Wolverine World Wide reports rise in Q2 revenue

16 Jul '10

4 min read

Wolverine World Wide, Inc. reported strong results for the second quarter ended June 19, 2010, including its second consecutive quarter of record earnings per share.

Second quarter reported revenue was $258.2 million, an increase of 4.8% versus the prior year. Continued impressive organic growth was partially offset by the delay into the subsequent quarter of a significant shipment to a third-party distributor and, as expected, by lower closeout sales – the latter of which had a beneficial impact on gross margin in the quarter. Foreign exchange had minimal impact on reported revenue in the quarter.

Excluding $2.7 million of charges in the quarter related to the Company's now fully implemented strategic restructuring plan, diluted earnings were a record $0.39 per share, compared to 2009 adjusted diluted earnings of $0.27 per share, an increase of 44.4%. Reported diluted earnings in the quarter were $0.35 per share, compared to $0.16 per share in the second quarter of 2009.

"The momentum in our business this year continued into the second quarter with very solid growth in both revenue and earnings," stated Blake W. Krueger, the Company's Chairman and Chief Executive Officer. "Our strong financial results were well balanced across our portfolio, with all four major branded operating groups contributing to the outstanding earnings performance. Our retail and eCommerce businesses also delivered impressive results. The Company's exceptional year-to-date earnings performance is a clear testament to the power of our global business model."

Don Grimes, the Company's Chief Financial Officer, commented, "The Company remains focused on meeting the performance needs and style demands of our consumers, while continually striving to increase market share across the product categories in which our brands compete. We believe the quarter's excellent results underscore the Company's focus on rewarding our investors with an appropriate balance between near-term earnings growth and long-term investments for the future."

Highlights for the quarter:

• Adjusted for restructuring and related charges in both years, gross margin in the quarter expanded significantly to a record 40.3%, compared to prior year gross margin of 37.8%, driven by a lower percentage of closeout sales, lower product costs and benefits from year-over-year selling price increases. Reported gross margin in the quarter was 40.2% versus 37.3% for the second quarter 2009.
• Adjusted for restructuring and related charges in both years, operating expenses in the quarter were $76.7 million, compared to prior year operating expenses of $72.8 million, an increase of 5.4%. The increase was driven, in part, by double-digit growth in advertising and marketing spend and incremental investments in selling infrastructure designed to fuel future growth. Reported operating expenses in the quarter were $79.0 million versus $79.7 million for thesecond quarter 2009.

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