Wolverine Worldwide Exceeds Expectations
Company Reaffirms Full-Year Adjusted Earnings Per Share Guidance.
«The global demand for our family of brands remains strong and I am pleased to report that our top-line growth accelerated in the quarter and exceeded our internal expectations,» commentedBlake W. Krueger, Wolverine Worldwide’s Chairman, Chief Executive Officer and President. «As we move into the second half of the year, we remain intensely focused on our consumers and further investing in our key strategic initiatives – specifically our global brand-building efforts, omnichannel transformation and the continued expansion of our portfolio’s international footprint.»
Consolidated revenue increased to a record$630.1 million, representing growth of 2.7% versus the prior year and 4.9% on a constant currency basis. Adjusting for the impact of foreign exchange, retail store closures and termination of the Patagonia license agreement, adjusted revenue grew 6.9% versus the prior year.
Gross margin was 39.1%, a decrease of 100 basis points versus the prior year’s gross margin, in line with Company expectations. Adjusted operating margin decreased 90 basis points versus the prior year to 8.1%, due primarily to higher pension expense and planned incremental brand investment. Reported operating margin declined 40 basis points versus the prior year to 7.6%. Adjusted diluted earnings per share were$0.27, compared to an adjusted$0.31per share in the prior year, and well ahead of Company expectations for the quarter. Reported diluted earnings per share were$0.24, compared to$0.27per share in the prior year.
«The strong performance in the quarter was highlighted by mid-single digit revenue growth in our U.S. wholesale business, double-digit growth in EMEA and growth exceeding 50% in theAsia Pacificregion, each on a constant currency basis,» commentedMike Stornant, Senior Vice President and Chief Financial Officer. «Revenue for the quarter also benefited from higher than anticipated international shipments that were initially expected to deliver in Q3 2015. Operating margin was also positive relative to our projections heading into the quarter, aided by strong discipline around discretionary spending to protect our key brand investment initiatives. The Company’s global diversity and reliable fiscal discipline helped deliver another very good financial performance in Q2 2015.»
The Company now expects to incur total pre-tax charges of approximately$48 million to $51 millionrelated to the previously announced Strategic Realignment Plan, exit of the Cushe business and debt extinguishment costs from the debt refinancing.
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®, Hush Puppies®, Saucony®, Wolverine®, Keds®, Stride Rite®, Sebago®, Cushe®, Chaco®, Bates®, and HYTEST®. The Company also is the global footwear licensee of the popular brands Cat® and Harley-Davidson®. The Company’s products are carried by leading retailers in the U.S. and globally in approximately 200 countries and territories.