Wolverine Worldwide Announces Second-Quarter Results And Reaffirms Full-Year Outlook

ROCKFORD, Mich., July 26, 2016 /PRNewswire/ -- Wolverine World Wide, Inc. (NYSE: WWW) today reported financial results for the second quarter ended June 18, 2016.  Adjusted financial results exclude restructuring and impairment costs.  References to underlying revenue indicate reported revenue adjusted for the impact of foreign exchange, retail store closures, and the exit of the Cushe business.

"We delivered better-than-expected results for the second quarter," said Blake W. Krueger, Wolverine Worldwide's Chairman, Chief Executive Officer and President.  "Equally important, we continued to drive progress against our key strategic initiatives, which are designed to accelerate growth and improve earnings performance through a relentless focus on the consumer, product innovation, and compelling storytelling. While the global retail environment continues to be volatile, our diversified business model - built around an industry-leading portfolio of brands - served us well in the quarter, and we expect that it will continue to be a critical competitive advantage for us in the future."

SECOND-QUARTER 2016 REVIEW

• Reported revenue of $583.7 million was in line with expectations, declining 7.4% versus the prior year. Underlying revenue declined 5.2% versus the prior year.
• Reported gross margin was 38.8%, compared to 39.1% in the prior year. Gross margin on a constant currency basis was 39.8%, an increase of 70 basis points versus the prior year.
• Reported operating margin was 7.2%, compared to 7.6% in the prior year. Adjusted operating margin on a constant currency basis was 8.4%, up 30 basis points versus the prior year's adjusted operating margin.
• Reported diluted earnings per share were $0.24 in the current and prior year quarter. Adjusted diluted earnings per share were $0.25, which exceeded expectations, and on a constant currency basis were $0.30, compared to $0.27 in the prior year.
• Inventory balances at the end of the quarter were 2.9% lower than the prior year.
• Cash and cash equivalents were $221.7 million. Reported debt was $808.0 million, which resulted in net debt of $586.3 million at quarter end.
• The Company repurchased 136,521 shares during the quarter at an average price of $17.94 per share.

"We are pleased with our performance for the second quarter," stated Mike Stornant, Senior Vice President and Chief Financial Officer.  "Our team's disciplined execution of our business model allowed us to effectively manage inventory below last year's level.  Looking ahead, we plan to leverage our operational strengths to enhance earnings and drive greater value for our shareholders."

FISCAL 2016 OUTLOOK

The Company is reaffirming its revenue and reported and adjusted diluted earnings per share outlook for fiscal 2016, as well as its expectation for inventory levels, as follows:

• Consolidated reported revenue in the range of $2.475 billion to $2.575 billion, a decline in the range of approximately 8.0% to 4.3% on a reported basis and 5.0% to 1.0% on an underlying basis.
• Reported diluted earnings per share in the range of $1.16 to $1.26. Adjusted diluted earnings per share in the range of $1.30 to $1.40. On a constant currency basis, adjusted earnings per share in the range of $1.48 to $1.58.
• Inventory levels to be meaningfully lower than 2015 at year-end.

EARNINGS CALL INFORMATION 
The Company will host a conference call today at 8:30 a.m. Eastern Time to discuss these results and current business trends.  The conference call will be broadcast live and accessible under the "Investor Relations" tab at wolverineworldwide.com.  A replay of the conference call will be available at the Company's website for a period of approximately 30 days.

ABOUT WOLVERINE WORLDWIDE 
With a commitment to service and product excellence, Wolverine World Wide, Inc. is one of the world's leading marketers of branded casual, active lifestyle, work, outdoor sport, athletic, children's and uniform footwear and apparel.  The Company's portfolio of highly recognized brands includes: Merrell^®, Sperry^®, Hush Puppies^®, Saucony^®, Wolverine^®, Keds^®, Stride Rite^®, Sebago^®, Chaco^®, Bates^®, and HYTEST^®.  The Company also is the global footwear licensee of the popular brands Cat^® and Harley-Davidson^®.  The Company's products are carried by leading retailers in the U.S. and globally in approximately 200 countries and territories.  For additional information, please visit our website, wolverineworldwide.com

FORWARD-LOOKING STATEMENTS 
This press release contains forward-looking statements, including statements regarding: the Company's ability to successfully execute key strategic initiatives, the Company's ability to accelerate growth and improve earnings performance; the advantages of the Company's diversified business model; the Company's ability to leverage operational strengths to enhance earnings and drive shareholder value; and the Company's fiscal 2016 guidance. In addition, words such as "guidance," "estimates," "anticipates," "believes," "forecasts," "step," "plans," "predicts," "projects," "is likely," "expects," "intends," "should," "will," "confident," variations of such words, and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions ("Risk Factors") that are difficult to predict with regard to timing, extent, likelihood, and degree of occurrence.  Risk Factors include, among others: changes in general economic conditions, employment rates, business conditions, interest rates, tax policies and other factors affecting consumer spending in the markets and regions in which the Company's products are sold; the inability for any reason to effectively compete in global footwear, apparel and consumer-direct markets; the inability to maintain positive brand images and anticipate, understand and respond to changing footwear and apparel trends and consumer preferences; the inability to effectively manage inventory levels; increases or changes in duties, tariffs, quotas or applicable assessments in countries of import and export; currency fluctuations; currency restrictions; capacity constraints, production disruptions, quality issues, price increases or other risks associated with foreign sourcing; the cost and availability of raw materials, inventories, services and labor for owned and contract manufacturers; labor disruptions; changes in relationships with, including the loss of, significant wholesale customers; the failure of the U.S. Department of Defense to exercise future purchase options or award new contracts, or the cancellation or modification of existing contracts by the Department of Defense or other military purchasers; risks related to the significant investment in, and performance of, the Company's consumer-direct operations; risks related to the expanding into new markets and complementary product categories as well as consumer-direct operations; the impact of seasonality and unpredictable weather conditions; changes in general economic conditions and/or the credit markets on the Company's distributors, suppliers and customers; increase in the Company's effective tax rates; failure of licensees or distributors to meet planned annual sales goals or to make timely payments to the Company; the risks of doing business in developing countries, and politically or economically volatile areas; the ability to secure and protect owned intellectual property or use licensed intellectual property; the impact of regulation, regulatory and legal proceedings and legal compliance risks; the potential breach of the Company's databases, or those of its vendors, which contain certain personal information or payment card data; problems affecting the Company's distribution system, including service interruptions at shipping and receiving ports; strategic actions, including new initiatives and ventures, acquisitions and dispositions, and the Company's success in integrating acquired businesses, and implementing new initiatives and ventures; the risk of impairment to goodwill and other acquired intangibles; the success of the Company's consumer-direct realignment initiatives; changes in future pension funding requirements and pension expenses; and additional factors discussed in the Company's reports filed with the Securities and Exchange Commission and exhibits thereto. The foregoing Risk Factors, as well as other existing Risk Factors and new Risk Factors that emerge from time to time, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.  Furthermore, the Company undertakes no obligation to update, amend, or clarify forward-looking statements.

The following tables contain information regarding the non-GAAP adjustments used by the Company in the presentation of its financial results:

SOURCE Wolverine Worldwide, Inc.