Post Earnings Coverage as Wolverine World Wide’s Q1 2017 Results Outperformed Projections

Upcoming AWS Coverage on Fossil Group Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 30, 2017 / Active Wall St. announces its post-earnings coverage on Wolverine World Wide, Inc. (NYSE: WWW) (“Wolverine”). The Company announced its financial results for the first quarter fiscal 2017 (Q1 2017) on May 10, 2017. The footwear maker’s adjusted earnings jumped 19% on a y-o-y basis. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Wolverine World Wide’s competitors within the Textile – Apparel Footwear & Accessories space, Fossil Group, Inc. (NASDAQ: FOSL), reported on May 09, 2017, its financial results for the fiscal quarter ended April 01, 2017. AWS will be initiating a research report on Fossil Group in the coming days.

Today, AWS is promoting its earnings coverage on WWW; touching on FOSL. Get our free coverage by signing up to http://www.activewallst.com/register/.

Earnings Reviewed

In Q1 FY17, Wolverine reported net sales of $591.3 million compared to net sales of $577.6 million in Q1 FY16. The Company’s revenue decreased by 4.8% after taking into consideration the impact of the additional week of operations in Q1 FY17. Wolverine’s revenue numbers came in better than analysts’ consensus estimates of $556.6 million.

In Q1 FY17, Wolverine reported gross margin of 39.7% compared to 39.6% in Q1 FY16. The Company’s adjusted gross margin on a constant currency basis was 41.7% for the reported year, up 120 basis points versus the prior year.

Wolverine reported Q1 FY17 net earnings of $16.8 million, or $0.17 per diluted earnings share, compared to $17.6 million, or $0.18 per diluted earnings share, in Q1 FY16. The Company’s adjusted diluted earnings per share were $0.37 compared to $0.31 in the prior year, and ahead of Wall Street’s estimates of $0.31 per share.

Operating Metrics

For the 13 weeks ended on April 01, 2017, Wolverine reported operating profit of $32.6 million compared to $34.0 million in the prior year. In Q1 FY17, the Company reported operating margin of 5.5% compared to 5.9% in Q1 FY16. Adjusted operating margin on a constant currency basis was 11.0%, up 260 basis points versus the prior year and excluded $4.4 million of incremental inventory markdowns related to the accelerated store closings.

Cash Flow and Balance sheet

In Q1 FY17, Wolverine utilized $30.8 million in cash from operations compared to $78.9 million in cash from operations in Q1 FY16. The Company had cash and cash equivalents balance of $304.1 million as on April 01, 2017, compared to $158.2 million at the end of March 26, 2016. In Q1 FY17, Wolverine reported inventory at the end of the quarter was down 25.9% on a y-o-y basis.

Store Update

Wolverine stated that its Store Restructuring Plan has accelerated, with 180 stores now closed since the beginning of 2017. The Company incurred approximately $9.2 million of operating losses in Q1 FY17 for stores within the Plan that will not reoccur next year. The losses include $4.4 million of inventory mark-downs related to accelerated store closures. Wolverine noted that, All Stride Rite and Track-N-Trail concept stores are now closed. These store closures allowed the Company to liquidate inventory totaling approximately $20 million during the reported quarter.

Dividend

In a separated press release on May 03, 2017, Wolverine announced that its Board of Directors declared a quarterly cash dividend of $0.06 per share of common stock. The dividend is payable on August 01, 2017, to stockholders of record on July 03, 2017. The dividend is equal to the last quarterly dividend and reflected an indicated annual dividend of $0.24 per share.

Outlook

For FY17, Wolverine is estimating revenue in the range of $2.27 billion to $2.37 billion, unchanged from the Company’s previous outlook. The Company is expecting underlying revenue in the range of down 2.3% to growth of 1.9%, reflecting approximately $160 million to $180 million of impact from currency and retail store closures.

For FY17, Wolverine is forecasting operating margin in the range of 5.2% to 5.9% and adjusted operating margin in the range of 10.2% to 10.7%, resulting from operational excellence initiatives focused on supply chain optimization, Omni channel transformation, and operational efficiencies. The Company in projecting FY17 diluted earnings per share in the range of $0.73 to $0.83. Furthermore, adjusted diluted earnings per share are expected in the range of $1.50 to $1.60 compared to $1.36 in FY16.

Stock Performance

At the close of trading session on Friday, May 26, 2017, Wolverine World Wide’s stock price climbed 2.33% to end the day at $25.95. A total volume of 675.00 thousand shares were exchanged during the session. Wolverine World Wide’s stock price advanced 6.18% in the last month, 1.33% in the past three months, and 4.01% in the previous six months. Moreover, the stock surged 18.22% since the start of the year. The Company’s shares are trading at a PE ratio of 29.39 and have a dividend yield of 0.92%. The stock currently has a market cap of $2.46 billion.

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