US: Wolverine Q1 net earnings fall to $10.5m
Footwear group Wolverine World Wide has posted first quarter net earnings of US$10.5m, compared to $23.7m in the prior year period, including $14.5m of non-recurring restructuring and related charges.
On a reported basis, the company had revenue of $255.3m in the quarter, a decrease of 11.4% versus the prior year.
The substantial strengthening of the US dollar contributed more than half of the revenue decline, it said. Also, the company continues to rapidly implement a strategic restructuring plan announced in January.
Operating expenses in the quarter were $87.5m, and including restructuring and related charges were 34.3% of reported revenue. Reported gross margin in the quarter was 40.3%.
Inventory at the end of the first quarter was up 15.6% compared to the prior year, and 11.8% on a unit volume basis, driven primarily by year-over-year product cost increases on most brands in the portfolio
"Revenue was above our internal plan for the quarter and helped contribute to an excellent earnings result in a difficult and volatile macroeconomic environment," said Blake W Krueger, the company's CEO and president. "Our global operating platform is strong, serving different consumer groups and distribution channels across 180 countries and territories.
"This business model helps mitigate our exposure to any single market, fashion or consumer trend and allows our brands to successfully compete for market share in a tough consumer climate.
"Many of our brands gained market share during the quarter, with the Wolverine and Caterpillar footwear businesses in the US and several of our international operations delivering revenue growth."
The company, whose portfolio of brands includes Hush Puppies and Merrell, reaffirmed 2009 revenue and earnings guidance of reported revenue expected in the range of $1.070bn to $1.150bn and reported fully diluted earnings per share in the range of $1.04 to $1.24.
The earnings estimate reflected a full-year negative impact of $0.12 to $0.15 per share from foreign currency and $0.12 per share of increased pension expense.
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