Wolverine Worldwide Announces Financial Results For First Quarter 2014; Reaffirms Full-Year Revenue And Earnings Guidance

ROCKFORD, Mich., April 29, 2014 /PRNewswire/ -- Wolverine Worldwide 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% 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%, an increase of 20 basis points from 40.6% 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% 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 $0.38, strong performance that was well above the Company's expectations going into the quarter, compared to $0.41 in the prior year. Reported fully diluted earnings per share were $0.36, a 20% increase compared to the prior year's reported earnings of $0.30 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%, 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% 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% to 6% 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% to 14% 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 will host a conference call at 8:30 a.m. EDT today to discuss these results and current business trends.  To listen to the call at the Company's website, go to
www.wolverineworldwide.com, click on "Investor Relations" in the navigation bar, and then click on "Webcasts & Presentations" from the side navigation bar of the "Investor Relations" page.  To listen to the webcast, your computer must have a streaming media player, which can be downloaded for free at www.wolverineworldwide.com.  In addition, the conference call can be heard at www.streetevents.com. A replay of the call will be available at the Company's website through June 20, 2014.

With a commitment to service and product excellence, Wolverine World Wide, Inc. is one of the world's leading marketers of branded casual, active lifestyle, work, outdoor sport, athletic, children's and uniform footwear and apparel.  The Company's portfolio of highly recognized 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^®. The Company's products are carried by leading retailers in the U.S. and globally in over 200 countries and territories. For additional information, please visit our website, www.wolverineworldwide.com.

This press release contains forward-looking statements, including statements regarding expected 2014 financial performance, the Company's growth prospects for 2014 and beyond, and statements about continued effectiveness of the Company's global business model. In addition, words such as "estimates," "anticipates," "believes," "forecasts," "plans," "predicts," "projects," "is likely," "expects," "intends," "should," "will," variations of such words, and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions ("Risk Factors") that are difficult to predict with regard to timing, extent, likelihood, and degree of occurrence.  Risk Factors include, among others:  the Company's ability to continue to integrate and realize the benefits of the PLG Acquisition on a timely basis or at all; the Company's ability to successfully develop its brands and businesses; changes in interest rates, tax laws, duty structures, tariffs, quotas, or applicable assessments in countries of import and export including anti-dumping measures and trade defense actions; changes in consumer preferences, spending patterns, buying patterns, or price sensitivity; changes in future pension funding requirements and pension expenses; the ability to secure and protect owned intellectual property or use licensed intellectual property; cancellation of orders for future delivery, or the failure of the Department of Defense to exercise future purchase options or award new contracts, or the cancellation of existing contracts by the Department of Defense or other military purchasers; changes in planned customer demand, re-orders, or at-once orders; changes in relationships with, including the loss of, significant customers; the availability and pricing of footwear manufacturing capacity; reliance on foreign sourcing; failure of international licensees and distributors to meet sales goals or to make timely payments on amounts owed; disruption of technology systems; regulatory or other changes affecting the supply or price of materials used in manufacturing; the impact of regulatory or legal proceedings and legal compliance risks; the availability of power, labor, and resources in key foreign sourcing countries, including China; the cost, availability, and management of raw materials, inventories, services, and labor for owned and contract manufacturers; the impact of competition and pricing; the impact of changes in the value of foreign currencies; the development of new initiatives; the risks of doing business in developing countries and politically or economically volatile areas; retail buying patterns; consolidation in the retail sector; changes in economic and market conditions; acts and effects of war and terrorism; seasonality and weather; problems affecting the Company's distribution system, including service interruptions at shipping and receiving ports; the failure to maintain the security of personally identifiable and other information of customers, stockholders, and employees; and additional factors discussed in the Company's reports filed with the Securities and Exchange Commission and exhibits thereto.  The foregoing Risk Factors, as well as other existing Risk Factors and new Risk Factors that emerge from time to time, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.  Furthermore, the Company undertakes no obligation to update, amend, or clarify forward-looking statements.

 

 

 

 

 

 

 

 

 

 

 

SOURCE Wolverine Worldwide