Wolverine World Wide Inc. reported strong earnings and revenues gain for the first quarter and now sees 2021 as a “breakthrough” year for the company.
Net earnings for the first quarter ended April 3 rose to $38.5 million on a 16.3 percent gain in sales to $510.7 million. That compares to $13 million in profit and $439.3 million in sales in the year-ago period.
“We believe 2021 will be a breakthrough year for the company, and our first-quarter performance was an excellent start,” said Blake W. Krueger, Wolverine Worldwide’s chairman and chief executive officer.
“In the first quarter, Merrell revenue grew nearly 25 percent, and Saucony revenue was up nearly 60 percent compared to last year, powered by our accelerated digital strategy and big new product stories that are resonating with consumers. Our ongoing investment in digital fueled e-commerce growth of 84 percent well ahead of our expectations. Our brands are well positioned in trending, performance-oriented product categories like running, hiking and work, and their momentum remains strong. We anticipate growth to continue to accelerate moving forward.”
The company’s portfolio also includes the Sperry, Hush Puppies, Wolverine, Keds, Chaco, Bates, Hytest and Stride Rite brands and it is the global footwear licensee of the Cat and Harley-Davidson brands.
In other results, owned e-commerce revenue grew 83.6 percent versus the prior year. Reported gross margin was 43.5 percent, compared to 41.4 percent a year ago. Adjusted gross margin was 44.3 percent, compared to 41.4 percent in the prior year.
Reported operating margin was 11.4 percent, compared to 3.8 percent in the prior year. Adjusted operating margin was 10.2 percent compared to 6.9 percent in the prior year.
Diluted earnings per share were $0.45, compared to $0.16 in the prior year. Adjusted diluted earnings per share were $0.40, and, on a constant currency basis, $0.40, compared to $0.28 in the prior year.
Inventory at the end of the quarter was down 20.8 versus the prior year, and cash flow from operating activities generated $26.3 million in the quarter, or $102.9 million more than in the prior year.
“The company drove strong financial results for the first quarter, delivering meaningful revenue growth and gross margin expansion in the face of certain supply chain obstacles that have plagued the industry,” said Mike Stornant, senior vice president and chief financial officer. “Demand for our brands is strong, as evidenced by our better-than-expected e-commerce growth and our robust wholesale order book. Core inventory levels continue to increase in the second quarter to support the business trends, and we expect to be well positioned to chase upside opportunities later in the year, giving us confidence to raise our outlook for the year.”
For the full 2021 fiscal year, Wolverine now expects revenue in the range of $2.24 billion to $2.3 billion, representing growth of 25 to 28 percent versus the prior year. That’s up $50 million from the outlook made in February and exceeding 2019 revenue at the high end of the range.
The company has targeted $500 million in owned e-commerce revenue, more than doubling 2019 levels. Reported diluted earnings per share are now expected to be in the range of $1.70 to $1.85, and adjusted diluted earnings per share are now expected to be in the range of $1.95 to $2.10.
Wolverine said that its outlook assumes no meaningful deterioration of current market conditions related to the COVID-19 during the remainder of 2021.
The Merrell brand.
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