In its second-quarter financial report, the company posted mixed results, with adjusted diluted earnings per share of 52 cents versus Wall Street’s estimates of 50 cents. Sales, on the other hand, were lower than predicted, increasing 0.3% — or 1.1% adjusted for currency — to $568.6 million, compared with the $575.2 million consensus.
However, CEO and president Blake Krueger noted that four of the firm’s top five brands either met or exceeded expectations.
“Merrell grew mid-single digits, and Sperry improved to flattish growth in the quarter,” he said in a statement. “As we look into the second half of the year, we expect to deliver mid-single digit revenue growth driven by strength in Merrell, Sperry and Saucony.”
According to Krueger, the late start to the spring and the sluggish retail environment did little to stymie the company’s gains during the period, with Wolverine’s e-commerce business jumping upwards of 25%.
However, Wolverine anticipates a hit from President Donald Trump’s levies of 10% on an additional $300 billion worth of Chinese imports — particularly in its inventory, which rose 38.4% year-over-year. (The second quarter included a significant pull-ahead of China-sourced production prior to the implementation of the fourth tranche of tariffs in September.)
Among the other bright spots so far this year, the Rockford, Mich.-based company has also been amplifying its international presence, including a previously announced joint venture with Chinese sportswear retailer Xtep International Holdings Ltd. to grow its Merrell and Saucony products in mainland China, Hong Kong and Macau.
Wolverine is also expanding operations in Europe through the acquisition of one of its key Saucony footwear distributors as well as opening new outlet store locations for the Merrell and Sperry brands as part of its direct-to-consumer strategy.
For the full year, revenues are expected at roughly $2.28 billion, within the range of prior outlook and guidance, while adjusted diluted earnings per share are forecasted to be $2.28.
As of 10:30 a.m. ET, Wolverine’s stock was down 1% to $26.85.
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