Outdoor Group Continues to Set the Pace

While all four of the company’s branded operating groups and geographic areas contributed to the revenue increase, the Outdoor Group continued to lead the way.

 

The group, which consists of Merrell and Patagonia, logged another record quarter of revenues and earnings, although sales growth dipped to 2.1%, largely because a shipment to a major international distributor was pushed into the third quarter.
In North America, Merrell continues to grow in the “solid double-digits,” primarily by winning shelf space from other brands in existing channels, Krueger said. Merrell remains Wolverine’s fastest growing brand. Krueger said shipments and backlog for Merrell’s Outventure line of multi-sport, water sport and hiking footwear continue to grow at double-digits rates.


“The retailers in the U.S. are having a bit of a tough time now with traffic counts and sales, so as Merrell sales go up , they're obviously taking in a macro sense, market share from somebody,” Krueger said. “Specifically, the Moab Ventilator, the Access Intercept, and the Water Pro Maipo are selling well globally for men, while the Siren and Chameleon art programs continue to appeal to female outdoor consumers around the world. In the United States, sell-through of Merrell was very strong.”


Krueger said he sees the potential for WWW and its international distributors to open as many Merrell branded stores worldwide as Hush Puppy, or 400. Short term, most of that growth will occur overseas, where “retail is less overbuilt, a little bit more wide open.” 
Meanwhile, Merrell’s apparel program, which launched in Fall '07, is on plan. The business is expected to more than double in the Fall '08 season off a relatively small base.


Merrell expects to open its first company-owned U.S. flagship store in San Francisco in the third quarter. Additional stores will follow this year in Portland, OR and Birmingham, AL. In addition to flagship and regular price full-line stores, Merrell will end the year with about 700 shop-in-shops globally and 13 outlet locations in the U.S.


Krueger said Patagonia Footwear shipments were strong during the quarter given the brand’s relatively small base in the core North American market. WWW continues to add international distributors for the line, which it launched in Spring of last year under a licensing agreement with Patagonia. The men's product already ranks as the third best-selling brand at Track ‘n Trail, a Wolverine-owned retailer that also sells Keen, The North Face, Timberland and Vasque footwear through 17 stores and an e-commerce site.


The backlog for Patagonia’s women's product had “moved into the double-digits” thanks to order for an “innovative” line of winter boots.
Wolverine was able to push through 3% to 5% price increases for its 2009 collections with little backlash from retailers.
“In the U.S., in particular, they've been amazingly quiet,” Krueger said of Wolverines dealers. 
The company affirmed its full year 2008 revenue guidance of $1.23 billion to $1.26 billion and earnings per share of $1.83 to $1.90, which represents growth of 7.6% to 11.8%

Outdoor Group Continues to Set the Pace

While all four of the company’s branded operating groups and geographic areas contributed to the revenue increase, the Outdoor Group continued to lead the way.

 

The group, which consists of Merrell and Patagonia, logged another record quarter of revenues and earnings, although sales growth dipped to 2.1%, largely because a shipment to a major international distributor was pushed into the third quarter.


In North America, Merrell continues to grow in the “solid double-digits,” primarily by winning shelf space from other brands in existing channels, Krueger said. Merrell remains Wolverine’s fastest growing brand. Krueger said shipments and backlog for Merrell’s Outventure line of multi-sport, water sport and hiking footwear continue to grow at double-digits rates.


“The retailers in the U.S. are having a bit of a tough time now with traffic counts and sales, so as Merrell sales go up , they're obviously taking in a macro sense, market share from somebody,” Krueger said. “Specifically, the Moab Ventilator, the Access Intercept, and the Water Pro Maipo are selling well globally for men, while the Siren and Chameleon art programs continue to appeal to female outdoor consumers around the world. In the United States, sell-through of Merrell was very strong.”


Krueger said he sees the potential for WWW and its international distributors to open as many Merrell branded stores worldwide as Hush Puppy, or 400. Short term, most of that growth will occur overseas, where “retail is less overbuilt, a little bit more wide open.” 
Meanwhile, Merrell’s apparel program, which launched in Fall '07, is on plan. The business is expected to more than double in the Fall '08 season off a relatively small base.


Merrell expects to open its first company-owned U.S. flagship store in San Francisco in the third quarter. Additional stores will follow this year in Portland, OR and Birmingham, AL. In addition to flagship and regular price full-line stores, Merrell will end the year with about 700 shop-in-shops globally and 13 outlet locations in the U.S.


Krueger said Patagonia Footwear shipments were strong during the quarter given the brand’s relatively small base in the core North American market. WWW continues to add international distributors for the line, which it launched in Spring of last year under a licensing agreement with Patagonia. The men's product already ranks as the third best-selling brand at Track ‘n Trail, a Wolverine-owned retailer that also sells Keen, The North Face, Timberland and Vasque footwear through 17 stores and an e-commerce site.


The backlog for Patagonia’s women's product had “moved into the double-digits” thanks to order for an “innovative” line of winter boots.
Wolverine was able to push through 3% to 5% price increases for its 2009 collections with little backlash from retailers.
“In the U.S., in particular, they've been amazingly quiet,” Krueger said of Wolverines dealers. 
The company affirmed its full year 2008 revenue guidance of $1.23 billion to $1.26 billion and earnings per share of $1.83 to $1.90, which represents growth of 7.6% to 11.8%

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