Wolverine's Q4 down, predicts tough first half of year
Despite record revenue and earnings per share for the '08 fiscal year, Wolverine World Wide's (NYSE: WWW) fourth-quarter revenue was down more than 3 percent, foreshadowing the difficulties it anticipates in the first half of 2009.
Wolverine's portfolio includes the Merrell and Chaco brands, as well as the exclusive footwear license for Patagonia Footwear.
For the quarter ended Jan. 3, revenue dropped 3.2 percent to $346.1 million from $357.4 million in the prior year. The company said the foreign exchange negatively impacted revenue growth by 3.3 percent.
Fully diluted earnings per share in the fourth quarter were $0.49, equal to the $0.49 per share reported in the prior year's fourth quarter.
For the full year, it reported record revenue of $1.221 billion, a 1.8 percent increase over prior-year revenue of $1.199 billion. Full-year earnings were $1.90 per fully diluted share, up 11.8 percent from $1.70 per share for the same period of 2007.
"The Outdoor Group, Heritage Brands Group and the Wolverine Footwear Group each posted revenue increases in the fiscal year, with the Outdoor Group and the Heritage Brands Group being the two most significant contributors to the company's profit improvement for the full year," said Blake Krueger, Wolverine's CEO and president, in a statement. "Despite foreign exchange headwinds attributed to a strengthening U.S. dollar, two of our four major branded operating groups delivered revenue gains in the fourth quarter, and two groups also posted profit increases."
The company's fourth-quarter gross margin of 38.5 percent was flat, while prior-year and full-year gross margin improved 40 basis points from the prior year, to 39.8 percent. It said this was a strong performance given the pressure from midyear product and transportation cost increases. Operating margin for the full year was essentially flat with the prior year.
Accounts receivable decreased 6.7 percent at year-end on a reported 3.2 percent decrease in fourth quarter revenue.
Wolverine said it expects a "challenging" first half of the year as the dollar strengthens and gave a wide range for 2009 guidance.
The company expects earnings of $1.50 to $1.70 per share, excluding restructuring costs of up to $0.49 per share. Excluding costs related to the stronger U.S. dollar and pension expense, the company expects earnings between $1.77 to $1.97 per share.
It anticipates sales to be between $1.16 billion to $1.24 billion, or down 5 percent to up 1.6 percent from the prior year.
--Compiled by Wendy Geister
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