Merrell 3Q sales slip on weak outdoor retail, parent firm Wolverine Worldwide lowers 2012 expectations

Wolverine Worldwide, parent to Merrell, Chaco, Patagonia Footwear and now Saucony brands, reported lower revenue and profit for the third quarter 2012, citing weakness in outdoor retail and Europe.
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Wolverine Worldwide (NYSE: WWW), parent to Merrell, Chaco, Patagonia Footwear and now Saucony brands, reported lower revenue and profit for the third quarter 2012, citing weakness in outdoor retail and Europe.

Wolverine’s Outdoor group, a highlight for the company during past few years, led the losses this time around — down 7.9 percent in revenue to $134 million during the third quarter, compared to a year ago. Overall, Wolverine reported its quarterly revenue down 2.4 percent to $353.1 million.

In a conference call following the earnings release on Oct. 16, Wolverine President and CEO Blake Krueger told investors that Merrell sales fell as “outdoor retailers have struggled to deal with the impact of last year's unusually warm fall and winter, as well as the shifting in consumer taste in lightweight and athletic styling.”

Krueger said the company is adjusting on the latter making gains with Merrell’s new “outdoor athletic” products such as its Barefoot collection along with other lightweight and minimalist offerings.

“Although outside athletic is the smallest of the three segments and Merrell, the year-to-date shipments are up almost triple digits and orders for delivery next year are up at a strong double-digit pace,” Krueger said.

On the other hand, Merrell’s active lifestyle footwear struggled in the third quarter, and Krueger said the company will refocus its efforts to accelerate new active lifestyle products to market.

Wolverine’s overall quarterly profit slipped to $32.7 million, or 66 cents per share, versus $40.4 million a year ago, or 82 cents per share. Officials said part of that decline was due to acquisition-related costs of Collective Brands’ Performance and Lifestyle Group, including Saucony, Sperry Top-Sider, Stride Rite, and Keds, which was completed this October’s and sales will begin to reflect in the fourth quarter.

Excluding the acquisition, Wolverine officials lowered their full-year 2012 revenue projections to a range between 1.425 billion and 1.435 billion (1.1 to 1.8 percent growth), versus previous expectations between $1.46 billion and $1.5 billion (3.6 percent to 6.4 percent growth).

Including the acquisitions in the fourth quarter 2012, officials projected full-year 2012 revenue between $1.645 billion and $1.655 billion.



-- David Clucas

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