Wolverine Q3 Profit Boosted by International Sales

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Rockford, MI— With demand increasing for Hush Puppies, Segabo, Merrell and other footwear brands here and abroad, Wolverine Worldwide Inc. reported today its third quarter income beat estimates again as the company raised it full year forecast.

For the quarter ended Sept. 10, Wolverine posted a more than 18% increase in net income to $40.4 million, or 82 cents per share, up from $34.1 million, or 70 cents per share, a year earlier.

Revenue climbed 13% to $361.6 million from $320.4 million, benefiting from strong performances from its outdoor segment, lifestyle unit and consumer direct business.

The results beat analysts’ average forecast for earnings of 72 cents a share on sales of $357.6 million and marked the seventh quarter in a row that Wolverine beat analysts’ forecasts.

‘Strong Global Demand’

The report included several other records for the company including: gross margin expanded 44 basis points to 40.6%; operating income rose 17.8% and operating margin expanded to a record 15.6%.

By division, the company’s outdoor group (consisting of Merrell footwear and apparel, Chaco and Patagonia footwear) had a 19.9% increase in sales; the lifestyle group (Hush Puppies, Sebago, Cushe and Soft Style) posted a 21.6% revenue growth;  the heritage group (Wolverine footwear and apparel, Caterpillar footwear, Bates, HyTest and Harley-Davidson footwear) posted a 6.8% increase during the quarter. Foreign exchange contributed $8.3 million to reported revenue in the quarter.

“Strong global demand for our lifestyle brands, the consistent execution of our growth initiatives and the strength of our operating model drove another outstanding quarter for Wolverine Worldwide,” said Blake W. Krueger, chairman and ceo. “Underscoring the global appeal of our brand portfolio, we generated unit volume growth of over 25% in each of the Latin America, Europe/Middle East/Africa and Asia Pacific regions during the quarter.”

The strong quarterly results show, some analysts said, that while consumers are more conscious spending especially in the face of current economic uncertainty, they remain loyal to brands they like.

Based upon the quarterly results and the company’s distribution in some 190 countries, Wolverine, raised its full-year earnings forecast to $2.46 to $2.52 a share on revenue of $1.4 billion to $1.43 billion. Previously, the company had full year earnings of $2.40 to $2.50 a share on revenue of $1.38 billion to $1.42 billion.

Analysts’ average forecast expects the company to earn $2.49 per share on revenue of $1.42 billion for the year.



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