Wolverine World Wide, Inc. Reports Record Revenue and Earnings for the First Quarter 2011 and Raises Full Year Guidance

ROCKFORD, Mich., April 19, 2011 /PRNewswire/ -- Wolverine World Wide, Inc. (NYSE: WWW) today reported that strong consumer demand and accelerated revenue growth across its brand portfolio generated record performance in the first quarter of 2011.  

Reported revenue for the first quarter was $330.9 million, an increase of 16.1% versus the prior year.  The outstanding revenue performance was broad-based, as all three branded operating groups contributed to the consolidated record result.  

Fully diluted earnings were a record $0.72 per share, compared to 2010 adjusted fully diluted earnings of $0.56 per share, an increase of 28.6%.  The prior year's adjusted earnings exclude the impact of restructuring charges and other expenses related to the Company's strategic restructuring plan that was completed in the second quarter of 2010.  Reported fully diluted earnings for the first quarter 2010 were $0.54 per share.

"Wolverine World Wide is off to an outstanding start in 2011," stated Blake W. Krueger, the Company's Chairman and Chief Executive Officer.  "We experienced strong consumer demand for our products across all geographic regions.  Our Outdoor Group, especially the Merrell brand, and the Heritage Group both delivered impressive results during the quarter.

"All of our brands have a rich history and authentic heritage, which is resonating within the global marketplace.  Our investments and efforts behind product innovation and design over the past several years are paying dividends and providing us with a sustainable advantage and point of differentiation with consumers.  As just one example, the new Merrell Barefoot Collection, introduced at retail just this past February, has exceeded our expectations and is already one of the most successful product launches in the history of the Company.  Superb product innovation, coupled with our team's rigorous and consistent execution of our global business model, has the Company well positioned for future growth."

Don Grimes, the Company's Chief Financial Officer, commented, "Our disciplined management of the business during the challenging macroeconomic conditions of the past few years has laid the groundwork for accelerated growth across the brand portfolio.  We are balancing continued financial discipline with investments behind our brands that we believe will drive growth and provide excellent returns for our shareholders."  

Highlights for the quarter:

• Gross margin was 41.6%, slightly above the prior year's gross margin, adjusted for restructuring and related charges.  Benefits from strategic price increases were offset by negative mix and increased product costs during the quarter.  Reported gross margin for the first quarter 2010 was 41.3%.

• First quarter 2011 operating expenses as a percentage of revenue were 26.7%, compared to 27.6% in 2010, adjusted for restructuring and related charges.  Operating expenses in the quarter of $88.3 million increased 12.5%, driven by variable costs associated with strong revenue growth and a planned increase in advertising and marketing investments.  Reported operating expenses for the first quarter 2010 were $79.1 million.

• Inventory at the end of the quarter increased $78.2 million, or 45.5%, compared to the prior year and reflects the continued strength of our order backlog, strategic purchases of core product in advance of price increases and the excellent outlook for the balance of the fiscal year.

• The effective tax rate in the quarter was 28.0%, driven lower primarily by more favorable statutory tax rates in both Canada and the United Kingdom.

• The Company repurchased approximately 142,000 of its own shares in the quarter for an aggregate cost of $5.1 million.  As announced earlier in the quarter, the Company increased its quarterly dividend 9.1%, to $0.12 per share, payable on May 2, 2011 to stockholders of record on April 1, 2011.

Based upon the record first quarter results and continued strong order trends throughout the quarter, the Company is increasing both its revenue and earnings per share guidance for the full fiscal year.  For fiscal 2011, the Company is increasing its revenue estimate to a range of $1.380 billion to $1.420 billion, representing growth of 10.5% to 13.7% versus the prior year.   The Company is also increasing its fully diluted earnings per share guidance to a range of $2.40 to $2.50, representing growth of 10.6% to 15.2% versus the prior-year adjusted earnings per share (growth of approximately 13.7% to 18.5% versus reported earnings per share).

Krueger concluded, "2011 is off to a fantastic start for the Company and our outlook has never been better.  The strength of our leadership team, our steadfast focus on execution and our continued drive to deliver innovative products have positioned the Company for another excellent year."  

The Company will host a conference call at 8:30 a.m. EDT today to discuss these results and current business trends.  To listen to the call at the Company's website, go to www.wolverineworldwide.com, click on "Investor Relations" in the navigation bar, and then click on "Webcasts & Presentations" from the side navigation bar of the "Investor Relations" page.  To listen to the webcast, your computer must have a streaming media player, which can be downloaded for free at www.wolverineworldwide.com.  In addition, the conference call can be heard at www.streetevents.com. A replay of the call will be available at the Company's website through May 3, 2011.

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 and uniform footwear and apparel.  The Company's portfolio of highly recognized brands includes: Bates®, Chaco®, Cushe™, Hush Puppies®, HYTEST®, Merrell®, Sebago® Soft Style® and Wolverine®.  The Company also is the exclusive footwear licensee of popular brands including CAT®, Harley-Davidson® and Patagonia®. The Company's products are carried by leading retailers in the U.S. and globally in more than 190 countries and territories. For additional information, please visit our website, www.wolverineworldwide.com.

This press release contains forward-looking statements. In addition, words such as "estimates," "anticipates," "believes," "forecasts," "plans," "predicts," "projects," "is likely," "expects," "intends," "should," "will," 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. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements.  Risk Factors include, among others:  the Company's ability to successfully develop its brands and businesses; changes in duty structures in countries of import and export including anti-dumping measures and trade defense actions; changes in consumer preferences or spending patterns; cancellation of orders for future delivery, or the failure of the Department of Defense to exercise future purchase options, award new contracts or the cancellation of existing contracts by the Department of Defense or other military purchasers; changes in planned customer demand, re-orders or at-once orders; the availability and pricing of footwear manufacturing capacity; reliance on foreign sourcing; failure of international licensees and distributors to meet sales goals or to make timely payments on amounts owed; disruption of technology systems; regulatory or other changes affecting the supply of materials used in manufacturing; the availability of power, labor and resources in key foreign sourcing countries, including China; the impact of competition and pricing; the impact of changes in the value of foreign currencies; the development of new initiatives; the risks of doing business in developing countries, and politically or economically volatile areas; retail buying patterns; consolidation in the retail sector; changes in economic and market conditions; acts and effects of war and terrorism; weather; and additional factors discussed in the Company's reports filed with the Securities and Exchange Commission and exhibits thereto.  Other Risk Factors exist, and new Risk Factors emerge from time to time that 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.

SOURCE Wolverine World Wide, Inc.