Stuart, this is the kind of news I've been anticipating:
=Wolverine World Backs '97 View 95c/Shr On Brown-Shoe Sales
Dow Jones News Service via Dow Jones
By Andrea Puchalsky
ROCKFORD, Mich. (Dow Jones)--Wolverine World Wide Inc. (WWW), best known for
its Hush Puppies brand of shoes, anticipates "meeting or exceeding" analysts'
earnings expectations of 95 cents a share for 1997, according to Chairman and
Chief Executive Geoffrey B. Bloom.
Bloom also said the company is "very comfortable" with analysts' average
earnings forecast for 1998 of $1.17 a share.
In 1996, Wolverine World Wide earned $32.8 million, or a split-adjusted 77
cents a share, on sales of $511 million.
The company, a global leader among U.S. shoe companies in the marketing of
branded nonathletic footwear, has been picked by Salomon Smith Barney analyst
Faye Landes as her No. 1 stock pick for 1998. Wolverine World Wide is the only
footwear company on the firm's buy list.
Bloom said there appears to be a significant consumer shift toward more
casual, so-called "brown shoes."
"Brown shoes are hot," said Bloom, adding that "almost universally around the
world, business is dressing down. Wolverine is positioned better than any other
shoe company to take advantage of this fall-off in athletic shoes."
The brown-shoe category includes heavy, rugged outdoor and work footwear,
called the "pine-cone trade" by Bloom. The company also produces a broad line of
comfortable casual shoes, slippers and moccasins. Wolverine World Wide expects
to sell about 40 million pairs of shoes this year.
At the end of 1997, Wolverine World Wide added two contracts to its business:
an agreement to market footwear under the Coleman Co. (CLN) name around the
world and a five-year agreement for the rights to make and sell footwear with
the Harley-Davidson Inc. (HDI) brand. And last October the company acquired from
Sports Holding Corp. the assets of the Merrell outdoor footwear business, a
maker of hiking boots with 1996 sales of about $27 million. That gave Wolverine
global rights to the Merrell trademark.
"Those three new businesses clearly give us some significant opportunities to
move forward with niches we haven't been involved with before," Bloom said.
He added that until last year, Wolverine wasn't even considered a resource to
the sporting goods industry. Bloom said the company now has an potent arsenal of
products that will allow it to compete in that market, "giving it an option to
crack a new channel of distribution."
The company has also been testing its Hush Puppies product in some Foot Locker
stores. Foot Locker is a unit of Woolworth Corp. (Z).
Furthermore, Wolverine said it is not being hurt by the Asian crisis - and,
indeed, could benefit from it, since it reduces the company's production costs
in China.
According to Bloom, 1997 was the best year for sales growth, return on equity
and return on assets in Wolverine's 114-year history. Since 1992, the company's
stock has risen at a compound annual rate of 70%. Of the six analysts who rate
Wolverine stock, four recommend it as a strong buy and two as a buy.
-Andrea Puchalsky; 201-938-5099
(END) DOW JONES NEWS 01-22-98 |
