Wolverine sees 1Q revenue, profit drop, but raises outlook for 2012

Parent company of Merrell, Chaco and Patagonia Footwear reported lower revenue and profit for the first quarter 2012 on weaker sales in Europe, but Wolverine Worldwide officials expect sales to rebound during the second half of the year. The company reports the barefoot/minimalist trend as still going strong.
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The parent company of Merrell, Chaco and Patagonia Footwear reported lower revenue and profit for the first quarter 2012 on weaker sales in Europe, but officials expect sales to rebound during the rest of the year.

Wolverine Worldwide (NYSE: WWW) reported its quarterly revenue down 2.4 percent to $322.8 million, compared to a year ago. The Rockford, Mich.-based footwear company’s net income slipped to $31.2 million, or 64 cents per diluted share, versus a net income of $35.9 million, or 72 cents per diluted share, a year ago.

A small silver lining for the industry is that Wolverine’s Outdoor Group sales (including Merrell, Chaco and Patagonia Footwear) experienced less of a decline in the first quarter, dropping just 0.7 percent to $137.1 million. The outdoor brands represented about 42.5 percent of Wolverine’s total business.

On the company’s conference call Monday morning, Wolverine Chairman and CEO Blake Krueger said Merrell continues to see strong results from its barefoot and minimalist categories, despite increased competition in the United States. Krueger said the trend was picking up on the international front, where the company is well positioned to capture sales. Wolverine recently annouced joint-venture distribution deals in Colombia and India to widen its international sales reach.

Wolverine’s Chaco brand reported sales gains from expanded product lines and early warm spring temperatures in the United States, and its Patagonia Footwear brand also performed well, led by sales of trail running shoes, officials said.

"While we expect 2012 to be another record year for the company, most of our growth is planned for the second half, as retailers remain cautious and are focused on keeping inventories lean," Krueger said in a statement with the earnings release.

Looking ahead, company officials raised Wolverine’s full-year 2012 estimates, projecting revenue growth between 3.6 and 6.5 percent (to a range of $1.46 billion to $1.5 billion) and net income per share growth between 8.9 and 12.9 percent (to a range of $2.70 to $2.80 per share).

Wolverine’s first-quarter 2012 earnings present early mixed results for the outdoor footwear sector on Wall Street in the first quarter. Rocky Brands reported slightly higher first-quarter sales and profit last week and further insight will come from the parent companies of Timberland, The North Face, Montrail, Columbia, Teva, Salomon, Crocs and Lacrosse later this week.

--David Clucas

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