Sperry & Saucony Owner Scores Better-Than-Expected Revenues in Final Quarter of 2016

Shares for Wolverine World Wide Inc. are getting a nudge today after the firm reported better-than-expected fourth-quarter results.

As of 11:30 a.m., the company’s shares were up nearly 3 percent, to $24.72.

The owner of Sperry, Merrell, Saucony and other shoe brands reported Q4 revenue of $730 million, a 3 percent drop from the comparable period, but well above Wall Street’s bet for revenues of $716 million.

Wolverine posted a net loss of $7.9 million, or 2 cents per diluted share during the quarter. Adjusted earnings per diluted share, at 33 cents, were two pennies above analysts’ estimates. (Constant-currency diluted EPS were 36 cents.)

Our diversified business model and strong focus on the fundamentals of the business served us well throughout the year,” said Wolverine chairman, president and CEO Blake Krueger during the firm’s conference call. “In 2016, we more than doubled our investment in consumer insights, intensified the organization’s focus on product innovation and further optimized our product development process and supply chain for increased speed and efficiency. We invested in our biggest brands and began to streamline our portfolio to focus on global opportunities with the highest potential for profitable growth, including our fast-growing, highly profitable e-commerce business.

Among the brand highlights in Q4, Krueger said Sperry drove solid growth in the quarter, “fueled by the exceptional performance of its boot program,” with both Sperry.com and the brand’s international business up more than 20 percent.

“Sperry continues to make good progress on its strategic direction overall, building a more relevant brand and a diversified product offering in a more global distribution base,” Krueger said. He added that the brand appointed Tom Kennedy to the role of brand president this month to further capitalize on global lifestyle opportunities.

Saucony’s international business grew high-teens and now represents almost half of total Saucony revenue, Krueger noted.

Meanwhile, Merrell’s performance “improved significantly in Q4 versus the third quarter, largely due to its key product initiatives and new collection introductions,” according to Wolverine’s chief. Notably, Merrell.com saw 30 percent growth in Q4.

Full-year revenues for the company declined 7 percent, to $2.5 billion. Profits tumbled 33 percent, to $111 million, or 89 cents per diluted share. Adjusted diluted EPS were $1.36 and $1.52 on a constant-currency basis.

Looking ahead, Wolverine predicts full-year revenue in the range of $2.270 billion to $2.370 billion, a decline of 9 percent to 5 percent. Reported diluted EPS are forecast in the range of $1.19 to $1.29. Adjusted diluted EPS are expected in the range of $1.45 to $1.55 and $1.53 to $1.63 on a constant-currency basis.

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