When people think about WolverineWorld Wide
In a refreshing break from other retail companies that whine about weather or gasoline prices, Wolverine simply delivered the goods for the first quarter. Total sales were up about 9% on good outdoor brand sales and good performance from the Hush Puppies line, partially offset by lower revenue from co-branded products from Caterpillar
Gross margins improved by 130 basis points from the year-ago quarter, and that dropped almost straight through to an improved operating margin as well. Consequently, operating income grew 27% for the quarter, net income grew 32%, and EPS climbed 35%.
Although the company declined to provide cash flow information for the first quarter, management reiterated its guidance for roughly $75 million in operating cash flow for the full year. Assuming that trends in capital expenditures stay constant, free cash flow should come in around $55 million for the year.
Wolverine management is already returning some of that cash to shareholders, buying almost $8 million worth of stock in the quarter and hiking the dividend about 50% from last year.
Wolverine management should also be credited for running the balance sheet well. Increases in inventory were solely because of the outdoor group (the strongest-growing group at present) and days sales outstanding, and inventory turns improved by 8.8% and 6.3% respectively versus last year's period.
Many Fools have spoken well of partial competitor Timberland
For more Foolishness on footwear:
Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares), but he happily wears his Wolverine shoes.
More from The Motley Fool
Should You Claim Social Security at 70?
Waiting until 70 to access your benefits can result in an automatic increase. But under certain circumstances, holding off just isn't smart.
Danger Lurks for These 3 High-Yield Dividend Stocks
Coca-Cola, Qualcomm, and Vector all pay higher dividends than their businesses can afford to cover.
3-Step Retirement Checklist for the End of 2017
Smart retirement savers are doing these three things before the New Year.