Wolverine World Wide said that Merrell continues to be its major growth driver, but company president and CEO Tim O’Donovan said it is also encouraging to see major contributions from the other footwear businesses.

“With the exception of Caterpillar footwear, all of our major footwear groups achieved improved sales in the quarter; and all of the footwear groups reported improved earnings”, said O’Donovan.

O'Donovan had a busy morning Wednesday, announcing the results of the company's fiscal 2003 third quarter on CNBC's morning show at 6:40 a.m. before conducting a mid-morning analyst call and an early afternoon investor conference. He said Merrell was growing sales at “twice the rate” of the industry.

Total WWW revenue for Q3 ended September 6, 2003 rose 5.2% to $230.6 million versus $219.2 in the year-ago period. Merrell sales were up in mid teens, Hush Puppies was up in the mid single digits, Wolverine Group (including Harley Davidson) was up in the mid to high singles.  Merrell was said to be on track for a 15% increase for the year.

Overall backlog was up 5.5% at the end of the quarter.
Third quarter 2003 earnings increased 7.1% to $16.4 million, or 40 cents per share, compared to $15.3 million, or 37 cents a share, generated during the same quarter last year. Diluted EPS rose 8.1%

“Our business portfolio is generating strong operating leverage,” reported Wolverine's CFO, Stephen L. Gulis Jr. “Our record third quarter earnings per share was driven by a 200 basis point expansion in gross margin, which reached 37.6 percent for the third quarter. This increase relates primarily to heightened consumer demand for our higher margin lifestyle product offerings, along with reduced inventory markdowns and improved operating efficiencies.”

Inventories were reduced 4.2% and is forecasted to grow at “two thirds of the futures sales growth rate”. Accounts receivable was flat to last year with Day Sales Outstanding reduced by nearly 8%.

The company said it expects to meet its previously stated full year 2003 revenue guidance of $875 million to $885 million and earnings per share guidance in the $1.21 to $1.24 range. Gulis noted that in order to achieve the sales target that WWW “will need solid re-order levels in the fourth quarter.”  

Re-order activity in Q3 was flat to slightly up vs. LY.
Initial goals for 2004 would see revenue increase to the $945 to $965 million range, with earnings per share of $1.34 to $1.40.


>>> Same story, different quarter, but the other brands appear to be helping out a bit…