HOLLAND, MI (WHTC-AM/FM) — Wolverine World Wide, Inc. (NYSE: WWW) emailed a financial report for the first quarter, ending March 28, 2020, and updating company actions related to the COVID-19 pandemic.
“Following record financial results in the fourth quarter of 2019, the company delivered strong Q1 earnings results, despite challenging conditions caused by the COVID-19 pandemic late in the quarter,” said Blake W. Krueger, Wolverine Worldwide’s chairman, CEO and president. “Our supply chain and distribution centers continue to operate, enabling strong eCommerce growth and continued wholesale shipments.”
He went on to say the “agile business model” includes “our well-established global distribution network and fast-growing digital channels, is well-suited for the future consumer landscape.”
FIRST-QUARTER 2020 REVIEW HIGHLIGHTS
- Reported revenue was $439.3 million, down 16.1 percent versus the prior year. On a constant currency basis, revenue was down 15.6 percent versus the prior year. Owned eCommerce growth for the quarter was 17.5 percent.
- Reported gross margin was 41.4 percent, compared to 42.1 percent in the prior year, in line with expectations.
- Reported operating margin was 3.8 percent, compared to 10 percent in the prior year. Adjusted operating margin was 6.9 percent, compared to 10.9 percent in the prior year.
- Reported diluted earnings per share were $0.16, compared to $0.43 in the prior year. Adjusted diluted earnings per share were $0.28, and, on a constant currency basis, were $0.29, compared to $0.49 in the prior year.
- Inventory at the end of the quarter was up 8.4 percent versus the prior year and, excluding new businesses, was up 5.2 percent.
- Cash used in operating activities in the quarter was $76.6 million, compared to $132.4 million the prior year.
- Cash on hand at the end of the first quarter was $472.6 million.
The report made no mention of a December, 2019, statement the company issued detailing plans to pay $69.5 million over several years as part of a PFAS mitigation agreement with Plainfield and Algoma Townships to extend municipal water to more than 1,000 properties in those communities, part of a joint agreement with the company, the two communities and the State of Michigan.
“The company’s response to the current situation has been proactive and deliberate,” said Mike Stornant, Wolverine’s CFO. He added that he expects Wolverine to deliver $150 million to $200 million of operating cash flow for the year “in a very challenging global retail landscape.”
