Wolverine World Wide, Inc. reported that first quarter revenues totaled $281.1 million, a 6.9% increase over first quarter 2006 revenue of $262.8 million. First quarter 2007 earnings per share increased to 39 cents, a 14.7% increase over first quarter 2006 earnings per share of 34 cents. Wolverine increased its full year 2007 earnings per share estimate on the strong start to the year.
“Wolverine World Wide had a very strong first quarter, as demonstrated by our record results and continued consumer enthusiasm for our global brands,” stated Timothy J. O'Donovan, the company's chairman and CEO.
Blake W. Krueger, president and COO of the company commented, “We are pleased to report that three of our four major branded operating groups contributed to the revenue increase in the first quarter of 2007, with both the Outdoor Footwear Group and the Heritage Brands Group posting double-digit revenue gains. Hush Puppies contributed a low-single-digit revenue gain, while the Wolverine Footwear Group was negatively impacted in the quarter due to the planned decrease in the military contract business. The Outdoor Group remained the company's leading profit contributor during the quarter, while Hush Puppies, Wolverine Footwear Group and the Heritage Brands Group all produced significant double-digit profit increases.
“Our strong performance in the first quarter resulted in the company achieving its nineteenth consecutive quarter of record revenue and earnings per share. By executing our global business model and leveraging our portfolio of highly recognized global lifestyle brands, we consistently deliver record results and reward our shareholders.”
“First quarter earnings were strong as a result of gross margin expanding to an all-time record,” reported the company's CFO, Stephen L. Gulis Jr. “First quarter 2007 gross margin of 40.6% improved 30 basis points over first quarter 2006, reflecting continued growth in our lifestyle brands and an improved business mix. We decreased selling and administrative expense 10 basis points, reflecting a tight control on expenses. We are pleased with our operating margin expansion given the continuing investment in our new growth initiatives and the first quarter impact of European anti-dumping duties.
“First quarter 2007 accounts receivable were up 5.3%, and inventory levels were up 9.3% on revenue growth of 6.9%. Inventory levels at quarter end were lower than projected plan levels. The company ended the quarter with a cash balance of approximately $63 million, and we repurchased 1,164,700 shares of stock in the quarter totaling $33.1 million.”
O'Donovan concluded, “The consumer continues to embrace our global lifestyle brands, and we ended the first quarter of 2007 with our order backlog up over 8%. On the strength of the first quarter results, we are increasing the company's 2007 earnings per share estimate to range from $1.57 to $1.63, up from our previous estimate of $1.56 to $1.62, which reflects our first quarter 2007 results exceeding our plan by $0.01. We continue to expect revenue to range from $1.200 billion to $1.230 billion. These estimates are consistent with our stated long-term objectives of growing annual revenue in the mid to upper-single digit range and delivering double- digit earnings per share growth while investing in initiatives for the future.”
