Wolverine Has Record Quarter
Earnings per share increased to 23 cents for the quarter, up 2 cents per share from the prior year.
Earnings per share for the first six months of the year also reached record levels of $375.5 million and 41 cents per share, respectively. That compares with $346.6 million in revenue and 36 cents earnings per share for the first half of 2002.
The Merrell business achieved its 22nd consecutive quarter of growth with a mid-teens sales increase.
Merrell’s sales gains for the first half were running ahead of the company’s 15 percent growth plan for 2003, said President and CEO Timothy O’Donovan. The brand saw double- digit sales increases in the United States, United Kingdom, Canada, Europe and other international markets.
Sales of Merrell in Europe actually doubled in the first six months of the year, he said.
“Merrell had an outstanding response at the recently completed ISPO sporting goods trade show in Munich. During the show, Merrell opened 48 new accounts in Germany and Austria alone.”
The brand has a strong fall lineup, O’Donovan said, and while delivery of fall products is just beginning, initial selling reports are strong.
The company plans to expand the Merrell line to include socks, with initial deliveries scheduled for the fourth quarter of this year. That will be followed by a backpack and luggage launch in the second quarter of next year.
“These new line extensions are one more step in building a stronger connection with the growing number of Merrell enthusiasts around the world,” O’Donovan said.
While Merrell continues to be the major growth driver, Wolverine’s other major brand business groups — Hush Puppies, Caterpillar Footwear and the Wolverine Footwear — reported sales and profit increases in the first six months, as well.
After a strong first quarter, Hush Puppies global sales were down slightly in the just ended quarter, a decrease O’Donovan attributed to lower reorders in the United States, as well as reduced sales to off-price retailers. A new fall product from the Hush Puppies Crush collection was recently delivered and initial sales are strong, he said.
Double-digit sales gains for the Harley Davidson, Bates and Stanley brands more than offset lower sales of Wolverine boots. Shipments of Wolverine boots were up in the quarter but average prices were lower, a trend O’Donovan said the company has seen for the past several quarters.
Harley Davidson continues to build business through its dealer network and is expanding distribution to department, show and specialty boot stores. O’Donovan noted that “200 new doors were opened” in the first half of the year.
The company’s Bates Uniform footwear business is having a record year. In addition to introducing a new line of technical, ultra-light footwear for the civilian uniform market, Bates has expanded its franchise in the military market with introduction of what O’Donovan referred to as “technically superior” foot products.
Caterpillar footwear sales were up more than 10 percent. The European CAT distribution business Wolverine acquired 18 months ago had a particularly good quarter, with sales driven by strong performances in the United Kingdom and French markets, he added.
“We’ve had our challenges with the Caterpillar footwear businesses as work-inspired lifestyle boots took a back seat with some young consumers to retro-athletic and lower profile active casuals,” O’Donovan observed.
“While we’re not predicting a sudden reversal of these fashion trends, we do see renewed interest from fashion-forward accounts in both Europe and the U.S. for the classic CAT product, as well as the CAT work-inspired active casual product.”Wolverine World Wide’s sales goal is for 2003 is $875 million to $885 million, and its earnings-per-share goal is $1.21 to $1.24.