Jul 9, 2008
Wolverine profit tops forecast, shares sink
Jul 9, 2008
NEW YORK (Reuters) - Wolverine World Wide Inc reported a higher-than-expected quarterly profit on Wednesday, citing leaner inventories, but its 2008 outlook disappointed investors, who sent the shoe maker's shares down as much as 11.6 percent.
The company, whose brands include Wolverine, Merrell and Hush Puppies, said net income rose to $16.8 million, or 33 cents per share, in the second quarter, ended June 14, from $15.5 million, or 28 cents per share, a year earlier.
Revenue rose to $267.4 million from $250.3 million a year ago.
Analysts on average had expected profit of 31 cents per share on revenue of $258.2 million, according to Reuters Estimates.
Wolverine, based in Rockford, Michigan, affirmed its full-year outlook, which calls for earnings per share of $1.83 to $1.90 and revenue of $1.23 billion to $1.26 billion.
Since Wolverine posted higher-than-expected profit in the second quarter but failed to raise its full-year outlook, it essentially means the company is lowering its view for the back half of the year, said Wedbush Morgan Securities analyst Jeff Mintz.
Wolverine also said on a conference call with analysts that revenue growth in the second half of the year would be lower than the first half, Mintz said. He said he expected the shares to fall but was surprised about the magnitude of the drop.
"I think in this environment, with everybody being extremely nervous about the consumer, consumer stocks get quickly punished for whatever they do -- or whatever they don't do," Mintz said.
Wolverine shares were down $1.75, or 6.6 percent at $24.82 on the New York Stock Exchange.
(Reporting by Martinne Geller; Editing by Steve Orlofsky)
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