Wolverine (WWW) Posts Record Revenue for Q2, but Misses Projections

A year after posting a 20-percent increase in revenue, Wolverine Worldwide (WWW) boasted a new record for quarterly revenue when it announced its earnings report for the second quarter that ended June 16.

Early Tuesday morning, Wolverine reported second-quarter earnings of $312.7 million, up 0.8 percent over the same period in 2011, when revenue shot up 20 percent. However, that revenue mark was $2 million short of analysts’ projections. Foreign exchange stunted the number by nearly $4 million, according to a press releases by the company. Reported per-share earnings were 42 cents, down from 48 cents a year earlier. Gross margin decreased to 37.8 percent from the prior year and inventory was trimmed by 1.3 percent. Wolverine shares are up $2.45, or 6.4%, today. Scopus Asset Management, SAC Capital, and Magnetar Capital are among the hedge funds with large WWW positions.

Wolverine’s pending acquisition of Performance + Lifestyle Group (PLG) has affected stock price lately, and once that deal is finalized, the company is anticipating even more growth.

“We are pleased that despite the softness in certain global markets, most notably Europe, we remain on track to deliver another year of record financial results,” said Blake W. Krueger, Chairman and Chief Executive Officer, in a release.  “Our diverse brand portfolio and a business model that spans geographies and distribution channels help to mitigate risk and smooth out a choppy global retail environment.  Our U.S. business had a solid quarter, and the Company’s consumer direct business was also a bright spot, posting a strong double-digit revenue increase from both brick and mortar locations and the eCommerce channel. Our Outdoor Group, consisting of Merrell, Chaco and Patagonia Footwear, delivered a solid revenue increase in the quarter.”

In the wake of this report, Wolverine announced no changes in its full-year guidance, reaffirming its revenue at $1.46B to $1.5B, which would reflect growth of 3.6 to 6.4 percent over 2011, and the earnings-per-share was reaffirmed at $2.70 to $2.80 (growth of nearly 9 to 13 percent).

This should be very good news for Chuck Royce’s Royce & Associates and for David Dreman’s Dreman Value Management. These funds were invested to the tune of $118 million combined at the end of March – before this earning report and prior to the news of the planned PLG acquisition. They should be two funds that likely benefit from such record-setting news out of Michigan.