Wolverine Has Record Third Quarter Sales

June 20, 2002
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ROCKFORD —  Wolverine World Wide reported record sales and profits for the third quarter ended Sept. 8 and for the first three quarters of 2001.

“Although the aftermath of the Sept. 11 tragedy has tempered everyone’s short-term outlook, we remain optimistic about the fundamental strengths of the U.S. economy and the opportunities for our portfolio brands,” said President and CEO Timothy O’Donovan.

He noted that following the attacks on New York and Washington, D.C., Wolverine assembled a shipment of more than 2,000 pairs of specialty steel-toed boots and had them delivered to the New York City Fire Department within a few days. The American Red Cross later requested more.

“The boots we originally shipped proved to be the best performing boots in the very demanding rescue and recovery environment. The fact that rescue workers are asking for our boots is a great source of pride for our employees,” he said.

Net sales and other operating income rose 6 percent to $186.2 million in the third quarter compared to $175.5 million for the same quarter last year. Third quarter net earnings improved 23 percent to $14.4 million, or 34 cents per share, versus $11.7 million, or 28 cents per share, for the same period the year before. Excluding realignment charges of year 2000, gross margins improved for the third consecutive quarter.

Year-to-date, sales and other operating income totaled $496 million, a 7 percent increase over the first three quarters of 2000. Net earnings for the nine-month period grew 21.5 percent to $29.2 million, or 69 cents per share, compared to $24 million, or 58 cents per share, for the first nine months of 2000.

O’Donovan said the company’s 6 percent sales gain in the third quarter was driven primarily by continued strong momentum in its Merrell brand business and double-digit sales increases by the Wolverine Boot and Harley-Davidson footwear divisions.

Wolverine experienced softer sales in its U.S. Hushpuppies and U.S. Caterpillar and leather divisions during the third quarter.

O’Donovan said the quarter’s earnings improvement were the result of three factors: a shift in sales mix to higher market Merrell and Harley Davidson products; much improved sales in the Wolverine Boot division; and generally improved pricing margins across most areas of the company’s business.

Third quarter inventories of $185.5 million were up 6 percent over last year’s third quarter. All of the inventory increase was to support the Merrell business, O’Donovan added.

Wolverine ended the quarter with a 13 percent increase in order backlog, but due to the uncertainty among consumers and retailers worldwide, the company anticipates lower than normal fourth quarter reorders, O’Donovan said. Fourth quarter sales are expected to be “flat to slightly down.” Despite that, he said the company will likely set a new sales and earnings record in 2001.

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