Wolverine World Wide Inc.’s shares are in well into the green — up nearly 9 percent, to $26.51 as of 12:10 p.m. — after the firm announced today that it beat analysts’ Q1 sales and earnings estimates and acquired the domain site onlineshoes.com.
Amid aggressive store closures — part of its “Way Forward” plan — the owner of Sperry, Keds, Saucony and other popular shoe brands said its Q1 sales dipped 4.8 percent, to $591.3 million, but significantly surpassed analysts’ estimates for sales of $557.8 million. (Wolverine has closed 180 stores since the beginning of 2017. All Stride Rite and Track-N-Trail concept stores are now closed and the company plans to close 30 to 40 more stores by year end. The company plans to eventually close all of its Stride Rite stores.)
Net earnings also fell 4.5 percent, to $16.8 million, or 17 cents per diluted share, during the period. But, adjusted earnings per share, at 37 cents — or 40 cents per share on a constant-currency basis — were better than market watchers’ forecast for diluted EPS of 31 cents.
Wolverine chairman, president and CEO Blake Krueger noted during the firm’s conference call that the firm recently completed a strategic review of its existing portfolio and has been exploring a variety of alternatives for several brands. Accordingly, Wolverine’s latest buy of the onlineshoes.com domain and its consumer database is part of a move toward building a stronger portfolio.
“This work is continuing, and we expect some announcements in the very near future,” Kruegar said. “ … We remain active in assessing the strategic fit of new brands and businesses to where portfolio as our M&A activities have historically provided significant profitable growth for the company.”
Of the onlineshoes.com buy, he noted: “Last year, online shoes.com had over 35 million site visits and has a database of nearly 4 million consumers. We believe leveraging this existing traffic and consumer database will enable us to accelerate growth across our portfolio of brands. We will continue to look for new and innovative ways to drive growth, consumer connections, and ultimately, shareholder value by actively managing our portfolio.”
Based on a “strong start” to the fiscal year, Wolverine also said today that it has raised its adjusted earnings guidance for the year. Adjusted diluted EPS are now expected in the range of $1.50 to $1.60, compared with prior guidance for a range of $1.45 to $1.55.