After a wave of aggressive restructuring, Wolverine World Wide Inc. is back in growth mode.
The parent company of Sperry, Merrell, Saucony and other popular shoe brands, today reported first-quarter results that blew past Wall Street’s forecasts, sending its shares soaring in early-morning trading. The company also improved its outlook for the fiscal year.
As of 11:30 a.m. ET, shares remained up nearly 8 percent at $32.12.
Wolverine, which over the past year sold the Sebago brand, licensed out Stride Rite and dropped its Department of Defense footwear business, said its Q1 sales rose nearly 10 percent to $534 million, surpassing analysts’ bets for sales of $531 million.
Helped by Sperry’s rebound and continued growth at Merrell, overall profits more than doubled year over year to $46.7 million, or 48 cents per diluted share. On an adjusted basis, earnings per diluted share were 50 cents, significantly higher than Wall Street’s forecast for diluted EPS of 37 cents.
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President, chairman and CEO Blake Krueger said the firm is in the process of implementing investments as well as activating “critical” initiatives as part of its Global Growth Agenda, the next phase of its transformation.
“The recent restructuring and related operational activities are substantially complete, and we are now utilizing the new tools and capabilities that were developed as part of this work to focus on growth,” Krueger added.
During the first quarter, Merrell, Sperry and international business exceeded revenue expectations, while owned e-commerce business delivered mid-20s underlying growth, Wolverine’s chief added.
Merrell rose low single digits but was flat on a constant-currency basis, and Chaco posted low-single-digit growth. Notably the struggling Sperry business turned positive this quarter, delivering close to 1 percent growth. Keds was up mid-single digits and Saucony fell mid-single digits.
On the heels of the better-than-expected results, Wolverine raised its earnings projection for the year. The company now expects reported diluted EPS in the range of $1.92 to $2.02 and adjusted diluted earnings per share of $2.00 to $2.10. It had previously called for reported diluted EPS in the range of $1.87 to $1.97 and adjusted diluted EPS in the $1.95 to $2.05 range.
