Lights and shadows on Wolverine’s 2019, while limiting production in China

Luci e ombre su Wolverine nel 2019 e sempre meno Cina

Several interpretations may apply to financial data about the fourth quarter and the whole year (closed on 28th December 2019), recently announced by Wolverine World Wide. On the one hand, someone emphasizes an increase in profits in the last quarter. On the other hand, somebody highlights a downturn in annual profits. In other words, lights and shadows. The market is going to give a mid-term response, stressing one of the two aspects. In the meantime, from the beginning of 2020, the US giant’s stocks have decreased in value by around 12%.

The fourth quarter

Revenues amounted to 607.4 million dollars, therefore increasing by 4.8% at fixed rates of exchange and rising by 5.1% at current rates of exchange. Earnings nearly reached Zacks estimates, as pointed out by Nasdaq.com: over the last four quarters, remarked Nasdaq.com, the company exceeded revenue estimates only once. Adjusted diluted earnings per share grew by 13.5%, in line with estimates provided by Zacks consensus.

2019

Yearly revenues amounted to 2.274 billion dollars, therefore increasing by 1.5% at fixed rates of exchange and rising by 2.3% at current rates of exchange. Profits per share went up to 2.25 dollars (+3.7%). Yet, conversely, profitability has decreased, owing to some “one-time costs mostly deriving from a lawsuit”. For example, operating income dropped by 32.1%: its value reached 171 million dollars.

The comment

“We proved our stability in the final part of the financial year – commented Blake Krueger, managing director and president of Wolverine World Wide – in line with our development plans, focused on improvement. Our most important brands, namely Merrell and Sperry, have been remarkably driving the company’s revenues in the fourth quarter of the year. The same applies to online sales, which enjoyed a boost, and our international expansion, which we successfully enhanced”. Furthermore, Wolverine emphasized their own ability to diversify the supply chain. In 2020, they expect Chinese manufacturing to account for less than 20% of the overall one, half of production compared to 2019.

Picture taken from wolverineworldwide.com

 

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