After reporting fourth-quarter earnings last week, the firm told investors and analysts during a conference call that business should improve by fall.
“We’ve been encouraged by the order trends over the last four to five weeks of the current fiscal year,” CFO and SVP Donald Grimes said during the call last Wednesday. “So, our views on the second half aren’t based strictly on blind optimism, [they are] based on more recent patterns.”
Mitch Kummetz, an analyst at Robert W. Baird & Co., agreed that Wolverine’s orders appear strong. “They were one of these companies in 2008 that put up pretty good numbers,” he said. “Their business is performing better than most, and that gives them some confidence.”
Sam Poser, an analyst at Sterne, Agee & Leach, was more cautious. “We know the first half is going to be bad, but I don’t see what would make the second half look better,” Poser said, adding that the company’s forecast doesn’t take into consideration the possibility of cancellations or a slowdown in reorders.
For the quarter ended Jan. 3, the company reported a 6 percent decline in net income to $24.1 million, from $25.6 million a year ago. Earnings per diluted share were fl at at 49 cents, ahead of the 45 cents analysts were expecting.
Meanwhile, sales for the quarter fell 3 percent to $346.1 million from $357.4 million. For all of 2008, earnings inched up 3 percent to $95.8 million, or $1.90 a diluted share, from $92.9 million, or $1.70, in 2007.
Still, the firm expects profits to fall to 2007 levels or lower this year. It now expects 2009 net income of $1.50 to $1.70 a diluted share, excluding the impact of ongoing restructuring efforts. Sales are slated to range from down 5 percent to up 1.6 percent, coming in between $1.16 billion to $1.24 billion.
For his part, Wolverine President and CEO Blake Krueger said the company remains upbeat. “While 2009 will likely present some challenges, we like our competitive position and view the environment as an opportunity to emerge as an even stronger player,” he said.