Shoemaker Wolverine World Wide Inc posted a better-than-expected quarterly profit, helped by cost cuts, and raised its profit outlook for the full year, sending it shares up as much as 5 percent.
The company said its current order backlog position has improved significantly for spring deliveries in 2010 and that retailers would continue to closely monitor orders for the holiday season.
Apparel and footwear makers have been struggling with higher inventory levels as retailers -- faced with slumping sales -- cut back on their advance orders.
We believe that (retailers) have begun to adjust to the current retail environment and are placing future orders on a more normalized basis... to ensure that key products will be available when needed, Chief Executive Blake Krueger said on a conference call with analysts.
Independent outdoor retailers, who had sort of been immune up until a couple of months ago to a lot of the downturn, are also starting to return to normal order levels, Sterne Agee & Leach analyst Sam Poser said.
Wolverine, whose brands include Caterpillar, Harley-Davidson and Hush Puppies, said in January it would consolidate key distribution and global operations, reduce its workforce and freeze salaries of non-union employees, among other things. [ID:nWNAB7859]
Costs related to the restructuring -- which will be completed in the first half of 2010 -- will range from $35 million to $38 million, the company said in a filing with the U.S. Securities and Exchange Commission on Wednesday.
It sees related annualized pre-tax savings of $19 million to $21 million.
For the third quarter, the company, which sells casual, rugged outdoor and work footwear, earned $26.8 million, or 54 cents a share, compared with $31.2 million, or 62 cents a share, a year ago. Excluding restructuring and related charges, it earned 62 cents.
Revenue fell 10 percent to $286.8 million.
Analysts on average were looking for a profit of 56 cents a share, before items, on revenue of $292.3 million, according to Thomson Reuters I/B/E/S.
Wolverine's operating expenses fell 6 percent to $77.8 million, while inventory was down 5.2 percent.
They are doing a very good job of cutting expenses, the tax rate was much lower than people expected, that was the beat, said Poser, who has a neutral rating on the stock.
Wolverine, whose rivals include Timberland Co and Sketchers USA Inc, sees full-year profit between $1.65 to $1.75 per share, excluding items, up from its earlier view of $1.55 to $1.73 a share.
The company narrowed its full-year revenue view to a range of $1.08 billion to $1.11 billion. Its prior forecast was $1.07 billion to $1.12 billion.
I wouldn't expect to see any improvement in top line till the beginning of next year, Poser said.
Shares of the company, which have gained 44 percent in the last six months, were trading up 5 percent at $26.48 Wednesday afternoon on the New York Stock Exchange.
(Editing by Anne Pallivathuckal)