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  • Wolverine Worldwide FY14 revenues up 2.6 percent

Wolverine Worldwide FY14 revenues up 2.6 percent

By Prachi Singh

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Business |REPORT

Wolverine Worldwide, for the fiscal year ended January 3, 2015 reported consolidated revenue of 2.76 billion dollars, representing growth of 2.6 percent versus prior year revenue of 2.69 billion dollars. High single-digit growth from the Heritage Group and mid-single-digit growth from the Performance Group were partially offset by the expected low single-digit revenue decline from the Lifestyle Group.

For the fourth quarter, consolidated revenue increased to 808.9 million dollars, representing growth of 9.2 percent against prior year revenue of 740.8 million dollars, with each of the company's three brand operating groups contributing to the quarter's revenue growth. On a constant currency basis, revenue grew 10.1 percent.

“We had a strong close to the year, with nine of our 16 brands generating double-digit revenue growth in the fourth quarter, and our two largest brands, Merrell and Sperry, delivering mid-single-digit and high single-digit revenue growth, respectively,” commented Blake W. Krueger, Wolverine Worldwide's Chairman, Chief Executive Officer and President.

Gross margin was 37.1 percent, a decrease of 10 basis points versus prior year reported gross margin and a decrease of 110 basis points versus prior year adjusted gross margin. Adjusted operating expenses were 247.1 million dollars, an increase of 0.6 percent. Adjusted diluted earnings per share increased 36.4 percent to 0.30 dollars, compared to an adjusted 0.22 dollars per share in the prior year. Reported diluted earnings per share were 0.10 dollars, compared to a loss of 0.02 dollars per share in the prior year.

Adjusted gross margin for the full year decreased 40 basis points to 39.4 percent and reported gross margin decreased 30 basis points to 39.3 percent. Adjusted operating expenses were 815.2 million dollars, a decrease of 1.8 percent versus the prior year. Adjusted diluted earnings per share increased 13.3 percent to 1.62 dollars, compared to 1.43 dollars per share in the prior year. Reported diluted earnings per share were 1.30 dollars, compared to 0.99 dollars per share in the prior year.

Commenting on the results, Don Grimes, Senior Vice President and Chief Financial Officer said, “Double-digit revenue growth in Asia Pacific, high single-digit growth in EMEA and mid-single-digit growth in Latin America - important regions for future growth across our portfolio - were partially offset by flat revenue in the US and a low single-digit decline in Canada, with the latter significantly impacted by foreign currency headwinds.”

In order to capitalize on opportunities for accelerated growth around the world, last month the company announced plans to significantly increase brand-building investments in fiscal 2015. For 2015, the company now expects consolidated reported revenue in the range of 2.82 billion dollars to 2.87 billion dollars, representing growth in the range of approximately 2 percent to 4 percent versus the prior year, reflecting negative foreign exchange, the impact of retail store closures associated with the company's realignment plan and the exit of the Patagonia Footwear license. Constant currency revenue growth is expected in the range of approximately 5 percent to 7 percent.

Adjusted diluted earnings per share in the range of 1.53 dollars to 1.60 dollars, reflecting the incremental brand-building investments, higher pension expense and the negative impact of foreign exchange. Constant currency adjusted earnings per share is expected in the range of 1.71 dollars to 1.78 dollars and reported diluted earnings per share is expected in the range of 1.46 dollars to 1.53 dollars.

Wolverine Worldwide