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*
|
(Una udited)
|
(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.