Wolverine Posts Record 3Q Sales

October 16, 2002
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ROCKFORD — Wolverine World Wide Inc. reported record third quarter net sales of $219.2 million, up nearly 18 percent from net sales of  $186.2 million reported for the third quarter of 2001.

Net earnings for the quarter rose to $15.3 million, or 37 cents per share, compared to $14.4 million, or 34 cents per share for the same period the year before.

Year-to-date net sales and other operating income increased 14 percent to a record $565.8 million.

Net earnings for the first nine months reached a record $30.8 million, or 73 cents per share, compared to $29.2 million, or 69 cents per share, for 2001’s third quarter.

Timothy O’Donovan, president and CEO, said the company’s European Merrell and CAT Footwear acquisitions accounted for about 70 percent of the company’s sales increase during the quarter.

Merrell led the way with a sales increase of more than 20 percent.

The brand’s sales increases were strongest in the United States but also were significant in Canada and the U.K., O’Donovan pointed out.

Merrell has gained market share and has become a significant brand for Wolverine’s retail partners.

“We’re not only receiving larger future orders, but also receiving them earlier in the booking season,” he said. “As a result, we have significant buys in place for the spring ’03 season from a number of our major accounts.”

He said integration of the European Merrell and CAT Footwear operations is moving forward rapidly. New logistics, warehousing and distribution support for those businesses was established during the just passed quarter.

The moves, O’Donovan said, will improve customer service and represent an important step in establishing a central services operating structure for Europe.

Retail partners also are enthusiastic about Merrell’s Shop-In-Shop program, a strategy that distinguishes the Merrell brand by dedicating display space in footwear stores exclusively to the brand. All display fixtures are supplied by the brand, so it has the right brand look, feel and imagery.

The company has had requests from its retail partners for approximately 60 Shop-In-Shop locations. The first of them will be introduced this year, with the bulk of the rollout scheduled for 2003.

“With the continued growth in the Merrell business we announce today that we are establishing Merrell as a stand-alone entity within the company on a par with our Wolverine Footwear group, Hushpuppies Co. and Caterpillar Footwear Co.,” O’Donovan said.

“This move recognizes Merrell’s success to date, but more importantly, puts in place the organizational structure and resources necessary for this business to reach its full potential.”

While Merrell was a significant growth driver in the third quarter, the company also saw double-digit sales increases in its U.S. Hushpuppy and CAT footwear businesses.

Wolverine enters the fourth quarter with a 23.5 percent year-over-year gain in footwear order backlogs, O’Donovan noted. The order increase for 2003 delivery is $20 million more than a year ago.

O’Donovan expects sales for the year will total $820 million to $830 million.

The company is targeting an earnings range of $875 million to $885 million for 2003.           

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