Net income rose by 18.4 percent to $11.0 million at Wolverine World Wide for the 2nd quarter ended June 19. Gross margins rose by 230 basis points to 38.0 percent, partly due to lower off-price sales and to the closing of a Mexican factory last year. Total sales went up by 8 percent sales to $198.8 million with increases in all the divisions except for Caterpillar footwear and the Wolverine boot business.

CAT’s sales were down mainly because of weakness in Europe, which represents nearly half of the line’s total sales, whereas the brand rose modestly in the USA and rose quite strongly with international distributors. WWW reports very strong results for Hush Puppies in the UK and continued strong growth for Merrell in Europe, but overall, the group’s European sales declined by 0.8 percent in dollar terms and by 2.3 percent in local currencies during the quarter. Sales in North America were instead up by 4.0 percent.

Merrell grew at a double-digit rate in both the USA and Europe, delivering significantly higher profits, but the rate of sales growth dipped to 11 percent from the 25 percent gain recorded in the 1st quarter because of the customers’ tendency to pre-book a higher percentage of their business. The best-sellers in the line include lifestyle and casual products such as sandals and multi-sport fashion athletic models.

The recently acquired Sebago brand performed ahead of plan, recording a 4 percent sales gain for the quarter. After the closing of its remaining US manufacturing operations, the group has vastly extended its product range for the Spring/Summer 2005 season, adding new categories in the marine segment while freshening up the more classical boat shoe and dress casual styles. A Gore-Tex program is due to be delivered in the 4th quarter.

A double-digit sales gain is reported for the Hush Puppies brand in the latest quarter, thanks in part to an increase of almost 10 percent in the average selling price for the first half of the year. Sales increased also for Bates and Harley-Davidson footwear.

New management is expected to give a new impetus to the CAT footwear business. Alan Thomson has been appointed as the new managing director of Caterpillar Footwear for Europe following the departure of Stephen Palmer, the former European licensee of the brand who sold his business to Wolverine at the beginning of 2002. Thomson, 45, worked previously for Reebok and was recently in charge of European sales for Timberland. He will report to Blake Krueger, president of CAT footwear. At the same time, Martin Berendsen has left as US manager of Caterpillar Footwear but he has apparently not been replaced yet.