ROCKFORD, Mich., Nov. 8,
2017 /PRNewswire/ -- Wolverine World Wide, Inc. (NYSE: WWW) today
reported financial results for the third quarter ended September 30, 2017.
"We are very pleased to continue our positive momentum and
report third quarter revenue and earnings that surpassed
expectations. This marks the third consecutive quarter of strong
results for the Company," said Blake W.
Krueger, Wolverine Worldwide's Chairman, Chief Executive
Officer and President. "We continue to make excellent progress on
our enterprise wide strategic transformation, the WOLVERINE WAY
FORWARD, including the recently announced sale of our Department of
Defense business. Our third quarter results are reflective of this
progress. This transformation is focused on elevating our most
powerful brands with consumers, delivering continuous product
innovation and sustained organic growth, and unlocking incremental
operational efficiencies, all with an emphasis on pace and speed.
We believe that the WOLVERINE WAY FORWARD will enable us to drive
global growth in the "new normal" fast-changing global consumer
retail environment."
THIRD-QUARTER 2017 REVIEW
The highlights of the
Company's third quarter financial performance are summarized below.
The third quarter revenue and earnings per share amounts reflect
the Company's revised quarterly calendar. To provide a better
comparison to fiscal 2016, the Company has provided additional
information regarding the impact of the calendar change within the
reconciliation tables accompanying the earnings release.
- Reported revenue of $581.3
million decreased 3.7% during the third quarter, but
adjusted revenue decreased 8.0% after taking into effect the
quarterly calendar change. Underlying revenue increased 1.1%.
- Reported gross margin was 39.7%, compared to 39.3% in the prior
year. Adjusted gross margin on a constant currency basis was 40.4%,
compared to 39.1% in the prior year, reflecting an improvement of
130 basis points despite a 90 basis point negative mix impact from
store closures.
- Reported operating margin was 6.1%, compared to 11.4% in the
prior year. Adjusted operating margin on a constant currency basis
was 11.9% compared to 10.5% in the prior year.
- Reported diluted earnings per share were $0.24, compared to $0.49 in the prior year. Adjusted diluted
earnings per share were $0.43. On a
constant currency basis, adjusted earnings per share were
$0.45, compared to $0.45 in the prior year.
- Inventory at the end of the quarter was down 26.0% versus the
prior year.
- The Company repurchased 1,139,256 shares in the third quarter
for approximately $30 million at an
average price of $26.33 per
share.
"Our proactive efforts, which began eighteen months ago, have
gained traction leading to better-than-expected results. This is
best demonstrated by solid revenue performance across our portfolio
with most brands exceeding our revenue expectations and
over-delivering on our operating profit targets for the quarter,"
stated Mike Stornant, Senior Vice
President and Chief Financial Officer. We managed our working
capital well, with inventory down 26% at quarter end versus the
prior year quarter. We believe the strength of our global brands
combined with the continued operational discipline and
implementation of the WOLVERINE WAY FORWARD leaves us well
positioned to achieve our near-term growth and adjusted operating
margin goals. We now expect full-year fiscal 2018 operating margin
of 12%, ahead of our originally stated goal.
WOLVERINE WAY FORWARD TRANSFORMATION UPDATE
The
Company continued to make progress on its comprehensive portfolio
management initiatives including the following items:
- In addition to the license of the Stride Rite brand to Vida
Shoes International and the sale of the Sebago Brand announced
earlier in the third quarter, on September
29, 2017, the Company sold its Department of Defense
contract business and certain associated assets.
- The Company also continued to make progress in realigning its
retail store fleet under the previously announced Store
Restructuring Plan. The Company has closed 188 stores since the
beginning of 2017. The Company expects an additional 27 store
closings before the end of fiscal 2017, leaving a remaining retail
store fleet of approximately 80 stores.
- The Company continues to prioritize growth and innovation by
accelerating its investments in product innovation, consumer
insights, demand creation, and the digital/social space. The
Company also plans to focus on key international growth markets as
it evolves its global footprint.
FISCAL 2017 OUTLOOK
A strong third quarter, coupled
with some stable trends in the business, have resulted in the
following update to the Company's full-year 2017 outlook:
- We are narrowing our revenue outlook to the upper end of our
prior range and now expect reported revenue of $2.340 billion to $2.370 billion. This is a
reported decline of approximately 6.2% to 5.0%, but underlying
revenue is expected to be within the range of flat to growth of
1.5%, reflecting approximately $160.0
million revenue impact from retail store closures and the
Stride Rite transition.
- Reported operating margin in the range of 5.0% to 5.4% and
adjusted operating margin in the range of 10.6% to 10.9%, resulting
from operational excellence initiatives focused on supply chain
optimization, omnichannel transformation, and operational
efficiencies. Fiscal 2016 adjusted operating margin was 8.5%.
- Reported diluted earnings per share in the range of
$0.76 to $0.81 compared to
$0.89 in fiscal 2016. Adjusted
diluted earnings per share are now expected in the range of
$1.60 to $1.65 compared to
$1.36 in fiscal 2016 adjusted on the
same basis. On a constant currency basis, adjusted earnings per
share in the range of $1.67 to
$1.72.
FISCAL YEAR CALENDAR CHANGE
Prior to fiscal 2017, the
Company reported its quarterly results of operations on the basis
of 12-week periods for each of the first three fiscal quarters and
a 16 or 17-week period for the fiscal fourth quarter. Beginning in
fiscal 2017, the Company's fiscal year is comprised of 13-week
quarters for each of the first three fiscal quarters and a 13 or
14-week period for the fiscal fourth quarter. There is no change to
the Company's fiscal year-end date. References to the "quarter
ended" or "third quarter" refer to the 13-week period ended
September 30, 2017 or the 12-week
period ended September 10, 2016.
NON-GAAP FINANCIAL MEASURES
This earnings release
contains certain non-GAAP financial measures. References to
"underlying" revenue indicate reported revenue adjusted for the
impact of foreign exchange, closed retail stores, the transition of
Stride Rite® to a license business model and the
impact of the additional week of operations. Measures referred to
as "adjusted" financial results exclude restructuring and
impairment costs, organizational transformation costs which include
gains or losses from divestitures, debt extinguishment and other
costs, and the impact of the additional week of operations. The
company has provided a reconciliation of the above of non-GAAP
financial measures to the most directly comparable GAAP financial
measure.
EARNINGS CALL INFORMATION
The Company will host a
conference call today at 8:30 a.m. Eastern
Time to discuss these results and current business
trends. The conference call will be broadcast live and
accessible under the "Investor Relations" tab at
wolverineworldwide.com. A replay of the conference call will
be available at the Company's website for a period of approximately
30 days.
ABOUT WOLVERINE WORLDWIDE
With a commitment to service
and product excellence, Wolverine World Wide, Inc. is one of the
world's leading marketers and licensors of branded casual, active
lifestyle, work, outdoor sport, athletic, children's and uniform
footwear and apparel. The Company's portfolio of highly
recognized brands includes: Merrell®,
Sperry®, Hush Puppies®, Saucony®,
Wolverine®, Keds®, Stride Rite®,
Chaco®, Bates®, and HYTEST®.
The Company also is the global footwear licensee of the popular
brands Cat® and Harley-Davidson®. The
Company's products are carried by leading retailers in the U.S. and
globally in approximately 200 countries and territories. For
additional information, please visit our website,
wolverineworldwide.com.
FORWARD-LOOKING STATEMENTS
This press release contains
forward-looking statements, including statements regarding: the
Company's ability to successfully execute key strategic
initiatives, elevate brands with consumers, and deliver product
innovation, organic and global growth and operational efficiencies;
future store closures and the effect of these closures; the ability
to complete the novation of the Department of Defense contracts in
2017 or at all; the Company's fiscal 2017 outlook and guidance; and
the Company's outlook regarding 2018 adjusted operating margin. In
addition, words such as "guidance," "estimates," "anticipates,"
"believes," "forecasts," "step," "plans," "predicts," "focused,"
"projects," "is likely," "expects," "intends," "should," "will,"
"confident," variations of such words, and similar expressions are
intended to identify forward-looking statements. These
statements are not guarantees of future performance and involve
certain risks, uncertainties, and assumptions ("Risk Factors") that
are difficult to predict with regard to timing, extent, likelihood,
and degree of occurrence. Risk Factors include, among
others: changes in general economic conditions, employment
rates, business conditions, interest rates, tax policies and other
factors affecting consumer spending in the markets and regions in
which the Company's products are sold; the inability for any reason
to effectively compete in global footwear, apparel and
consumer-direct markets; the inability to maintain positive brand
images and anticipate, understand and respond to changing footwear
and apparel trends and consumer preferences; the inability to
effectively manage inventory levels; increases or changes in
duties, tariffs, quotas or applicable assessments in countries of
import and export; foreign currency exchange rate fluctuations;
currency restrictions; capacity constraints, production
disruptions, quality issues, price increases or other risks
associated with foreign sourcing; the cost and availability of raw
materials, inventories, services and labor for owned and contract
manufacturers; labor disruptions; changes in relationships with,
including the loss of, significant wholesale customers; the failure
of the U.S. Department of Defense to exercise future purchase
options or award new contracts, or the cancellation or modification
of existing contracts by the Department of Defense or other
military purchasers; risks related to the significant investment
in, and performance of, the Company's consumer-direct operations;
risks related to expansion into new markets and complementary
product categories as well as consumer-direct operations; the
impact of seasonality and unpredictable weather conditions; changes
in general economic conditions and/or the credit markets on the
Company's distributors, suppliers and customers; increase in the
Company's effective tax rates; failure of licensees or distributors
to meet planned annual sales goals or to make timely payments to
the Company; the risks of doing business in developing countries,
and politically or economically volatile areas; the ability to
secure and protect owned intellectual property or use licensed
intellectual property; the impact of regulation, regulatory and
legal proceedings and legal compliance risks, including compliance
with federal, state and local laws and regulations relating to the
protection of the environment, environmental remediation and other
related costs, and litigation or other legal proceedings relating
to the protection of the environment or environmental effects on
human health; the potential breach of the Company's databases, or
those of its vendors, which contain certain personal information or
payment card data; problems affecting the Company's distribution
system, including service interruptions at shipping and receiving
ports; strategic actions, including new initiatives and ventures,
acquisitions and dispositions, and the Company's success in
integrating acquired businesses, and implementing new initiatives
and ventures; the risk of impairment to goodwill and other acquired
intangibles; the success of the Company's consumer-direct
realignment initiatives; changes in future pension funding
requirements and pension expenses; and additional factors discussed
in the Company's reports filed with the Securities and Exchange
Commission and exhibits thereto. The foregoing Risk Factors, as
well as other existing Risk Factors and new Risk Factors that
emerge from time to time, may cause actual results to differ
materially from those contained in any forward-looking
statements. Given these risks and uncertainties, investors
should not place undue reliance on forward-looking statements as a
prediction of actual results. Furthermore, the Company
undertakes no obligation to update, amend, or clarify
forward-looking statements.
WOLVERINE WORLD
WIDE, INC.
|
CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
(In millions,
except per share data)
|
|
|
13 Weeks Ended
September 30,
2017
|
|
12 Weeks Ended
September 10,
2016
|
|
39 Weeks Ended
September 30,
2017
|
|
36 Weeks Ended
September 10,
2016
|
Revenue
|
$
|
581.3
|
|
|
$
|
603.7
|
|
|
$
|
1,771.4
|
|
|
$
|
1,765.0
|
|
Cost of goods
sold
|
349.4
|
|
|
366.1
|
|
|
1,070.8
|
|
|
1,068.1
|
|
Restructuring
costs
|
1.2
|
|
|
0.3
|
|
|
8.3
|
|
|
4.2
|
|
Gross
profit
|
230.7
|
|
|
237.3
|
|
|
692.3
|
|
|
692.7
|
|
Gross
margin
|
39.7
|
%
|
|
39.3
|
%
|
|
39.1
|
%
|
|
39.2
|
%
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
172.4
|
|
|
167.4
|
|
|
529.6
|
|
|
534.5
|
|
Restructuring and
impairment costs
|
23.0
|
|
|
0.9
|
|
|
65.6
|
|
|
13.4
|
|
Operating
expenses
|
195.4
|
|
|
168.3
|
|
|
595.2
|
|
|
547.9
|
|
Operating expenses
as a % of revenue
|
33.6
|
%
|
|
27.9
|
%
|
|
33.6
|
%
|
|
31.0
|
%
|
|
|
|
|
|
|
|
|
Operating
profit
|
35.3
|
|
|
69.0
|
|
|
97.1
|
|
|
144.8
|
|
Operating
margin
|
6.1
|
%
|
|
11.4
|
%
|
|
5.5
|
%
|
|
8.2
|
%
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
8.6
|
|
|
8.6
|
|
|
23.4
|
|
|
24.9
|
|
Debt extinguishment
and other costs
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
Other expense
(income), net
|
(0.4)
|
|
|
—
|
|
|
3.4
|
|
|
1.0
|
|
Total other
expenses
|
8.2
|
|
|
9.1
|
|
|
26.8
|
|
|
26.4
|
|
Earnings before
income taxes
|
27.1
|
|
|
59.9
|
|
|
70.3
|
|
|
118.4
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
4.3
|
|
|
11.7
|
|
|
10.2
|
|
|
28.5
|
|
Effective tax
rate
|
15.9
|
%
|
|
19.5
|
%
|
|
14.6
|
%
|
|
24.1
|
%
|
|
|
|
|
|
|
|
|
Net
earnings
|
22.8
|
|
|
48.2
|
|
|
60.1
|
|
|
89.9
|
|
|
|
|
|
|
|
|
|
Less: net earnings
(loss) attributable to
noncontrolling interests
|
(0.4)
|
|
|
—
|
|
|
(0.5)
|
|
|
0.3
|
|
Net earnings
attributable to Wolverine World Wide,
Inc.
|
$
|
23.2
|
|
|
$
|
48.2
|
|
|
$
|
60.6
|
|
|
$
|
89.6
|
|
Diluted earnings per
share
|
$
|
0.24
|
|
|
$
|
0.49
|
|
|
$
|
0.62
|
|
|
$
|
0.91
|
|
|
|
|
|
|
|
|
|
Supplemental
information:
|
|
|
|
|
|
|
|
Net earnings used to
calculate diluted earnings
per share
|
$
|
22.7
|
|
|
$
|
47.2
|
|
|
$
|
59.3
|
|
|
$
|
87.7
|
|
Shares used to
calculate diluted earnings per
share
|
95.8
|
|
|
96.9
|
|
|
96.0
|
|
|
96.3
|
|
Weighted average
shares outstanding
|
96.1
|
|
|
99.4
|
|
|
96.6
|
|
|
99.4
|
|
WOLVERINE WORLD
WIDE, INC.
|
CONSOLIDATED
CONDENSED BALANCE SHEETS
|
(Unaudited)
|
(In
millions)
|
|
|
September 30,
2017
|
|
September 10,
2016
|
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
|
342.7
|
|
|
$
|
530.9
|
|
Accounts receivables,
net
|
294.5
|
|
|
309.5
|
|
Inventories,
net
|
338.8
|
|
|
457.6
|
|
Other current
assets
|
44.0
|
|
|
42.6
|
|
Total current
assets
|
1,020.0
|
|
|
1,340.6
|
|
Property, plant and
equipment, net
|
142.2
|
|
|
148.8
|
|
Goodwill and other
indefinite-lived intangibles
|
1,103.0
|
|
|
1,115.2
|
|
Other non-current
assets
|
153.5
|
|
|
154.4
|
|
Total
assets
|
$
|
2,418.7
|
|
|
$
|
2,759.0
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Accounts payable and
other accrued liabilities
|
$
|
278.0
|
|
|
$
|
330.1
|
|
Current maturities of
long-term debt
|
48.8
|
|
|
393.5
|
|
Borrowings under
revolving credit agreements and other short-term notes
|
3.7
|
|
|
1.2
|
|
Total current
liabilities
|
330.5
|
|
|
724.8
|
|
Long-term
debt
|
744.2
|
|
|
657.7
|
|
Other non-current
liabilities
|
333.9
|
|
|
335.8
|
|
Stockholders'
equity
|
1,010.1
|
|
|
1,040.7
|
|
Total liabilities and
stockholders' equity
|
$
|
2,418.7
|
|
|
$
|
2,759.0
|
|
WOLVERINE WORLD
WIDE, INC.
|
CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(In
millions)
|
|
|
39 Weeks Ended
September 30, 2017
|
|
36 Weeks Ended
September 10, 2016
|
OPERATING
ACTIVITIES:
|
|
|
|
Net
earnings
|
$
|
60.1
|
|
|
$
|
89.9
|
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
28.0
|
|
|
30.0
|
|
Stock-based
compensation expense
|
19.1
|
|
|
15.3
|
|
Excess tax benefits
from stock-based compensation
|
—
|
|
|
(0.4)
|
|
Pension and SERP
expense
|
11.2
|
|
|
7.3
|
|
Restructuring and
impairment costs
|
73.9
|
|
|
17.6
|
|
Other
|
(102.3)
|
|
|
(17.0)
|
|
Changes in operating
assets and liabilities
|
(40.5)
|
|
|
0.5
|
|
Net cash provided by
operating activities
|
49.5
|
|
|
143.2
|
|
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
|
Additions to
property, plant and equipment
|
(28.7)
|
|
|
(34.4)
|
|
Proceeds from sale of
a business and other assets
|
38.0
|
|
|
—
|
|
Investment in joint
venture
|
—
|
|
|
(0.5)
|
|
Other
|
(4.1)
|
|
|
10.4
|
|
Net cash provided by
(used in) investing activities
|
5.2
|
|
|
(24.5)
|
|
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
|
Net borrowings under
revolving credit agreements and other short-term notes
|
0.3
|
|
|
1.2
|
|
Borrowings of
long-term debt
|
—
|
|
|
250.0
|
|
Payments on long-term
debt
|
(26.2)
|
|
|
(5.7)
|
|
Payments of debt
issuance and debt extinguishment costs
|
(0.1)
|
|
|
(3.4)
|
|
Cash dividends
paid
|
(17.4)
|
|
|
(17.7)
|
|
Purchase of common
stock for treasury
|
(51.5)
|
|
|
(11.4)
|
|
Purchases of shares
under employee stock plans
|
(5.2)
|
|
|
(4.7)
|
|
Proceeds from the
exercise of stock options
|
11.9
|
|
|
5.6
|
|
Excess tax benefits
from stock-based compensation
|
—
|
|
|
0.4
|
|
Contributions from
noncontrolling interests
|
0.8
|
|
|
2.2
|
|
Net cash provided by
(used in) financing activities
|
(87.4)
|
|
|
216.5
|
|
|
|
|
|
Effect of foreign
exchange rate changes
|
5.6
|
|
|
1.6
|
|
Increase (decrease)
in cash and cash equivalents
|
(27.1)
|
|
|
336.8
|
|
|
|
|
|
Cash and cash
equivalents at beginning of the year
|
369.8
|
|
|
194.1
|
|
Cash and cash
equivalents at end of the period
|
$
|
342.7
|
|
|
$
|
530.9
|
|
The following tables contain information regarding the non-GAAP
adjustments used by the Company in the presentation of its
financial results:
WOLVERINE WORLD WIDE, INC.
Q3 2017 RECONCILIATION TABLES
RECONCILIATION OF
REPORTED REVENUE GROWTH TO
|
UNDERLYING REVENUE
GROWTH*
|
(Unaudited)
|
(In
millions)
|
|
|
GAAP
Basis
|
|
Impact of
Additional
Week (1)
|
|
As Adjusted
Basis
|
|
Foreign Exchange
Impact
|
|
Adjustments
(2)
|
|
As Adjusted on
a Constant Currency Basis
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue - Fiscal 2017
Q3
|
581.3
|
|
|
|
|
$
|
581.3
|
|
|
$
|
(3.2)
|
|
|
|
|
$
|
578.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth
|
(3.7)
|
%
|
|
|
|
(8.0)
|
%
|
|
|
|
|
|
1.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue - Fiscal 2016
Q3
|
$
|
603.7
|
|
|
$
|
28.2
|
|
|
$
|
631.9
|
|
|
|
|
$
|
(59.9)
|
|
|
$
|
572.0
|
|
(1) Given the change in the
quarterly calendar resulting in the third quarter of fiscal 2017
containing 13 weeks ending September 30, 2017 and the third quarter
of fiscal 2016 containing 12 weeks ending September 10, 2016, the
Company quantified the impact of the change including the
additional week for a better comparison to the third quarter of
fiscal 2017.
|
(2)
Adjustments include the estimated impact from retail store closures
and the transition of Stride Rite® to a license
business model.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
REPORTED GROSS MARGIN TO ADJUSTED
|
GROSS MARGIN ON A
CONSTANT CURRENCY BASIS*
|
(Unaudited)
|
(In
millions)
|
|
|
GAAP
Basis
|
|
Impact of
Additional Week (1)
|
|
Restructuring
Costs
|
|
Foreign Exchange
Impact
|
|
As Adjusted on a
Constant Currency
Basis
|
|
|
|
|
|
|
|
|
|
|
Gross Profit - Fiscal
2017 Q3
|
$
|
230.7
|
|
|
|
|
$
|
1.2
|
|
|
$
|
1.8
|
|
|
$
|
233.7
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
39.7
|
%
|
|
|
|
|
|
|
|
40.4
|
%
|
|
|
|
|
|
|
|
|
|
|
Gross Profit - Fiscal
2016 Q3
|
$
|
237.3
|
|
|
$
|
9.6
|
|
|
$
|
0.3
|
|
|
|
|
$
|
247.2
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
39.3
|
%
|
|
|
|
|
|
|
|
39.1
|
%
|
(1) Given the change in the
quarterly calendar resulting in the third quarter of fiscal 2017
containing 13 weeks ending September 30, 2017 and the third quarter
of fiscal 2016 containing 12 weeks ending September 10, 2016, the
Company quantified the impact of the change including the
additional week for a better comparison to the third quarter of
fiscal 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
REPORTED OPERATING MARGIN TO ADJUSTED
|
OPERATING MARGIN
ON A CONSTANT CURRENCY BASIS*
|
(Unaudited)
|
(In
millions)
|
|
|
GAAP
Basis
|
|
Impact of
Additional
Week (1)
|
|
Foreign Exchange
Impact
|
|
Restructuring and
Impairment Costs
|
|
Organizational
Transformation Costs (2)
|
|
As Adjusted on a
Constant Currency Basis
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
-
Fiscal 2017 Q3
|
$
|
35.3
|
|
|
|
|
$
|
2.5
|
|
|
$
|
24.2
|
|
|
$
|
7.0
|
|
|
$
|
69.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
6.1
|
%
|
|
|
|
|
|
|
|
|
|
11.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit -
Fiscal 2016 Q3
|
$
|
69.0
|
|
|
$
|
(4.0)
|
|
|
|
|
$
|
1.2
|
|
|
$
|
—
|
|
|
$
|
66.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
11.4
|
%
|
|
|
|
|
|
|
|
|
|
10.5
|
%
|
(1) Given the change in the
quarterly calendar resulting in the third quarter of fiscal 2017
containing 13 weeks ending September 30, 2017 and the third quarter
of fiscal 2016 containing 12 weeks ending September 10, 2016, the
Company quantified the impact of the change including the
additional week for a better comparison to the third quarter of
fiscal 2017.
|
(2)
Organizational transformation costs include third party consulting
costs, gains and losses related to divestitures and costs related
to the Company's distribution center optimization.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
REPORTED DILUTED EPS TO ADJUSTED
|
DILUTED EPS ON A
CONSTANT CURRENCY BASIS*
|
(Unaudited)
|
|
|
GAAP Basis
EPS
|
|
Adjustments
(1)
|
|
As Adjusted
EPS
|
|
Foreign
Exchange
Impact
|
|
As Adjusted
EPS On a
Constant
Currency Basis
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2017
Q3
|
$
|
0.24
|
|
|
$
|
0.19
|
|
|
$
|
0.43
|
|
|
$
|
0.02
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2016
Q3
|
$
|
0.49
|
|
|
$
|
(0.04)
|
|
|
$
|
0.45
|
|
|
|
|
|
(1) Fiscal 2017
adjustments include the impact of restructuring and impairment
costs and organizational transformation costs. Fiscal 2016
adjustments include the impact of restructuring and impairment
costs and the impact of the quarterly calendar change.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 GUIDANCE RECONCILIATION TABLES
RECONCILIATION OF
FISCAL 2017 FULL-YEAR REPORTED REVENUE GROWTH
|
GUIDANCE TO
UNDERLYING REVENUE GROWTH GUIDANCE*
|
(Unaudited)
|
(In
millions)
|
|
|
GAAP
Basis
Full-Year
Revenue
|
|
Foreign Exchange
Impact
|
|
Adjustments
(1)
|
|
Underlying
Full-
Year Revenue
|
|
|
|
|
|
|
|
|
Fiscal 2017 Revenue
Guidance
|
$
2,340 - 2,370
|
|
$
|
—
|
|
|
|
|
$
2,340 - 2,370
|
Fiscal 2016
Revenue
|
$
|
2,494.6
|
|
|
|
$
|
(160.0)
|
|
|
$
|
2,334.6
|
Percentage growth
(decline)
|
(6.2) -
(5.0)%
|
|
|
|
|
|
0.2 -
1.5%
|
(1)
Adjustments include the estimated impact from retail store closures
and the transition of Stride Rite® to a license
business model.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
FISCAL 2017 FULL-YEAR REPORTED OPERATING PROFIT
|
GUIDANCE TO
ADJUSTED OPERATING PROFIT GUIDANCE*
|
(Unaudited)
|
(In
millions)
|
|
|
GAAP
Basis
Full-Year
Operating Profit
|
|
Adjustments
(1)
|
|
As
Adjusted
Full-Year
Operating Profit
|
|
|
|
|
|
|
Fiscal 2017 Operating
Profit Guidance
|
$
117 - 128
|
|
$
|
130.0
|
|
|
$
247 - 258
|
Operating
Margin
|
5.0 -
5.4%
|
|
|
|
10.6 -
10.9%
|
(1)
Adjustments include the estimated impact from restructuring and
impairment costs, organizational transformation costs and $7.4
million of store inventory mark-downs related to retail stores
closed as part of the 2016 Plan
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
FISCAL 2016 REPORTED OPERATING
|
MARGIN TO ADJUSTED
OPERATING MARGIN*
|
(Unaudited)
|
(In
millions)
|
|
|
GAAP
Basis
Full-Year
Operating Profit
|
|
Restructuring and
Impairment Costs
|
|
Organizational
Transformation Costs (1)
|
|
As
Adjusted
Full-Year
Operating Profit
|
|
|
|
|
|
|
|
|
Operating Profit -
Fiscal 2016
|
$
|
159.9
|
|
|
$
|
50.3
|
|
|
$
|
2.2
|
|
|
$
|
212.4
|
|
Operating
margin
|
6.4
|
%
|
|
|
|
|
|
8.5
|
%
|
(1)
Organizational transformation costs include third party consulting
costs and costs related to the Company's distribution center
optimization.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
FISCAL 2017 FULL-YEAR DILUTED EPS GUIDANCE TO ADJUSTED
DILUTED
|
EPS ON A
CONSTANT CURRENCY BASIS GUIDANCE*
|
(Unaudited)
|
|
|
GAAP
Basis
Full-Year
2017
|
|
Adjustments
(1)
|
|
As
Adjusted
Full-Year
2017
|
|
Foreign Exchange
Impact
|
|
As
Adjusted
Full-Year 2017
Constant
Currency Basis
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share guidance
|
$ 0.76
- 0.81
|
|
$
|
0.84
|
|
|
$ 1.60
- 1.65
|
|
$
|
0.07
|
|
|
$ 1.67
- 1.72
|
(1) Adjustments include
estimated restructuring and impairment costs, organizational
transformation costs and $7.4 million of store inventory mark-downs
related to retail stores closed as part of the 2016
Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
FISCAL 2016 REPORTED REVENUE AND EPS
|
TO ADJUSTED
REVENUE AND ADJUSTED EPS*
|
(Unaudited)
|
(In
millions)
|
|
|
Fiscal
2016
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
YTD
|
|
|
|
|
|
|
|
|
|
|
GAAP Basis Fiscal
2016 - Revenue
|
$
|
577.6
|
|
|
$
|
583.7
|
|
|
$
|
603.7
|
|
|
$
|
729.6
|
|
|
$
|
2,494.6
|
|
Impact of Additional
Week - Revenue (1)
|
43.2
|
|
|
35.5
|
|
|
28.2
|
|
|
(106.9)
|
|
|
—
|
|
Revenue on an
Adjusted Basis
|
$
|
620.8
|
|
|
$
|
619.2
|
|
|
$
|
631.9
|
|
|
$
|
622.7
|
|
|
$
|
2,494.6
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Basis Fiscal
2016 - Diluted EPS
|
$
|
0.18
|
|
|
$
|
0.24
|
|
|
$
|
0.49
|
|
|
$
|
(0.02)
|
|
|
$
|
0.89
|
|
Impact of Additional
Week - EPS (1)
|
0.02
|
|
|
0.01
|
|
|
(0.04)
|
|
|
0.01
|
|
|
—
|
|
Impact of
Restructuring and Impairment Costs
|
0.11
|
|
|
0.01
|
|
|
—
|
|
|
0.35
|
|
|
0.47
|
|
EPS on an Adjusted
Basis
|
$
|
0.31
|
|
|
$
|
0.26
|
|
|
$
|
0.45
|
|
|
$
|
0.34
|
|
|
$
|
1.36
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2016 weeks
in operations
|
12
|
|
|
12
|
|
|
12
|
|
|
16
|
|
|
52
|
|
Fiscal 2016 -
Adjusted weeks in operations
|
13
|
|
|
13
|
|
|
13
|
|
|
13
|
|
|
52
|
|
(1) Given the first three
fiscal 2016 quarters had 12 weeks and the fourth quarter had 16
weeks of operations compared to fiscal 2017 where each quarter has
13 weeks of operations, the Company quantified the impact of
adjusting each fiscal 2016 quarter to allow for a better comparison
to fiscal 2017.
|
*
|
To supplement the
consolidated financial statements presented in accordance with
Generally Accepted Accounting Principles ("GAAP"), the Company
describes what certain financial measures would have been if
restructuring and impairment costs, incremental store inventory
mark-downs and organizational transformation costs which include
gains or losses from divestitures were excluded. The Company
also describes underlying revenue, which excludes the impact of
foreign exchange, the impact of retail store closures, the
transition of Stride Rite® to a license business
model and the impact of the additional week of operations included
within the quarterly calendar change. The Company believes these
non-GAAP measures provide useful information to both management and
investors to increase comparability to the prior period by
adjusting for certain items that may not be indicative of core
operating measures and to better identify trends in our
business. The adjusted financial results are used by
management to, and allow investors to, evaluate the operating
performance of the Company on a comparable basis. The Company
evaluates results of operations on both a reported and a constant
currency basis. The constant currency presentation, which is a
non-GAAP measure, excludes the impact of fluctuations in foreign
currency exchange rates. The Company believes providing constant
currency information provides valuable supplemental information
regarding results of operations, consistent with how the Company
evaluates performance. The Company calculates constant currency by
converting the current-period local currency financial results
using the prior period exchange rates and comparing these adjusted
amounts to our current period reported results. Management does
not, nor should investors, consider such non-GAAP financial
measures in isolation from, or as a substitution for, financial
information prepared in accordance with GAAP. A
reconciliation of all non-GAAP measures included in this press
release, to the most directly comparable GAAP measures, are found
in the financial tables above.
|
View original
content:http://www.prnewswire.com/news-releases/wolverine-worldwide-reports-third-quarter-results-and-updates-full-year-revenue-and-earnings-guidance-300551551.html
SOURCE Wolverine World Wide, Inc.