Wolverine World Wide (WWW) Reports In-Line Q4 EPS, Slight Miss on Revenues; Offers FY18 EPS/Revenue Outlook In-Line with Estimates

Wolverine World Wide (NYSE: WWW) reported Q4 EPS of $0.41, in-line with the analyst estimate of $0.41. Revenue for the quarter came in at $578 million versus the consensus estimate of $580.26 million.

Fourth Quarter Results

• Reported revenue of $578.6 million decreased 20.7% during the fourth quarter, or decreased 7.1% after taking into effect the quarterly calendar change. Underlying revenue increased 1.7%, including nearly 18% underlying growth for Merrell.
• Reported gross margin was 38.4%, compared to 36.6% in the prior year. Adjusted gross margin on a constant currency basis was 38.5%, compared to 37.1% in the prior year, reflecting an improvement of 140 basis points despite a 50 basis point negative mix impact from store closures.
• Reported operating margin was -12.7%, compared to 2.1% in the prior year. Adjusted operating margin on a constant currency basis was 10.7% compared to 8.1% in the prior year.
• Reported diluted loss per share was $0.65, compared to a diluted loss per share of $0.02 in the prior year. The reported results include restructuring and transformation costs ($0.24) and other special charges recorded in the quarter for the non-cash impairment of the Sperry indefinite lived trade name ($0.45), environmental and other related costs ($0.28), and the impact of tax reform ($0.09). Adjusted diluted earnings per share were $0.41 compared to $0.34 in the prior year, an increase of 20%.

2018 OUTLOOK

• Revenue in the range of $2.24 billion to $2.32 billion, a reported decline of 1.3% and underlying growth of nearly 6% at the high-end of the range.
• Gross margin expansion in the range of 40 to 80 basis points, despite a negative mix impact of 20 basis points from 2017 store closures.
• Reported operating margin of 11.6% and adjusted operating margin of 12%, inclusive of incremental investments in the Company\'s GLOBAL GROWTH AGENDA.
• An effective tax rate in the range of 18% to 21%, reflecting new U.S. tax laws.
• Reported diluted earnings per share in the range of $1.87 to $1.97 and adjusted diluted earnings per share of $1.95 to $2.05, an increase of 25% at the high-end of the range. Foreign currency is expected have a neutral impact on earnings.
• Cash from operations in the range of approximately $230 million to $250 million.
• A 33% increase in the annual dividend.

GUIDANCE:

Wolverine World Wide sees FY2018 EPS of $1.95-$2.05, versus the consensus of $1.99. Wolverine World Wide sees FY2018 revenue of $2.24-2.32 million, versus the consensus of $2.28 million.

For earnings history and earnings-related data on Wolverine World Wide (WWW) click here.

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