World Footwear


Wolverine posts strong results

Feb 22, 2019 United States
Wolverine posts strong results
Accelerated revenue growth in the fourth quarter led by Merrell and Sperry results in strong finish to a record-earnings year
“Our Global Growth Agenda gained momentum in the fourth quarter, with underlying revenue growing by 4.6% on a constant currency basis. This was the highest quarterly revenue growth of the year driven by our two largest brands Merrell and Sperry”, commented Blake Krueger, Wolverine World Wide’s Chairman, Chief Executive Officer and President, adding: “For the full-year, we achieved attractive underlying revenue growth and our efficient business model allowed us to deliver significant profit leverage including record gross margin and earnings. Looking forward into 2019, we expect to build on this momentum and continue to invest in a variety of initiatives to drive revenue growth and continued earnings leverage."

"We had an excellent finish to the year, including better-than-expected earnings on revenue growth that was in line with our expectations. For the full year, we achieved a 12.0% adjusted operating margin, which exceeded our initial stated goal," stated Mike Stornant, Senior Vice President and Chief Financial Officer. "We saw solid underlying revenue growth across our portfolio including several of our largest brands. We also deployed our capital during 2018 in an efficient manner by returning 204 million US dollars to shareholders in the form of share repurchases and dividends, reducing debt by 212 million US dollars, and making 60 million US dollars of discretionary contributions to bring our defined benefit pension plans to essentially fully-funded status. As we look forward into 2019, we remain committed to our strategy of investing in organic growth, making strategic acquisitions and continuing to focus on deploying capital to enhance shareholder value, including a new four-year Board authorization to repurchase up to 400 million US dollars of common shares and a 25% increase in our quarterly dividend."

Fourth Quarter Review

Reported revenue of 579.6 million US dollars increased by 0.2% during the fourth quarter. Underlying revenue increased by 3.8% and further adjusting for currency, increased by 4.6%. Reported diluted earnings per share was 0.40 US dollars, compared to a loss per share of 0.65 US dollars in the prior year. Adjusted diluted earnings per share was 0.52 US dollars compared to 0.41 US dollars in the prior year, an increase of 27%.

Full Year Review

Reported revenue of 2 239.2 million US dollars decreased by 4.7% for the full year. Underlying revenue increased 2.5% and further adjusting for currency, increased 2.3%. Wolverine invested 50 million US dollars in growth initiatives for the year, including approximately 41 million US dollars included in operating expenses and approximately 9 million US dollars of growth-related capital spending.

2019 Outlook

Revenue is expected to be in the range of 2.28 to 2.33 billion US dollars, representing growth of 3.0% at the mid-point of the range. Reported diluted earnings per share are expected to be between 2.03 US dollars to 2.18 US dollars and adjusted diluted earnings per share are expected to be between 2.20 US dollars to 2.35 US dollars.

Photo by rawpixel on Unsplash

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