Rockford, MI—A decline in gross margin took a toll on Wolverine World Wide Inc.’s fourth quarter profits despite sales increases.
For the quarter ended Dec. 31, the maker of Hush Puppies, Merrell and other footwear brands saw profits fall to $23 million, or 47 cents a share, from $25.6 million, or 52 cents a share a year ago.
Revenue rose 5.6% percent to $406.5 million, from $385 million in 2010.
Wolverine’s results missed analysts’ average estimate for earnings of 45 cents a share on expected sales of $407.02 million.
Gross margin contracted 20 basis points to 36.9% compared with the prior-year quarter, reflecting a rise of 20 basis points in the cost of goods sold as a percentage of sales.
Full Year Sales Up 12.9%
By division, revenues increased 4.5% year over year to $141.1 million for outdoor, 4.6% to $158.4 million for Heritage, and 13.4% to $57.3 million for Lifestyle. Other business units, which comprise Wolverine retail and leathers, posted a revenue growth of 23.6% to reach $5 million.
The company ended its fiscal 2011 with profits of $123.3 million, $2.48 a share, up 14.3%, from $104.5 million, or $2.11 share for 2010. Revenues were up 12.9% to $1.4 billion, from $1.2 billion in 2010.
“Our portfolio of strong, global lifestyle brands combined to deliver another year of record performance,” said Blake Krueger, the company’s ceo. “Each of our three branded operating groups and our direct-to-consumer business contributed to the year’s outstanding results. Additionally, all major international regions reported double-digit revenue growth, as our newly created International Group focused on the significant opportunities outside of North America.”
He added that the company was in a strong position heading into the new year, with several global consumer trends and macro lifestyle trends working in its favor.
Looking ahead, Wolverine’s 2012 forecast earnings between $2.60 and $2.70 a share, and revenues expected in the range of $1.485 billion to $1.525 billion. Analysts’ average estimate expects earnings of $2.72 a share on revenues of $1.52 billion.
The company said it expects a modest increase in gross margin for fiscal 2012 on the back of favorable product mix and planned increases in selling price.
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