Wolverine Worldwide reported revenue in the first quarter, as expected, declined modestly to $627.6
million, a decrease of 2.8 percent versus the prior year. Gains were tempered by continued soft traffic at retail in the U.S., the strategic realignment of Sperry Top-Sider's U.S. distribution, extreme weather conditions in the U.S. and the U.K., and the impact of the shift in timing of Easter business to the second quarter. Adjusted earnings were also down but ahead of management expectations. Wolverine reaffirmed its guidance for the year.
Announces Financial Results For First Quarter 2014; Reaffirms Full-Year Revenue And Earnings Guidance
ROCKFORD, Mich., April 29, 2014 /PRNewswire/ — Wolverine Worldwide (NYSE: WWW) today reported financial results for its first fiscal quarter ended March 22, 2014 that included revenue in line with expectations and adjusted diluted earnings per share that surpassed the Company's guidance.
First quarter highlights include:
- Revenue in the quarter, as expected, declined modestly to $627.6 million, a decrease of 2.8 percent versus the prior year. Growth from the Performance Group and Heritage Group was offset by softness in the Lifestyle Group.
- Gross margin was 40.8 percent, an increase of 20 basis points from 40.6 percent in the prior year first quarter.
- Excluding acquisition-related integration expenses, adjusted operating expenses in the quarter were $190.5 million, a decrease of 2.8 percent compared to the prior year's adjusted results. As a percentage of revenue, adjusted operating expenses were essentially flat with the prior year. Reported operating expenses in the quarter were $192.1 million.
- Adjusted fully diluted earnings per share were 38 cents, strong performance that was well above the company's expectations going into the quarter, compared to 41 cents in the prior year. Wall Street's consensus estimate had been 30 cents a share. Reported fully diluted earnings per share were 36 cents, a 20 percent increase compared to the prior year's reported earnings of 30 cents per share.
- First quarter revenue performance was tempered by continued soft traffic at retail in the U.S., the strategic realignment of Sperry Top-Sider's U.S. distribution, extreme weather conditions in the U.S. and the U.K., and the impact of the shift in timing of Easter business to the second quarter.
“We expect fiscal 2014 to be another record year for the company, driven, in part, by our excellent earnings performance in the first quarter,” said Blake W. Krueger, the company's chairman and chief executive officer. “Our diverse global business model which is focused on 16 brands and multiple consumer groups, distribution channels, and geographies is one of our Company's greatest strengths. We believe our global geographic balance, brand diversity, and focus on product creation and forging strong connections with our consumers will drive revenue and earnings growth in 2014.”
Additional details for the quarter:
- Foreign exchange translation lowered reported revenue in the quarter by $1.5 million.
- The reported effective tax rate in the quarter was 28.5 percent, significantly above the prior year due to a higher mix of earnings in the United States and the absence of the research and development federal tax credit.
- Inventory at the end of the first quarter was down 4.4 percent compared to the prior year, reflecting the Company's continued discipline in managing working capital.
Based on the first quarter results and outlook for the remainder of the year, the company is reaffirming its full-year revenue forecast in the range of $2.775 to $2.85 billion growth of 3 percent to 6 percent compared to prior year revenue of $2.69 billion. The company is also reaffirming its adjusted earnings forecast in the range of $1.57 to $1.63 per share growth of 10 percent to 14 percent compared to prior year adjusted earnings per share of $1.43. On a reported basis, earnings per share are expected in the range of $1.48 to $1.54 per share.
The company's portfolio of d brands includes: Merrell®, Sperry Top-Sider®, Hush Puppies®, Saucony®, Wolverine®, Keds®, Stride Rite®, Sebago®, Cushe®, Chaco®, Bates®, HYTEST®, and Soft Style®. The Company also is the global footwear licensee of popular brands including Cat®, Harley-Davidson® and Patagonia®.