Wolverine Worldwide's three biggest brands – Merrell, Sperry and Saucony – posted a combined 11.5 percent increase in constant currencies during the third quarter ended on Sept. 28. Revenues rose by only 2.8 percent to $574.3 million across the group's entire portfolio of 12 footwear brands, with growth of 3.6 percent local currencies, due in part to the timing of international shipments for Cat Footwear.
The management is predicting a currency-neutral increase of 7 percent in the fourth quarter, with the three main brands going up altogether by around 9 percent.
Merrell and Cat are part of Wolverine's so-called Michigan Group, whose total sales went down by 1.9 percent in constant currencies in spite of a high single-digit increase for Merrell, with gains in the U.S., Canada and EMEA. Sales went up in all the categories, including lifestyle, with exceptional growth in the Nature's Gym segment. Merrell's online sales grew by almost 20 percent.
The so-called Boston Group had a 13.3 percent sales boost on a currency-neutral basis, with gains by all four of its brands. In particular, Sperry enjoyed low-teen growth, driven by boots and vulcanized shoes, but its boat shoe business stabilized in the U.S.
The management is planning to apply its successful “growth agenda” to other brands in its portfolio such as Hush Puppies, which is very profitable.
The group is anticipating an overall sales increase of 3 percent for the full year, with the gross margin matching last year's record level of 41.0 percent and the adjusted operating margin reaching a level of 12.0 percent. In the latest quarter, the gross margin rose by 0.8 percentage points to 41.6 percent and the adjusted operating margin expanded by 1.5 percentage points to 14.1 percent.
Higher margins than before are being generated in the company's offline and online direct-to-consumer operations, which have come to represent between 12 and 13 percent of sales.
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