The company announced today that its Q2 profits more than doubled year over year to $55.3 million, or 57 cents per diluted share. On an adjusted basis, profits were 54 cents per share, topping analysts’ forecasts for earnings of 46 cents per share.
Reported revenues, however, fell 5.3 percent to $567 million, missing Wall Street’s estimate of $569 million. Still, Wolverine pointed out that its underlying revenue increased 3.9 percent while adjusted revenues improved 3.3 percent.
“We had a strong second quarter highlighted by solid revenue performance, especially from Merrell and Sperry, along with earnings that significantly surpassed expectations” said chairman, president and CEO Blake Krueger. “Our underlying revenue growth during the quarter was the highest since the second quarter of 2015, and reflects early progress against our Global Growth Agenda.”
After several quarters of softness, Sperry’s sales had turned positive in Q1 while Merrell is continuing a solid revenue run.
As a result of its better-than-expected close to the quarter, the company raised its earnings projection for the full year. It now expects reported diluted earnings per share in the range of $2.05 to $2.12 and adjusted diluted earnings per share are expected to be in the range of $2.08 to $2.15 — this compares to previous estimates for reported EPS in the $1.92 to $2.02 range and adjusted EPS in range of $2.00 to $2.10. (Fiscal 2018 revenue is forecast in the range of $2.24 billion and $2.32 billion.)
Wolverine had also upward adjusted its forecast during the previous quarter — a probable sign that its efforts to streamline its processes and improve overall operations are paying off.
“The company made nearly $20 million in key incremental investments intended to drive growth during the first half of 2018 as part of our Global Growth Agenda,” Krueger said today of a series of companywide initiatives, which last year saw the firm sell the Sebago brand, license out Stride Rite, and drop its Department of Defense footwear business in a bid to right size its portfolio.
“Investment has focused on several initiatives across the three key elements of the Agenda — a more robust and streamlined product development process, optimizing our social prospecting capabilities, and adding strategic and operational resources to our international teams, especially in China. We’re excited to see the benefits of the new tools and capabilities being put in place to better drive top-line performance,” he added.
Wolverine is home to a stable of shoe brands including Hush Puppies, Saucony and Keds.
As of 12:45 p.m. ET, the company’s shares were up more than 1 percent to $36.38.