Wolverine World Wide reported a 23.2 percent increase in net income to $16,263,000 million for its 1st quarter ended March 26 as revenues rose by 9.0 percent to $245.17 million. Operating profit reached $24,274,000, up from $19,104,000, while the gross margin improved by 1.3 percentage points to reach a record of 39.3 percent, thanks primarily to increased sales of higher-margin lifestyle products and a positive impact from foreign currencies.
Investments in product development and marketing efforts were increased throughout the group, while expenses were slightly reduced as a percentage of revenues. Europe contributed significantly to the improvement in sales and earnings. In the USA, Wolverine Boots and Shoes had significant earnings improvement led by the performance of the Wolverine MultiShox line. Hush Puppies and CAT Footwear also had double-digit sales increases due to a stronger focus on brand development.
Merrell, which continues to lead the group in terms of sales and profit growth, had a 14 percent sales boost, with the strongest increases coming from the US business and the success of its Merrell Continuum concept. Sebago improved its sales by 18 percent globally, contributing to a 15 percent increase for the group’s outdoor brands overall.
Merrell’s sport fashion business in Europe performed well, and the group expects this trend to take off in the USA, too. Sell-throughs were also strong in the USA and overseas for Merrell’s performance and casual segments. Its boot business tends to perform better in London, and the company regards this as a good indicator for Caterpillar Footwear;
The overall order backlog is up 11 percent, as compared to a year ago, and that of the outdoor group climbed by even more. On the strength of the 1st quarter results, the company has revised upwards its estimates for 2005, anticipating revenues to range from $1.045 billion to $1.065 billion for the year, generating earnings per share in a range from $1.22 to $1.27.