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Wolverine World Wide in Line

The shoe company posts a flat quarter but hits targets.
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Wolverine World Wide (WWW) matched Wall Street's fourth-quarter estimates Wednesday.

The Rockford, Mich., shoe company made $20.4 million, or 36 cents a share, for the quarter ended Dec. 31, compared with the year-ago $20.6 million, or 34 cents a share. Revenue rose 4.4% from a year ago to $321 million.

"For fiscal 2005, operating margin expanded to 10.7%, a 60 basis point improvement over 2004," said CFO Stephen L. Gulis Jr. "Gross margin expanded 50 basis points for the year. Strong expense controls produced 10 basis points of annualized expense leverage while the Company invested in new initiatives including Merrell Apparel and Patagonia Footwear.

"The financial strength of the business has never been better, as we generated a record $119 million in cash from operating activities, achieved an 11.8% inventory reduction and improved our cash collections. These results have allowed us to reduce debt by $11.5 million, repurchase company shares totaling $63.7 million, invest in new growth initiatives and end the year with a cash balance of $85.3 million."

For 2006, the company guided to earnings of $1.34 to $1.40 a share on sales of $1.12 billion, matching the Thomson forecast.