Wolverine (WWW) reported earnings on Wed 10 May 17 (b/o)

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** charts after earnings **

 

Wolverine beats by $0.06, beats on revs; guides FY17 EPS above consensus, revs above consensus :

• Reports Q1 (Mar) earnings of $0.37 per share, excluding non-recurring items, $0.06 better than the Capital IQ Consensus of $0.31; revenues rose 2.4% year/year to $591.3 mln vs the $557.53 mln Capital IQ Consensus.
• Co issues upside guidance for FY17, sees EPS of $1.50-1.60, excluding non-recurring items, vs. $1.51 Capital IQ Consensus Estimate; sees FY17 revs of $2.27-2.37 bln vs. $2.32 bln Capital IQ Consensus Estimate.
  • Reported operating margin in the range of 5.2% to 5.9% and adjusted operating margin in the range of 10.2% to 10.7%, resulting from operational excellence initiatives focused on supply chain optimization, omnichannel transformation, and operational efficiencies.
• Wolverine Way Forward Transformation Update
  • The WOLVERINE WAY FORWARD transformation includes key operational excellence initiatives with incremental operating profit benefits, further solidifying the Company's confidence in achieving its stated goal of 12% adjusted operating margin by the end of 2018.
  • The previously announced Store Restructuring Plan has accelerated, with 180 stores now closed since the beginning of 2017. The Company incurred approximately $9.2 million of operating losses in Q1 2017 for stores within the Plan that will not reoccur next year. The losses include $4.4 million of inventory mark-downs related to accelerated store closures. All Stride Rite and Track-N-Trail concept stores are now closed. These store closures allowed the Company to liquidate inventory totaling approximately $20 million during the quarter.
• "We are pleased to deliver better-than-expected results for the first quarter, demonstrating the success of our strategy focused on operational excellence, growth and speed," stated Mike Stornant, Senior Vice President and Chief Financial Officer. "Our proactive efforts aimed at overcoming the challenging global market conditions paid off in Q1, with nearly all brands in the portfolio exceeding their revenue plans for the quarter, while also over-delivering on our operating profit goals. We made tremendous progress on our store realignment plan including the closure of all Stride Rite stores, and now have line-of-sight to our go-forward store-fleet. We managed our working capital well in the quarter, with inventory down over 25% and DSOs improving by 1.1 days. We believe the strength of our global brands combined with the continued discipline in the management of our business and implementation of our WOLVERINE WAY FORWARD plan leaves us well placed to achieve our goals."