US: Wolverine Worldwide cuts outlook as Q3 profit falls
- Q3 profit declined 19% to $32.8m
- Gross margin fell 140 basis points to 39.2%
- Revenue slipped 2.4% to $353.1m
Footwear maker Wolverine Worldwide has lowered its full-year earnings target after posting a 19% drop in third-quarter net profit amid challenging economic trading conditions in Europe.
Net earnings for the 12 weeks ended 8 September slumped to US$32.8m, compared to $40.4m the same period last year. Operating profit declined 17.9% to $46.3m.
Gross margin fell 140 basis points to 39.2% with higher product costs partially offset by increased selling prices and foreign exchange contract gains. Foreign exchange negatively impacted revenue by $5.4m, pushing it down 2.4% to $353.1m.
However, the company said it saw double-digit increases across its US footwear brands, including Hush Puppies, Caterpillar Footwear and Sebago.
"In light of the continued macroeconomic challenges in Europe, we are pleased that the company's core business, even without contributions from the just-acquired Sperry Top-Sider, Stride Rite, Saucony and Keds brands, is on track to deliver another year of record revenue," said Blake Krueger, chairman and CEO.
"Importantly, many of our brands posted strong revenue growth during the quarter, despite the headwinds in Europe."
Wolverine Worldwide now expects full-year revenue to range between $1.43bn and $1.44bn, compared to earlier guidance of $1.46bn to $1.50bn. The company expects continued European macroeconomic turmoil to present challenges.
Excluding the impact of the Performance + Lifestyle Group acquisition, the company forecasts fully-diluted earnings to range from $2.26 to $2.31 per share.
Wolverine last week closed the deal to purchase US footwear company Collective Brands with private equity firms Golden Gate Capital and Blum Capital for US$2bn.
It will see Wolverine Worldwide acquire Collective Brands' Performance + Lifestyle Group, which includes the wholesale and retail operations of the Sperry Top-Sider, Sacuony, Stride Rite and Keds brands.
Footwear maker Wolverine Worldwide has swung to a fourth-quarter loss on the back of costs related to its acquisition of Collective Brands' Performance & Lifestyle Group last year....
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