Analysts Upbeat on Wolverine Results

NEW YORK — Wolverine World Wide Inc. is poised for a bright back half.

Analysts polled by Footwear News said that after the Rockford, Mich.-based firm doubled its second-quarter earnings, the company has serious momentum heading into the third quarter.

“Backlogs are up more than 38 percent, including double-digit increases across all its business groups,” said Mitch Kummetz, analyst at R.W. Baird. “They’re getting orders earlier, which is a good indication that sales will be very good going forward, as well.”

Analysts also said the firm is positioned to keep performing well because its product lines are hitting several key fashion trends.

“Wolverine is benefiting from the same trends that other footwear manufacturers are benefiting from,” said Jeff Van Sinderen, analyst at B. Riley & Co. “Boots have been really strong, and this carries over into outdoor too, especially in the men’s business.”

“They have a lot of new product starting to resonate with consumers, and a lot of trends going forward are going to play into their hands, such as the vintage Americana and the rugged, work-inspired boots,” added Sterne Agee analyst Sam Poser.

While the industry-wide impact of rising manufacturing costs will continue to put pressure on margins — a “mid-single-digit hit” in Wolverine’s case, said Van Sinderen — analysts believe that will be more than offset by the positive sales growth across Wolverine’s portfolio of brands.

In a conference call Thursday morning, Wolverine CEO Blake Krueger said Merrell Outventure, the firm’s outdoor performance division, continued “to generate excellent growth and solidified the brand’s position as the leader [in] the performance outdoor segment.”

Kummetz said he expects Merrell’s sales to be up in the double-digit range for the next half of the year.

Wolverine reported second-quarter income of $17.2 million, or 39 cents a share, up from $7.9 million, or 16 cents, in the same quarter last year.

Revenue for the period ended June 19 was $258.2 million, up 5 percent from $246.4 million a year ago. Cash and cash equivalents stood at $110.1 million, up 40 percent from the previous corresponding quarter.

“Our retail and e-commerce businesses also delivered impressive results. The company’s exceptional year-to-date earnings performance is a clear testament to the power of our global business model,” said Krueger.

Van Sinderen said Wolverine’s strong performance bodes well for the rest of the industry.

“The takeaway from this is that generally you’ll see footwear companies report pretty strong numbers this period,” he said.

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