The owner of Sperry, Saucony, Merrell and other shoe brands today posted better-than-expected earnings across the board — sending shares rising in early-morning trading.
As of 11 a.m. ET, the firm’s shares remained up 2.5 percent to $27.13.
Wolverine said its Q3 reported revenue declined 3.7 percent to $581.3 million, handily topping analysts’ bets for revenues of $552.4 million.
Reported profits declined 52 percent to $23.2 million, or 24 cents per diluted share. But on an adjusted basis, diluted earnings per share were 43 cents per share, surpassing forecasts for diluted EPS of 37 cents.
President, chairman and CEO Blake Krueger attributed the better-than-expected performance to the ongoing progress of the firm’s Way Forward plan — which focuses on adjusting the company’s portfolio as well as ramping up speed and innovation.
The strategic transformation — launched in 2016 — saw the firm sell the Sebago brand, license out Stride Rite brand to Vida Shoes International and most recently sell its Department of Defense contract business in September.
“We are very pleased to continue our positive momentum and report third quarter,” Krueger said. “We continue to make excellent progress on our enterprisewide strategic transformation, including the recently announced sale of our Department of Defense business. Our third-quarter results are reflective of this progress. This transformation is focused on elevating our most powerful brands with consumers, delivering continuous product innovation and sustained organic growth, and unlocking incremental operational efficiencies, all with an emphasis on pace and speed.”
By brand, the third quarter saw continued weakness at Sperry, with revenues down mid-single digits, Saucony up mid-single digits and Keds down high single digits. The core performance outdoor category grew mid-single digits, driven by Merrell’s Moab 2 and the Nature’s Gym collections. Chaco saw double-digit growth, fueled in part by e-commerce business, which grew over 40 percent.
Wolverine in Q3 also continued to realign its retail store fleet under the previously announced Store Restructuring Plan. The company has closed 188 stores since the beginning of 2017 and expects an additional 27 store closings before the end of fiscal 2017, leaving a remaining retail fleet of 80 stores.
Looking ahead, on the heels of stronger momentum, the firm narrowed its full-year outlook to the upper end of its prior range and now expects reported revenue of $2.34 billion to $2.37 billion. Reported diluted EPS are expected in the range of 76 cents to 81 cents per share. Adjusted diluted EPS are now expected in the range of $1.60 to $1.65, compared with $1.36 in fiscal 2016, adjusted on the same basis.