Shares of Wolverine World Wide, Inc. jumped 21.5% last week to close at $25.00 on Friday after the company announced strong first quarter sales and earnings growth and then moved to upgrade guidance for the year on stronger backlogs and improving margins. Total revenues were $262.8 million for the period, a 7.2% increase from $245.2 million in revenues in Q1 last year. Europe revenues were up 12% for the quarter. Net income was up 21.7% to $19.6 million, or 34 cents per share, compared to $16.1 million, or 27 cents per share, in the year-ago period. Gross margins improved 100 basis points to 40.3% of sales for the quarter.

Merrell was again the primary driver of both sales and backlog growth for both the Outdoor Group and the company, posting a 17% increase in revenues for the quarter. The company said the brand saw “strong gains” in the U.S., Canada, and Europe, as well as with International distributors. Management said women’s was particularly strong in the period and that gains for the brand in outdoor specialty and footwear specialty stores were “particularly impressive.”

Company Chairman and CEO Tim O’Donovan said the low-profile sports fashion looks from Merrell that have been a significant sales driver internationally are now “producing incremental gains” for retailers in North America.

Sebago sales were down from last year. O’Donovan said that changes in style and price went beyond their core customers’ comfort zone.

The Patagonia footwear project is on track for a scheduled launch this summer and the company is currently pre-lining with key retailers. Mr. O’Donovan said the line will have three key categories: distinctive outdoor product that reflects Patagonia’s minimalist design philosophy, eco-inspired casual and travel footwear, and surf-inspired sandalized footwear. He said the Merrell apparel line is also on schedule and on budget.

The Outdoor Group, which still posted a double-digit gain on the Merrell strength, produced roughly a third of all WWW revenues last year and is running ahead of that figure now. Earnings contribution of the group also outpaced the revenue contribution.

Hush Puppies global revenues grew 4.8% for the quarter and earnings grew at a double-digit pace. Business was flat in the U.S., but was up 6% in the U.K. on a constant dollar basis. Women’s was up 5%, while men’s and kid’s was down at the same rate.

The Heritage Brands Group, which includes Caterpillar and Harley Davidson, posted an 8.6% increase in Q1 revenues.

The Wolverine Footwear Group was off 1% for the period on a decrease in Stanley boot shipments and a small decline in Wolverine boot shipments. The Bates uniform business was “up modestly” for the quarter. Mr. O’Donovan said that Wolverine brand backlog was up in double-digits at quarter-end.

Overall order backlog for the company was up 14% and was said to be broad-based. On a constant dollar basis, backlog was up in the mid-teens.

The company reaffirmed previous guidance of EPS in the $1.34 to $1.40 per share range for the year on revenues in the $1.11 billion to $1.13 billion range, but said that they now expect earnings per share to be in the “upper half of the range.”


>>> Interesting that with a strengthening Dollar and the new EU duties on China footwear, these guys are able to move the needle. One could assume that this reflects a very strong U.S. business