This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Keds, Saucony Maker Wolverine Steps Up Revenue Despite Debt

NEW YORK (TheStreet) -- Footwear company Wolverine World Wide (WWW - Get Report) has recently released its annual results: it managed to grow its top and bottom line, despite a challenging business environment and serious debt.

The company has made significant reductions in its debt levels, although it still has a long way to go. Compared to 2010, Wolverine has reported triple-digit growth in revenue and gross profits after the massive $1.25 billion acquisition of Collective Brands' Performance and Lifestyle group in 2012. Profitability has also improved. Moreover, for the current year, Wolverine has forecast double-digit earnings growth.

With a new buyback program and the expected growth in earnings, Wolverine's shareholders could finally start seeing the benefits of the acquisition, which included the Sperry Top-Sider, Saucony, Stride Rite and Keds brands.

Wolverine's shares have risen 22% in the last 12 months and were at $26.78 today at 11 a.m.

After the buyout of several of Collective Brands' labels, Wolverine has reported significant growth in revenues and income. However, Wolverine also reports its results on pro-forma basis under the assumption that the company had acquired PLG in January 2012, although the deal was finalized in October of that year. That way, the company eliminates the unusual impact on growth from the acquisition.

In the fourth quarter of 2013, Wolverine's revenues rose 13.6% from a year ago to $740.8 million. On a pro-forma basis, the revenues were up 0.6%, and missed analysts' estimates by $3.1 million. The company's losses shrank to $1.7 million from $3.7 million in the prior year. Adjusted earnings came in at 22 cents per share, better than market's expectations of 20 cents per share.

For the full year, Wolverine's revenues climbed 64% from the previous year to $2.69 billion; on a pro-forma basis, the revenues were up 5.6%. Annual income rose 24.4% to $100.4 million.

The difference between the company's reported and pro-forma revenues clearly shows that a significant portion of its growth has come due to the PLG acquisition.

The company witnessed strong growth in Latin America throughout 2013. Asia/Pacific picked up the momentum in the second half of the fiscal year and witnessed double digit growth in the fourth quarter.

A long-term analysis shows that the company has consistently grown its revenue and gross profits over the last several years. Since 2010, the company's revenue and gross profits have more than doubled. Net income, however, has suffered. But that was largely due to the costs associated with the debt-funded acquisition.

For instance, in 2013, the company's net interest expense climbed to $52 million from just $1 million in 2011. This was due to higher levels of debt. The acquisition also gave rise to transaction and integration costs which had an adverse impact on the company's net earnings growth in 2012 and 2013.



(in millions)


(in millions)


(in millions)


(in millions)






Gross Profit





Net Earnings





1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
WWW $19.10 0.00%
AAPL $94.98 -0.21%
FB $116.77 -0.56%
GOOG $692.36 0.00%
TSLA $230.00 -1.00%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs