Merrell drives Wolverine's Q2 sales
Second-quarter earnings for Wolverine World Wide (NYSE: WWW) jumped 21 percent from last year, driven by double-digit sales of its Merrell outdoor shoes.
Net income rose to $13.3 million, or $0.22 cents per share, from $11 million, or $0.18 cents per share, a year ago. Revenue grew 8.5 percent to $215.7 million from $198.8 million last year. The results topped analysts' expectations for earnings of $0.21 cents per share on sales of $213.1 million.
Gross profit margin expanded 1.2 percent, as foreign currency exchange helped lower costs for raw materials and the company sold more shoes with higher markups. The company said that overseas markets, especially Europe, performed well, as revenue from its international business rose 39 percent. Strong demand at retail allowed orders for future delivery to increase 12 percent.
"Our strong performance in the second quarter of 2005 was highlighted by the Outdoor Group, with Merrell leading the way among our portfolio of brands," said Timothy O'Donovan, chairman and CEO, in a statement. "Demand for the company's spring product offerings was significant, as evidenced by the performance of our brands at retail and an increase in at-once orders in the quarter. Of our four branded operating groups, the heritage group, the Hush Puppies Company and the outdoor group all experienced double-digit revenue and earnings increases."
The company said its footwear group did not experience a revenue increase due to the planned reduction in Bates military shipments. Quarterly margins improved due to the positive impact of foreign currency exchange on product costs and a stronger mix of higher-margin goods.
The company said it ended the second quarter with order backlog up about 12 percent, which should help Wolverine reach prior targets for earnings of $1.22 to $1.27 per share on sales of $1.045 billion to $1.065 billion for fiscal 2005. These estimates don't include any impact from the potential repatriation of foreign earnings under the American Jobs Creation Act of 2004, which the company is currently evaluating.
Analysts are expecting earnings of $1.27 per share to $1.30 per share, with an average estimate of $1.27 per share, on revenue of $1.065 billion.
Wolverine shares were down $1.60, or 6.6 percent, at $22.65 on the New York Stock Exchange after the lower-than-expected fiscal year numbers were announced.
Quiksilver sells $400 million 10-year notes
Quiksilver (NYSE: ZQK) sold $400 million of 10-year notes in the 144a private placement market, market sources said. The size of the deal was increased from an originally planned $350 million. J.P. Morgan, Banc of America Securities LLC and Societe Generale were the joint lead managers. Quiksilver is in the process of buying the Rossignol group.
Underwriters grab up Outdoor Channel shares
Underwriters of Outdoor Channel Holdings' (Nasdaq: OUTD) recent follow-on public offering of 5,300,000 shares of common stock -- priced at $13.50 per share -- have exercised their over-allotment option to purchase an additional 795,000 shares from certain existing stockholders. Bear, Stearns & Co. Inc. acted as the lead managing underwriter of the offering. The other managing underwriters were A.G. Edwards and Jefferies & Company.
Cabela's obtains credit facility
Cabela's (NYSE: CAB) said it has obtained a $325-million, five-year credit facility to help with its roll out of new retail stores. The credit facility, approved by a consortium of financial institutions led by U.S. Bank, replaces Cabela's existing $230 million, three-year agreement signed last year. The new facility can be increased to $450 million subject to certain terms and conditions, it said.
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