For more reasons than one, Wolverine World Wide Inc. is upbeat on tax reform.
The parent company of Merrell, Saucony, Sperry and other shoe brands this week released an early read of its 2018 guidance, including an expectation of a reduction in cash taxes of $18 million to $20 million. In addition — joining other heavy-hitting firms, such as Apple and Bank of America that plan to bring millions of dollars back home — Wolverine now expects to repatriate approximately $300 million of cash currently held in non-U.S. subsidiaries, thanks to the new law. The company noted that it will now have the ability to repatriate future overseas cash balances with minimal U.S. tax cost.
Regarding its 2018 outlook, Wolverine predicts revenues in the range of $2.24 billion to $2.32 billion, a reported decline of 1.3 percent with underlying growth of close to 6 percent at the high end of the range. Reported diluted earnings per share are expected in the range of $1.87 to $1.97. Adjusted diluted earnings per share are predicted between $1.95 and $2.05.
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“The company has been keenly focused on operational excellence, improving our brand platforms and portfolio management over the past two years,” said chairman, president and CEO Blake Krueger of the firm’s recent efforts, including licensing out the Stride Rite brand and divesting Sebago. “We are in the last innings of completing our work, and we expect this important effort will allow us to achieve our operating margin target ahead of schedule while creating the financial capacity to invest in key growth initiatives.”
Wolverine also reported preliminary revenue for fiscal 2017 of $2.35 billion, at the top end of its full-year outlook entering the year. It expects fiscal 2017 adjusted diluted EPS at the high end of its previous earnings outlook of $1.60 to $1.65.
“As we look ahead, we will focus on acting with speed and urgency to build craveable brands, expanding our product innovation pipeline and delivering accelerated growth in both our direct-to-consumer and international businesses,” Krueger said.
Wolverine will report Q4 2017 results on Feb. 21.
