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Wolverine World Wide reports great start to 2011
Record revenue and earnings for the first quarter of 2011 at Wolverine World Wide reflect a “fantastic start” for the year, according to Blake W. Krueger, chairman and CEO.
The bottom line results were also matched by a healthy rise in the Rockford footwear manufacturer’s stock price in recent months.
Wolverine reported revenue for the first quarter of $330.9 million, an increase of 16.1 percent over the prior year. All three of the company’s branded operating groups contributed to the consolidated record result.
Fully diluted earnings were a record 72 cents per share, compared to 2010 adjusted fully diluted earnings of 56 cents per share, an increase of 28.6 percent. The prior year's adjusted earnings exclude the impact of restructuring charges and other expenses related to Wolverine's strategic restructuring plan completed in the second quarter last year. Reported fully diluted earnings for the first quarter 2010 were 54 cents per share.
Wolverine stock at the close April 19, when the first quarter results were announced, was more than $39, a record high. Last September it was less than $26 per share.
Wolverine attributed the brisk performance of the first quarter to strong consumer demand, and accelerated revenue growth. "We experienced strong consumer demand for our products across all geographic regions. Our Outdoor Group, especially the Merrell brand, and the Heritage Group both delivered impressive results during the quarter,” said Krueger.
Krueger said the new Merrell Barefoot product line introduced in February “has exceeded our expectations and is already one of the most successful product launches in the history of the company.”
Wolverine CFO Don Grimes said the company’s order backlog at the end of the quarter was slightly more than 30 percent compared to one year ago, which Krueger said was “a little bit higher than where we expected to be at this time.”
However, Krueger said material costs were being watched carefully at this time, as oil, rubber, cotton and other materials are “close to an all-time high. It’s a challenging environment.”
Gross margin for the quarter was 41.6 percent, slightly above the prior year's gross margin, adjusted for restructuring and related charges. Benefits from strategic price increases were offset by negative mix and increased product costs during the quarter. Reported gross margin for the first quarter 2010 was 41.3 percent.
Wolverine repurchased approximately 142,000 of its own shares in the quarter for an aggregate cost of $5.1 million. As announced earlier in the quarter, the company increased its quarterly dividend 9.1 percent to $0.12 per share.
For fiscal 2011, the company is increasing its revenue estimate to a range of $1.38 billion to $1.42 billion, representing growth of 10.5 to 13.7 percent over the prior year. The company’s estimates on its fully diluted earnings per share over 2011 has been increased to a range of $2.40 to $2.50, representing growth of 10 to 15 percent over the prior-year earnings.