Outdoor financials: Wolverine’s Q1 earnings surge on Merrell sales, plus Hanesbrands/Hind, GSI Commerce

Wolverine World Wide's first-quarter profit more than doubled and its operating expenses decreased, Hanesbrands swung into the black for the first quarter, and GSI Commerce said it would redeem its 3 percent convertible notes due in 2025.
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Wolverine’s Q1 earnings surge on Merrell sales

Witnessing a lift in consumer spending, Wolverine World Wide's (NYSE: WWW) first-quarter profit more than doubled and its operating expenses decreased. Wolverine is the parent of Merrell and Chaco, and it holds the license for Patagonia Footwear.

"Trading conditions and consumer confidence in most of our major markets have significantly improved," said CFO Don Grimes in a statement. At the same time, the company has been through multiple rounds of cost-cutting initiatives, which have lowered company overhead.

Wolverine's earnings jumped to $27.5 million, or $0.54 per share, from $10.5 million, or $0.21 per share, a year ago. Removing $1.5 million in charges related to restructuring, its profit was $0.56 per share.

Operating expenses declined to $79.1 million from $87.5 million.

For the quarter ended March 27, revenue was up 12 percent to $284.9 million from $255.3 million.

"While the Outdoor Group, led by the Merrell brand, remains the company's leading profit contributor,” said Blake Krueger, Wolverine’s chairman and CEO, in a statement, “our Heritage Brands Group, Wolverine Footwear Group and Hush Puppies Group all contributed to our robust performance, posting strong double-digit earnings increases during the quarter."

The company also reduced inventory by 21 percent to $45.8 million.

Also, it lifted its fiscal 2010 adjusted profit outlook to a range of $1.92 to $2 per share, up from a prior forecast of $1.88 to $1.96 per share. The company increased its revenue guidance to a range of $1.16 billion to $1.19 billion. It previously predicted revenue between $1.14 billion and $1.17 billion.

Hind parent swings into black for Q1

Hanesbrands (NYSE: HBI), parent of Hind and Saucony, swung into the black for the first quarter on increased sales and improved operating margin.

For the quarter ended April 3, the company’s net income was $36.5 million, or $0.37 per share, compared to a loss of $19.3 million, or $0.20 per share, in the same period last year.

Net sales increased by 8.2 percent to $927.8 million versus $857.8 million in the year-ago quarter, with every business segment except hosiery reporting sales growth.

The company said its retail shelf-space gains contributed 6 percentage points of sales growth, while 2 percentage points of growth was driven by increased retail sell through, retailer inventory restocking, and foreign currency exchange rates.

Based on the strong performance in the quarter, Hanesbrands has revised its 2010 net sales guidance to 6 percent to 8 percent growth. It also raised its 2010 EPS guidance to a range of $2.15 to $2.27.

GSI looks to redeem notes

GSI Commerce (Nasdaq: GSIC), a provider of e-commerce and interactive-marketing services, said it has called its 3 percent convertible notes due 2025 for redemption, although it expects holders of the notes will convert them before it can redeem them.

It will redeem the notes at a price equal to 100 percent of their principal value, plus the interest that has accrued, but has not been paid on them up to, but not including, the June 7 redemption date. The outstanding notes have an aggregate principal value of $57.5 million.

The company said holders of the notes could convert them into shares of GSI’s common stock at a rate of 56.1545 shares per $1,000 principal amount of notes, which is a conversion price of nearly $17.81 per share.

GSI expects all the notes will be converted because its stock is trading for more than $28 per share. The holders of the notes may convert them from May 1 until the close of business June 4.

--Compiled by Wendy Geister

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