Wolverine World Wide, Inc. (NYSE: WWW) today reported record revenue and earnings for its second quarter of 2004, making this the tenth consecutive quarter of both record revenue and record net earnings for the Company.
Second quarter 2004 revenue totaled $198.8 million, an 8.0 percent increase over second quarter 2003 revenue of $184.0 million. Earnings per share for the second quarter of 2004 were $0.27 compared to the $0.23 reported for the second quarter of 2003, an increase of 17.4 percent.
For the first half of 2004, revenue reached $423.6 million, a 12.8 percent gain over the $375.5 million reported for the first half of 2003. Net earnings for the first half of 2004 grew to $23.3 million ($0.57 per share), up 39.5 percent from $16.7 million ($0.41 per share) for the same period of 2003.
“Our strong performance in the second quarter of 2004 was led by the Outdoor Group, with Merrell remaining the top performer in our portfolio of brands,” stated Timothy J. O'Donovan, the Company's President and CEO. “In addition, profit improvements were generated in the global Hush Puppies business, Wolverine Footwear Group and our slipper, leather and retail operations.
“We are very pleased with the first half of 2004 and the double-digit revenue increase driven by strong consumer response to our global brands and innovative product offerings. Our year-to-date net earnings increase of 39.5 percent reflects the diversity of our brand portfolio and the efficiency of our business model. We believe the Company is uniquely positioned for continued growth and is making progress toward its goal of becoming the world's premier non-athletic footwear company.”
Stephen L. Gulis Jr., the Company's CFO, reported, “During the second quarter of 2004, the Company continued to realize significant gross margin improvement. Gross margin grew to 38.0 percent, a 230 basis point improvement over the second quarter of 2003. This improvement resulted primarily from a higher margin business mix, an increase in average selling prices and lower product costs in our European operations. All operating groups equaled or exceeded 2003 margin levels in the quarter.
“Selling and administrative expenses as a percentage of revenue for the second quarter of 2004 were 29.3 percent. The Company continued to increase its investment in marketing and product development initiatives to support and strengthen the global positioning of our brands.
“Our focus on working capital management and improved operating results further strengthened the Company's balance sheet in the quarter. Accounts receivable were reduced by 7.5 percent and inventory increased 1.0 percent on a year-to-date sales increase of 12.8 percent. These results allowed the Company to achieve a cash balance in excess of $63 million at quarter-end.”
O'Donovan concluded, “We ended the second quarter of 2004 with our order backlog up approximately 17 percent, which reflects continued strong retailer demand across our product offerings. We expect this backlog to assist us in reaching our previously stated 2004 annual estimates of revenue ranging from $960-$980 million and earnings per share ranging from $1.44-$1.52 per share.”