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Wolverine World Wide Inc. Reports Operating Results (10-Q)

July 26, 2012 | About:
10qk

10qk

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Wolverine World Wide Inc. (WWW) filed Quarterly Report for the period ended 2012-06-16.

Wolverine World Wide, Inc. has a market cap of $2.09 billion; its shares were traded at around $45.12 with a P/E ratio of 18.4 and P/S ratio of 1.5. The dividend yield of Wolverine World Wide, Inc. stocks is 1.1%. Wolverine World Wide, Inc. had an annual average earning growth of 9.1% over the past 10 years. GuruFocus rated Wolverine World Wide, Inc. the business predictability rank of 3-star.

Highlight of Business Operations:

Revenue for the second quarter of fiscal 2012 increased $2.6 million to $312.7 million from the second quarter of fiscal 2011, as growth in the Companys consumer-direct channel and growth in the United States wholesale business was partially offset by ongoing challenges in the European market. Changes in foreign exchange rates decreased reported revenue for the second quarter of fiscal 2012 by $3.8 million. Revenue from the other business units increased $2.9 million, due to a mid teen percentage increase in revenue from the Companys consumer-direct channel partially offset by a mid single digit decline in the Leathers business. International revenue decreased to 36.2% of total revenue in the second quarter of fiscal 2012 compared to 39.8% in the second quarter of fiscal 2011 primarily due to double digit decreases in Europe and Canada.

The Companys effective tax rate in the second quarter of fiscal 2012 was 7.0%, compared to 25.7% in the second quarter of fiscal 2011. The lower effective tax rate in the second quarter of fiscal 2012 reflects the benefits of a favorable court decision in a foreign tax jurisdiction supporting the Companys long-term global tax planning strategies. This ruling resulted in a decrease of income tax expense in the amount of $3.3 million in the second quarter of fiscal 2012. The Company maintains certain strategic management and operational activities in overseas subsidiaries, and its foreign earnings are taxed at rates that are generally lower than the U.S. federal statutory income tax rate. A significant amount of the Companys earnings are generated by its Canadian, European and Asia Pacific subsidiaries and, to a lesser extent, in jurisdictions that are not subject to income tax and free trade zones where the Company owns manufacturing operations. The Company has not provided for U.S. taxes for earnings generated in foreign jurisdictions because it plans to reinvest these earnings indefinitely outside the U.S. However, if certain foreign earnings previously treated as permanently reinvested are repatriated, the additional U.S. tax liability could have a material adverse effect on the Companys after-tax results of operations and financial position.

As a result of the previously described lower gross margin and higher operating expenses, partially offset by the lower effective tax rate, net earnings attributable to Wolverine World Wide, Inc. decreased $3.5 million, or 14.6%, to $20.5 million in the second quarter of fiscal 2012 compared to $24.0 million in the second quarter of 2011.

Revenue for the first two quarters of fiscal 2012 decreased $5.5 million from the first two quarters of fiscal 2011, to $635.5 million. Macroeconomic challenges in the European market more than offset growth in both the consumer-direct business and the U.S. wholesale business. Changes in foreign exchange rates decreased reported revenue for the first two quarters of fiscal 2012 by $5.9 million. Revenue from the other business units increased $4.3 million, led by solid growth in the consumer-direct business. International revenue decreased to 37.5% of total revenue in the first two quarters of fiscal 2012 compared to 40.3% in the first two quarters of fiscal 2011 primarily due to a decrease in the low teens in Europe and a high single digit decrease in Canada.

As a result of the revenue, gross margin and operating expense changes discussed above, net earnings attributable to Wolverine World Wide, Inc. was $51.7 million in the first two quarters of fiscal 2012 compared to $59.8 million in the first two quarters of fiscal 2011, a decrease of $8.1 million, or 13.5%.

Read the The complete Report

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