Rockford, MI—While one-time charges and expenses relating to its recent acquisitions shaved 5% off Wolverine Worldwide’s first quarter net income, the footwear and accessories company’s adjusted earnings still beat analysts’ forecasts.
For the quarter ended March 23, Wolverine reported today net income of $29.8 million, or 60 cents a share, compared with $31.2 million, or 64 cents a share, a year earlier. Excluding one time charges and integration expenses, the company’s adjusted earnings were 81 cents a share. Analysts’ average estimate expected 55 cents a share.
Net revenue got a boost from contributions of the company’s recently-acquired brands such as Saucony, Sperry Top-Sider, Stride Rite and Keds. Sales more than doubled to $645.9 million ahead of analysts’ expectations for $630.5 million.
Selling, general and administrative expenses climbed to $196 million from $95.2 million. The current quarter also included a one-time charge of $15.2 million related to transaction and integration costs of the new brands.
Stand-Out Performances by Sperry Top-Sider, Merrell
“We are exceptionally pleased to be off to such a strong start in 2013, particularly as this represents the first full fiscal quarter that includes our four new lifestyle brands,” said Blake W. Krueger, chairman/ceo. “As we anticipated, the addition of Sperry Top-Sider, Saucony, Stride Rite, and Keds has made our brand offerings even stronger, and we are already seeing very positive reactions to the broader portfolio from key retail and global distributor partners.
Krueger also said the U.S. market was key to the quarter’s sales. “As expected, challenging conditions in Europe continue, but the resiliency of the global consumer, the strength of our international business, and standout performances from brands like Sperry Top-Sider and Merrell combined to more than offset these challenges,” he said.
The company’s gross margin narrowed 40 basis points to 40.6% due to negative impact of foreign currency exchange, lower relative contributions from high-margin third-party distributor and licensee business, which more than offset a greater relative contribution from high-margin consumer-direct business.
Cost of products sold jumped to $383.8 million from $190.6 million during the quarter.
Last October, Wolverine paid $1.25 billion to buyout Collective Brands’ performance and lifestyle group including Sperry Top-Sider, Saucing, Stride Rite and Kids.
Wolverine adjusted down slightly its full year sales forecast from its previous estimate for $2.7 billion to $2.8 billion to $2.7 billion to $2.78 billion with adjusted earnings per share of $2.50 to $2.65. Analysts’ average estimate expects $2.63 a share on sales of $2.72 billion.