and it trades at 15x 2010 the Zacks Consensus Estimate.

Business

LaCrosse Footwear designs, develops, manufactures, and markets footwear and apparel for the work and outdoor markets. The company has two brands: DANNER and LACROSSE.

Impressive First-Quarter Results

On April 22, LaCrosse Footwear announced net sales of $34.2 million, an increase of 32.1% from the year-ago quarter. The company reported EPS of $0.25, easily beating the Zacks Consensus Estimate of -$0.01.

The upside was driven by stronger than anticipated sales in its government sales channel and higher profit margins. The company's gross margin expanded 230 basis points year-over-year, due to improved manufacturing efficiencies.

Estimates

After the company's impressive first-quarter report, analysts boosted their estimates for 2010 and 2011. The Zacks Consensus for 2010 increased 16 cents to $1.24, while the Zacks Consensus for 2011 is higher climbed 3 cents to $1.19.

Balance Sheet

LaCrosse has a debt-free balance sheet. After paying a special dividend of $1.00 per share, the company ended the first quarter with $19.7 million in cash, which is a record high for the company. The company also reduced its inventory 22% compared to the first quarter of 2009.

Read the April 22 commentary on Microchip Technology.

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