Wolverine Worldwide, Inc. (WWW) reported its financial results for the second quarter of fiscal 2014 (2QFY14) before markets opened today. The footwear manufacturer reported earnings per share of $0.31, which topped analysts’ estimates of $0.27. Quarterly revenues were $613.5 million, ahead of analysts’ estimates of $608.8 million.
Revenues rose 4.4% year-over-year (YoY), and adjusted earnings improved 34.8% for the quarter. The revenues were delivered due to the strong performance by all three segments of the company. The Performance Group segment had the greatest growth in revenues on a YoY basis of 5.8%, while Lifestyle posted the highest revenues for the quarter.
Operating margins during the quarter expanded as Wolverine reported a reduction in operating expenses. However, the gross margin shrunk to 40.1%, from 41% last year, because of increased marketing activity. This is due to the slowing retail environment in the US, and the higher price tags of the company’s products.
During the quarter, the company also reduced its debt burden by $43 million and had a cash holding of $232.5 million. The operating free cash flow for the quarter was $113.6 million.
The company also updated its full-year guidance as well. Revenue expectations are now $2.8 billion, a 3% YoY increase, and adjusted earnings guidance was reiterated to $1.57-1.63.
Wolverine Worldwide made a big announcement to strategically realign its business. It will close about 140 stores in the next 18 months, of which 60 stores will be shut by end of the current fiscal year. It will move toward consumer-centric operations, and consolidate its support teams on the field and in stores to make management more efficient.
The stock was up 5.9% in pre-market trading today, but has since fallen to over 1.6% overall as of 11:59AM EDT.