The parent company of Merrell, Sperry, Saucony and other popular shoe brands said its reported net income for the fourth quarter, ended Jan. 2, 2016, totaled $11.6 million, or 12 cents per diluted share, an 8.4 percent decline from the same year-ago quarter. Adjusted diluted EPS were 33 cents per share, or 40 cents per share on a constant-currency basis, which beat analysts’ estimates for EPS of 28 cents.
Reported Q4 revenue came in at $751.2 million, a 7 percent decline year-over-year but roughly in-line with Wall Street’s forecasts for revenue of $751.4 million.
“Our ability to deliver strong earnings in a challenging global retail and consumer environment continues to validate the power of our diversified brand portfolio and disciplined operational execution,” Wolverine Chairman, CEO and President Blake Krueger said in a release. “Looking back on the full year, we made significant progress against our strategic priorities, including investing in global organic growth for our key brands and ecommerce.”
For the full year, the company posted reported revenue of $2.69 billion, a 2.5 percent decline versus the prior year. Total reported net income for 2015, slid 7.7 percent to $122.8 million.
During the Q4 conference call, Krueger the company’s full-year financial performance “did not live up to our original expectations” but pointed to the firm’s progress as it relates to key brands.
“Over the past 12 months, we better positioned Merrell, Sperry, and Saucony — our three largest brands — for further growth expansion as leading head-to-toe lifestyle brands,” Krueger said. “We further expanded our international footprint — already one of the best in the industry — by executing 121 distribution agreements in 2015.”
Following the earnings release, Wolverine’s share price descended into the red as investors displayed disappointment in the firm’s 2016 outlook.
In 2016, the company expects consolidated reported revenue in the range of $2.475 billion to $2.575 billion, representing a decline in the range of 4.3 percent to 0.5 percent. Reported revenue is expected to decline in the range of 8 percent to 4.3 percent. Adjusted diluted EPS are forecast to be in the range of $1.30 to $1.40; constant-currency adjusted EPS is predicted to be in the range of $1.48 to $1.58; and reported diluted EPS is expected in the range of $1.20 to $1.30.
Michael Stornant, Wolverine’s CFO and SVP, said the firm was taking a more “cautious position” regarding its 2016 guidance due to higher than normal inventory levels; currency headwinds; financial instability for some of its domestic retailers and global customers; ongoing softness in global demand; a slowdown in China’s economy; and “strong trends in e-commerce growth putting pressure on traditional brick and mortar retailers.”
In addition to his plans to invest further in technology, innovation and consumer research, CEO Krueger also noted that he will continue to close Stride Rite stores in an effort to right size the business.