Wolverine Q3 Profits Beat Forecasts; Company Braces for Tariff Impact
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Wolverine World Wide Inc.’s third-quarter earnings topped estimates, as the Merrell and Sperry parent braces for the upcoming impact of tariffs on Chinese goods.
In its financial report for the period ended Sept. 28, the footwear manufacturer logged adjusted diluted earnings per share that climbed 9.7% to 68 cents, 6 cents above Wall Street estimates. Revenues rose 2.8% to $574.3 million, roughly in line with consensus bets of $574.5 million.
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As of market open, Wolverine’s stock was up nearly 5% to $31.72.
“The double-digit growth from our biggest brands is a direct result of our continued focus on building trend-right product that resonates with consumers and ongoing execution of our digital-direct offense,” said Chairman, President and CEO Blake Krueger.
For the full year, the firm maintained its revenue guidance of roughly $2.28 billion but updated its earnings outlook to account for the impact of new tariff costs in the fourth quarter. Wolverine now expects adjusted diluted earnings per share to be about $2.25, down from the previous estimate of $2.28, including $0.03 related to the 15% levy to be implemented on the second round of the fourth tranche of tariffs on Dec. 15. Tariffs will be imposed on hundreds of millions of dollars’ worth of consumer goods spanning footwear, apparel and accessories.
Among the other bright spots so far this year, the Rockford, Mich., company has also been amplifying its international presence, including a previously announced joint venture with Chinese sportswear retailer Xtep International Holdings Ltd. that’s intended to grow its Merrell and Saucony products in mainland China, Hong Kong and Macau.
Wolverine is also expanding operations in Europe through the acquisition of one of its key Saucony footwear distributors, as well as opening new outlet store locations for the Merrell and Sperry brands as part of its direct-to-consumer strategy.
“The strong results from Merrell, Sperry and Saucony demonstrate the benefits of our demand creation investments and steady execution against our global growth model,” added SVP and CFO Mike Stornant.
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