Wolverine delivers excellent earnings performance in Q3
Wolverine World Wide, Inc. reported financial results for the third quarter of 2009 and raised full-year earnings per share guidance.
Adjusting for the negative impact of foreign exchange rates, revenue declined 6.9% in the quarter to $296.8 million, as challenging trading conditions continued across most of the Company's major markets. Reported revenue in the third quarter was $286.8 million, a decline of 10.1% versus the prior year.
The Company continued to make substantial progress in the quarter with its strategic restructuring plan, which is focused on generating significant efficiencies across the Company's supply chain, logistics and backroom functions.
Non-recurring restructuring and related charges of $5.1 million, or $0.08 per fully diluted share, were recorded in the quarter. Adjusting for these charges, fully diluted earnings in the quarter were $0.62 per share, equal to the $0.62 per share in the prior year. Further adjusting for a negative $0.05 per share impact in the quarter from foreign exchange, fully diluted earnings were $0.67 per share, 8.1% above the prior year. Reported fully diluted earnings were $0.54 per share.
"We are very pleased with our third quarter results, as the Company continues to deliver excellent earnings performance in the most challenging economic environment that many of us have ever experienced," stated Blake W. Krueger, the Company's CEO and President. "We remain confident that our multi-brand, multi-country business model and our execution against that model can deliver exceptional results in a variety of economic climates.
Krueger continued, "The strength of our brand portfolio coupled with our growth and efficiency initiatives convince us that the Company is positioned for success as we cycle through the global recession. Our key strategic objectives remain unchanged as we stay focused on growing our proven brands via greater wholesale penetration, expanding our consumer-direct initiatives and further extending into apparel and accessories.
The demonstrated success of these strategies, combined with our ability to generate permanent cost savings by mining for efficiencies throughout the organization, has us poised to achieve accelerated profit growth in an improved consumer spending environment."
Don Grimes, the Company's Chief Financial Officer, commented, "The Company's impressive 2009 financial performance continued in the third quarter. A heightened emphasis on reducing discretionary operating expenses and the recognition of benefits from new tax strategies helped us achieve earnings per share, excluding restructuring and related charges, equal to the prior year in extremely tough economic conditions."
Highlights for the quarter:
• Gross margin was 40.9%, compared to prior-year gross margin of 40.4%, after adjusting for $1.3 million of non-recurring restructuring and related charges and the impact of foreign exchange. Reported gross margin was 39.7%.