Wolverine World Wide (NYSE: WWW) reported Q1 EPS of $0.49, $0.02 better than the analyst estimate of $0.47. Revenue for the quarter came in at $523.4 million versus the consensus estimate of $533.3 million.

FIRST-QUARTER 2019 REVIEW

• Reported revenue of $523.4 million decreased 2.0% during the first quarter and adjusting for currency, decreased 0.9%.
• Reported gross margin was 42.1%, as compared to 42.7% in the prior year.
• Reported operating margin was 10.0%. Adjusted operating margin was 10.9% as compared to 12.0% in the prior year.
• The reported tax rate was 13.2%, as compared to 15.1% in the prior year.
• Reported diluted earnings per share was $0.43, compared to $0.48 in the prior year. Adjusted diluted earnings per share was $0.49 compared to $0.50 in the prior year.
• Inventories increased 28.7% compared to the prior year, approximately 7% higher than expected, mostly due to Sperry. The quality of inventory remains very high, with both aged and close-out inventory declining compared to the prior year.
• The Company repurchased $103.1 million of shares in the quarter at an average price of $35.65, and has approximately $325 million available under its recently-approved $400 million share repurchase program.
• The Company's Board of Directors declared a 25% increase in the quarterly dividend, which follows a 33% increase in the prior year.
• During the first quarter, the brands that were formerly part of the Wolverine Outdoor & Lifestyle Group and Wolverine Heritage Group were realigned into a newly formed Wolverine Michigan Group.

“We are pleased to report first quarter earnings per share which exceeded our expectations,” said Blake Krueger, Wolverine World Wide’s Chairman, Chief Executive Officer and President. “Four of our top-five brands delivered revenue above plan during the quarter, including Merrell and Saucony, and our owned eCommerce business continued to be robust, growing 28% over the prior year. This strength helped to offset some unforeseen challenges at Sperry and the late start to Spring which impacted certain product categories. Overall revenue declined less than 1% during the quarter on a constant-currency basis. We expect revenue growth to resume in the second quarter and accelerate during the second half of the year as we continue to invest in a variety of initiatives to drive topline growth and attractive earnings leverage.”

"Our diversified portfolio was an asset during the quarter as several brands experienced attractive revenue growth, which helped to offset the macro headwinds faced in other parts of the business,” stated Mike Stornant, Senior Vice President and Chief Financial Officer. “We remain committed to making key investments to drive revenue growth as part of our Global Growth Agenda, including a new joint venture in China, acquiring a European distributor, expanding our store base for key brands and significantly enhancing the work environment of our corporate headquarters. We also remain focused on leveraging our strong liquidity and financial position to drive overall shareholder return."

GUIDANCE:

Wolverine World Wide sees FY2019 EPS of $2.20-$2.35, versus the consensus of $2.32. Wolverine World Wide sees FY2019 revenue of $2.28-2.33 billion, versus the consensus of $2.31 billion.

• Revenue is still 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 still 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 now expected to be in the range of 11.3% to 11.6% and adjusted operating margin is still expected in the range of 12.2% to 12.6%, including approximately $40 million of on-going investments to support the Company’s Global Growth Agenda.
• The effective tax rate is now expected to be between 18.5% and 19.0%.
• Diluted weighted average shares are now expected to be approximately 91 million.
• Reported diluted earnings per share are now expected to be between $2.00 and $2.15 and adjusted diluted earnings per share are still expected to be between $2.20 and $2.35.
• Cash flow from operations is now projected to be in the range of $195 million to $215 million.

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