Wolverine Worldwide Inc. (WWW), a manufacturer of work-related footwear and apparel, reported Tuesday a lower- than-expected profit and revenues for its third quarter, hurt by negative foreign exchange and ongoing macroeconomic challenges in Europe. Citing these, the company also trimmed its fiscal 2012 earnings and revenue view.
In pre-market activity, Wolverine shares lost $1.54 or 3.55 percent, and are currently trading at $41.87.
Third-quarter net earnings attributable to the company was $32.73 million or $0.66 per share, down from $40.44 million or $0.82 per share last year. Adjusted for $0.06 per share on recent acquisition of the Performance + Lifestyle Group, earnings were $0.72 per share. On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $0.73 per share for the quarter. Analysts' estimates typically exclude special items.
Revenue for the quarter was $353.07 million, 2.4 percent lower than the prior year's $361.59 million. Foreign exchange negatively impacted reported revenue by $5.4 million. Analysts expected $362.46 million for the quarter.
Wolverine said its revenue and adjusted earnings per share were in line with its expectations and reflected difficult macroeconomic and retail conditions in Europe, mitigated by strength in the United States.
Gross margin decreased 140 basis points to 39.2 percent, with the majority of the decrease driven by negative mix and higher product costs, partially offset by selling price increases and foreign exchange contract gains.
Further, for fiscal 2012, the company now expects earnings in the range of $2.26 to $2.31 per share excluding the impact of the PLG acquisition. The company last week said that it expects the contribution to earnings from the PLG acquisition in the 2012 stub period to be dilutive in the range of $0.25 to $0.30 per share.
The company's revised full-year 2012 revenue guidance is in the range of $1.425 billion to $1.435 billion, an increase of 1.1 percent to 1.8 percent over the prior year. Including PLG, full-year revenue would be in the range of $1.645 billion to $1.655 billion. Analysts expect earnings of $2.36 per share on revenues of $1.67 billion for fiscal 2012.
While announcing the second-quarter result, the company had expected full-year 2012 adjusted earnings per share of $2.70 to $2.80 and revenue of $1.46 billion to $1.50 billion that represented a year-over-year growth of 3.6 to 6.4 percent.
The midpoint of the revised full-year guidance implies fourth quarter revenue of approximately $441 million, a growth of 8.5 percent from last year, while analysts expect revenues of $673.27 million for the quarter.
According to the company, the downward revision in full-year forecast reflects its expectation that continued European macroeconomic turmoil would present challenges over the balance of the fiscal year while still expecting a stronger at-once order environment in its fourth fiscal quarter.
The company added that the estimate of 2013 earnings accretion from the acquisition, as said earlier, was raised to a range of $0.35 to $0.50 per share, and the estimate of 2014 earnings accretion was raised to a range of $0.60 to $0.80 per share.
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