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Wolverine Worldwide posts 11 percent decline in Q3 revenue

By Prachi Singh

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Business

Wolverine Worldwide said that its third quarter revenue of 603.7 million dollars was in line with expectations, declining 11.1 percent versus the prior year. Underlying revenue declined 8.6 percent against the prior year. Reported diluted earnings per share were 0.49 dollar, compared to 0.44 dollar in the prior year and adjusted diluted earnings per share were 0.49 dollar and on an adjusted constant currency basis, were 0.51 dollar compared to 0.48 dollar in the prior year.

"We delivered strong earnings results on revenue in line with our expectations for the third quarter, despite the tepid retail environment," said Blake W. Krueger, Wolverine Worldwide's Chairman, CEO and President, adding, “We believe the investments and initiatives we're pursuing today will deliver greater value to shareholders in 2017 and beyond."

Financial review of the quarter

Reported gross margin was 39.3 percent, compared to 40 percent in the prior year, while adjusted gross margin on a constant currency was flat versus the prior year. Reported operating margin was 11.4 percent, compared to 11.2 percent in the prior year. Adjusted operating margin on a constant currency basis was 12.2 percent, up 30 basis points.

"While the macro environment remains challenging, we are pleased with our ability to drive operating margin expansion and earnings per share growth in the quarter," stated Mike Stornant, Senior Vice President and Chief Financial Officer, adding, “Looking ahead, we remain focused on driving operational improvements across the portfolio, including a review of strategic alternatives for some areas of the business."

Fiscal 2016 outlook remains unchanged

The company's outlook range for full-year reported revenue and adjusted diluted earnings per share remains unchanged. Given tepid conditions, the company now expects full-year reported revenue at the lower end of the range and full-year adjusted diluted earnings per share near the midpoint of the range. Consolidated reported revenue is expected to be in the range of 2.475 billion dollars to 2.575 billion dollars, a decline of approximately 8 percent to 4.3 percent.

The company anticipates a decline in consolidated underlying revenue of approximately 5.6 percent to 1.8 percent, reflecting the updated impact of currency and store closures. Reported diluted earnings per share are expected to be in the range of 1.02 dollars to 1.12 dollars. Adjusted diluted earnings per share are expected to be in the range of 1.30 dollars to 1.40 dollars. On a constant currency basis, adjusted earnings per share are expected in the range of 1.48 dollars to 1.58 dollars.

Picture:Wolverine

Wolverine Worldwide