US: Wolverine Worldwide swings to Q4 loss on acquisition costs
- Company swings to Q4 loss of $3.5m
- Revenue jumped 60.5% to $652.2m
- Gross margin fell slightly to 36.7%
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.
The company, which owns the Hush Puppies and Caterpillar footwear brands, said its net loss reached US$3.5m for the quarter to 29 December, compared to a $23m profit the same period the prior year.
Wolverine Worldwide completed the $1.25bn acquisition of the Performance & Lifestyle Group (PLG) in October, adding the Sperry Top-Sider, Saucony, Stride Rite and Keds brands to its portfolio.
Excluding non-recurring transaction and integration expenses, earnings per share were $0.48 compared to the company's previous guidance of $0.12-$0.22 per share. The increase was due to better-than-expected operating performance from both the legacy and PLG businesses and lower-than-anticipated costs related to the acquisition.
Revenue surged 60.5% to $652.2m from $406.5m the year before. Gross margin fell slightly to 36.7% against 36.9% the previous year.
"Fiscal 2012 was a milestone year - the third consecutive year of record revenue and the completion of the transformational acquisition of the four PLG brands," said CEO and chairman Blake Krueger.
"With continued successful execution of global growth initiatives and expansion of our direct-to-consumer platform, we delivered solid performance in a challenging global environment.
"The US market proved to be an important contributor to our consolidated performance in 2012, with many brands growing at a double-digit pace in the company's most significant market, helping offset the year-long headwinds in Europe and, to a lesser extent, Canada.
For the full-year, net income slumped 34.5% to $80.8m from $123.3m the prior year. However, revenue increased 16.4% to $1.64bn, compared to $1.41bn the year before. The sales growth was helped by a $219.4m contribution from the PLG brands.
Looking forward, Wolverine Worldwide said although it expects a strong performance in the US, Latin America and Asia Pacific in fiscal 2013, it forecasts challenging trading conditions in Europe.
Full-year diluted earnings per share are expected to range from $2.10 to $2.25, while revenue is set to be between $2.7-$2.8bn.
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