Wolverine World Wide (NYSE: WWW) reported Q4 EPS of $0.52, $0.03 better than the analyst estimate of $0.49. Revenue for the quarter came in at $579.6 million versus the consensus estimate of $581.91 million.

“Our Global Growth Agenda gained momentum in the fourth quarter, with underlying revenue growing 4.6% on a constant currency basis. This was the highest quarterly revenue growth of the year driven by our two largest brands Merrell and Sperry,” said Blake Krueger, Wolverine World Wide’s Chairman, Chief Executive Officer and President. “For the full-year, we achieved attractive underlying revenue growth and our efficient business model allowed us to deliver significant profit leverage including record gross margin and earnings. Looking forward into 2019, we expect to build on this momentum and continue to invest in a variety of initiatives to drive revenue growth and continued earnings leverage."

FOURTH-QUARTER 2018 REVIEW

• Reported revenue of $579.6 million increased 0.2% during the fourth quarter. Underlying revenue increased 3.8% and further adjusting for currency, increased 4.6%.
• Reported gross margin was 39.2%, as compared to 38.4% in the prior year. On an adjusted basis, gross margin expanded 70 basis points compared to the prior year.
• Reported operating margin was 9.3%. Adjusted operating margin was 10.7%, a decrease of 30 basis points compared to the prior year.
• The reported tax rate of 4.0% in the quarter was favorably impacted by tax reform.
• Reported diluted earnings per share was $0.40, compared to a loss per share of $0.65 in the prior year. Adjusted diluted earnings per share was $0.52 compared to $0.41 in the prior year, an increase of 27%.
• The Company repurchased nearly $105 million of shares in the quarter at an average price of $33.35.
• In December, the Company refinanced its debt, which combined with the debt reduction during 2018 is expected to result in approximately $2.5 million of interest savings in 2019 and provides greater flexibility for uses of cash.
• During the fourth quarter, the Company completed a pension annuity buyout, reducing the Company's defined benefit pension liabilities by approximately $67 million, or 20%. The Company’s pension plans are essentially fully funded as of December 29, 2018.

GUIDANCE:

Wolverine World Wide sees FY2019 EPS of $2.20-$2.35, versus the consensus of $2.35. Wolverine World Wide sees FY2019 revenue of $2.28-2.33 billion, versus the consensus of $2.33 billion.

• Revenue is expected to be in the range of $2.28 billion to $2.33 billion, representing growth of 3.0% at the mid-point of the range.
• Gross margin is expected to be in the range of 41.3% to 41.8%, up 45 basis points at the mid-point of the range.
• Reported operating margin is expected to be in the range of 11.4% to 11.8% and adjusted operating margin in the range of 12.2% to 12.6%, including $40 million of on-going investments to support the Company’s Global Growth Agenda.
• The effective tax rate is expected to be approximately 19.0%.
• Diluted weighted average shares are expected to be approximately 93 million.
• Reported diluted earnings per share are expected to be between $2.03 to $2.18 and adjusted diluted earnings per share are expected to be between $2.20 to $2.35.
• Cash flow from operations is projected to be in the range of $200 million to $220 million.

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