Wolverine World Wide, Inc. Announces First Quarter Earnings Per Share Up 35.0% and Increases 2005 Estimates
Wolverine World Wide, Inc. today reported record revenue and earnings for its first quarter ended on March 26, 2005.
The Company achieved record revenue for the first quarter of 2005 totaling $245.2 million, a 9.0 percent increase over first quarter 2004 revenue of $224.9 million. Earnings per share during the first quarter of 2005 grew to $0.27 per share compared to $0.20 per share reported for the same quarter last year, an increase of 35.0 percent.
“This year is off to a record start as we achieved a strong double-digit earnings increase for the first quarter of 2005,” stated Timothy J. O'Donovan, the Company's President and CEO. “Building on the momentum generated by the Company's earnings performance in 2004, our first quarter results were driven by our strong global brands and product innovation resulting in accelerated consumer demand for the Company's products. Operating improvements occurred throughout the business with Europe contributing significantly to the revenue and earnings increase. Merrell, which continued to be our leading sales and profit driver, recorded double-digit revenue and earnings gains with the strongest increases coming from the U.S. business and the success of Merrell Continuum(TM).”
“Other areas of achievement included the global Sebago business which posted double-digit revenue and earnings gains. In the U.S., Wolverine Boots and Shoes experienced significant earnings improvement led by the performance of Wolverine MultiShox(TM). Increased focus on brand development benefited both the global Hush Puppies and CAT Footwear operations as these businesses reported strong revenue and double-digit profit improvements. “
“Record first quarter earnings were driven by significant gross margin expansion,” reported the Company's CFO, Stephen L. Gulis Jr. “Gross margin during the first quarter of 2005 grew to a record 39.3 percent, a 130 basis point improvement over first quarter 2004. This improvement resulted primarily from increased sales of higher margin lifestyle products and a positive impact from foreign currency.”
“Our inventory levels were up in the first quarter, with the increase coming exclusively from the Outdoor Group as it supported the Merrell Continuum(TM) initiative and Sebago's growth. During the quarter, we increased our investment in product development and marketing efforts while slightly reducing our expenses as a percent of revenue.”
O'Donovan concluded, “Looking ahead, our order backlog was up over 11 percent at the close of the first quarter of 2005 compared to the prior year. On the strength of the first quarter's results and continuing consumer demand for our global brands, we are increasing the Company's 2005 estimates. We expect revenue to range from $1.045 billion to $1.065 billion, up from our previous estimate of $1.040 to $1.060 billion, and expect earnings per share to range from $1.22 to $1.27, up from our previous estimate of $1.19 to $1.24. These estimates do not include any impact from the potential repatriation of foreign earnings under the American Jobs Creation Act of 2004.”
The Company will host a conference call at 10:00 a.m. ET today to discuss these results and current business trends. To listen to the call at the Company's website, go to http://www.wolverineworldwide.com , click on “Investors” in the navigation bar, and then click “Webcast” from the top navigation bar of the “Investors” page. To listen to the webcast, your computer must have Windows Media Player, which can be downloaded for free on the Wolverine World Wide website. In addition, the conference call can be heard at http://www.streetevents.com. A replay of the call will be available at the Company's website through May 4, 2005.
With a commitment to service and product excellence, Wolverine World Wide, Inc. is one of the world's leading marketers of branded casual, active lifestyle, work, outdoor sport and uniform footwear and slippers. The Company's portfolio of highly recognized brands includes: Bates(R), Hush Puppies(R), HYTEST(R), Merrell(R), Sebago(R) and Wolverine(R). The Company also markets footwear under popular licensed brands including CAT(R), Harley- Davidson(R) and Stanley(R). The Company's products are carried by leading retailers in the U.S. and globally in over 140 countries. For additional information, please visit our website, http://www.wolverineworldwide.com .