WWW Sets Two Quarterly Records

October 14, 2004
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ROCKFORD — Wolverine World Wide Inc. reported record third quarter revenue and earnings, marking its 11th consecutive quarter of growth.

Revenue for the just-passed quarter totaled $260.9 million, up 13.2 percent over 2003 third quarter revenue of $230.6 million.

Earnings per share for the quarter jumped 37.5 percent to 55 cents, compared with 40 cents for the year-ago quarter.

“Our earnings this quarter were the highest quarterly earnings in the company’s 120-year history,” President and CEO Timothy O’Donovan pointed out.

For the first nine months of this year, revenue increased to $684.5 million, a nearly 13 percent increase over the $606.1 million in revenue posted for the first nine months of 2003. Earnings for the first nine months were $1.12 per share, a 38.3 percent increase over the 81 cents per share reported for the same period last year.

O’Donovan said that Wolverine’s Outdoor Group — namely the Merrell and Sebago brands — drove performance, but that all the company’s businesses generated earnings gains.

“The results to date are running well ahead of our original plan for this year, and we’re very encouraged by the strong response of consumers around the world to our brand of product offerings,” he said.

Merrell’s global sales were up nearly 19 percent, with gains in every region. Revenues from Europe and international distributors were particularly strong, he said. U.S. and Canada sales were also up double digits.

The integration of the Sebago brand is generally going well and the company now has a sourcing and logistics platform in place, O’Donovan said.

“The reception to the completely redesigned Sebago spring 2005 product line has been very encouraging,” he noted. “We’re experiencing renewed interest from both existing Sebago customers, as well as new customers.”

The investments the company has made over the past several years to develop its capabilities in Europe and elsewhere in the world are “yielding solid results,” he added.

Although profits for the global Hush Puppy business improved in the quarter, revenue was down 2.9 percent, in part due to lower U.S. wholesale revenues. The brand’s U.K. business was strong, and the Canadian and international licensing businesses also reported sales and profit increases. O’Donovan said the brand’s order backlog for spring 2005 is up in the United States and all other geographic markets.

Wolverine footwear group realized an 11 percent revenue increase in the quarter, principally due to a large increase in the Bass uniform footwear business and accelerated demand for U.S. military footwear. Wolverine boot revenues were up slightly.

“The key to the strategy of owning the high ground in the boot category is innovative product, which is Wolverine’s new MultiShocks patent-pending boot construction,” O’Donovan said.

Revenues for the Harley Davidson business were up modestly in the quarter. Caterpillar (CAT) footwear revenue was up 9.3 percent in the quarter, with double-digit increases in the United States, a triple-digit increase in international distributor business, and a single-digit increase in Europe, O’Donovan reported.

He announced that Wolverine has increased its initial estimates for 2005 revenue to range from $1.035 billion to $1.055 billion, and for earnings per share to range from $1.77 to $1.84.

Also last week, Wolverine’s board of directors announced it has authorized repurchase of 2 million shares of common stock, the fourth 2-million-share buyback it has authorized since October 2000. Share repurchases will be made over a two-year period.

O’Donovan said the company’s active stock buyback program “underscores the strong confidence we have” in Wolverine’s portfolio of brands. 

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