Citing worsening business conditions in Europe, Wolverine World Wide indicated last week that its third-quarter revenues and earnings will likely fall “modestly below” guidance given in July.

At the time the company announced Q2 results, Wolverine said it expected Q3 revenue growth to be in the low to mid-single-digit range and EPS to be approximately flat with the prior year. EPS is now expected to come in at around 72 cents a share, down from 82 cents earned in the year-ago third quarter. Last week, shares of Wolverine slid xx to xx trading on the New York Stock Exchange.

At Goldman Sachs Global Retail Conference, Don Grimes, Wolverine’s SVP, CFO & treasurer, noted that the company had warned that the European market would remain difficult but the last 8 weeks of the quarter turned out “even more challenging than we expected.” Quarter-to-date revenue in the broader EMEA region was down double digits versus the prior year.

“It's been a combination of tough economic conditions, as well as kind of an overhang from the Olympics,” said Grimes. “Unlike a positive lift from the Olympics, it's actually been a negative as about 1.5 million people kind of left Central London during the Olympics and the tourists that were there weren't buying shoes.”

He added that the weather “has not been conducive in the broader European market for us and it's just been a very tough go in the European market.”

Blake Krueger, Wolverine’s chairman, CEO and president, added that the U.K., which accounts for about 40 percent of the company’s EMEA pairs overall, had notable been “hit pretty hard” this year. Adding to the austerity measures was a warm fall in the U.K. followed by a cold and rainy spring and early summer as well as the lack of any expected Olympics lift.

The EMEA represents about a quarter of Wolverine’s business.

On the brighter side, Grimes noted that the US market “continues to be strong.” Quarter-to-date revenue in the US, its largest market, is up mid-single digits, with particular strength for Merrell, Hush Puppies and Sebago. Consumer direct is also still enjoying positive comps and improved profitability versus the prior year.

Wolverine’s business is likewise “still strong” in Latin America and Asia-Pacific, where combined the company does about a third of its business.

Looking to the fourth quarter, Krueger said tough conditions are expected in Europe in the near term. Added Krueger, “The macroeconomic conditions over there, the level of uncertainty, the conservative nature of the retailers and consumers; we think, frankly, that's going to continue in Europe.”

But the company expects a “continued fairly strong business” in the United States along with strength in Latin Europe and Asia. He added, “The footwear in the United States remains pretty robust.”

He said the U.S. market also faces some “uncertainty” due to both macroeconomic and political concerns. Like Europe, U.S. stores have taken a “very conservative approach” over the last 12 to 18 months but he said inventories in both regions are in “pretty good shape.”

He implied that many stores are relying on greater at-once orders for spots where they’ve under-bought.

“You might have some sectors like the outdoor sector, ski equipment and some other stuff where we had a poor year last year that might have carried over and impacted some of the retailer inventories,” said Kruger. “But generally, in consumer soft goods right now, pretty clean inventories at retail, but a continuing conservative approach.”

Productwise, Grimes noted that the launch of Merrell MConnect, an extension of its Barefoot series, is expected to will surpass Merrell Barefoot, which launched spring 2011. Merrell MConnect will begin shipping in the fourth quarter of 2012 with a full launch in spring 2013. Said Grimes, “We're very, very enthusiastic and very positive about that.”

General consumer trends are working in Wolverine’s favor across its portfolio. Grimes elaborated, “Boots continues to be a hot trend. Boat shoes with Sebago and Sperry – a very important trend that continues in our favor. So, we feel like we have a number of macro trends globally that are working in favor of our product portfolio.”

Krueger also remained highly enthusiastic about the international expansion opportunities for Sperry Top-Sider, Saucony and Keds. The three brands, along with Stride Rite, are being acquired from Collective Brands. The deal is expected to close the week of October 1.

Overseas accounts for 4 percent of Sperry’s sales and 23 percent of Saucony’s. Conversations with its international partners indicate “very strong interest” for Sperry and Saucony but the company has been “kind of surprised at the level of interest” internally in Keds.

Krueger said Keds is doing only $78 to $80 million in sales and “a fraction” of the $450 million it was generating in its glory days. Krueger called Keds “still one of the most important brands in the female consumer's mind. Tremendous opportunity in the vulcanized market on a global basis.”

Overall, the acquired PLG brands conduct about 10 percent of their business outside and Grimes said a “good 3 to 5-year goal” would be to bring that to a third of sales.