Wolverine Worldwide reported record revenue and strong earnings performance for its second fiscal quarter ended June 15, 2013. The quarter included a full 12 weeks contribution from the Company's October 2012 acquisition of the Sperry Top-Sider, Saucony, Stride Rite, and Keds brands.
Second quarter highlights:
Revenue was a record $587.8 million, up 88.0% versus prior year reported revenue of $312.7 million and within the Company's expectations going into the quarter. The quarter's revenue was up 5.5% versus prior year pro forma revenue. Sperry Top-Sider, Keds, Saucony, and Harley-Davidson Footwear led the revenue growth in the quarter.
Reported gross margin increased 320 basis points to a record 41.0%. The strong gross margin performance was balanced across the Company's portfolio of brands and was driven by pricing discipline, favorable brand and channel mix, and better inventory management.
Excluding acquisition-related transaction and integration expenses, fully diluted earnings per share in the quarter were $0.46, substantially ahead of the Company's previous guidance of $0.31 - $0.35 per share and a 12.2% increase compared to the prior year's second quarter earnings adjusted for both acquisition-related transaction and integration costs and a non-recurring tax benefit.
The excellent earnings results were driven primarily by better-than-expected earnings from the recently-acquired brands. Reported earnings per share, including acquisition-related transaction and integration expenses, were $0.36 in this year's second quarter compared to $0.42 in the prior year.
Operating free cash flow in the fiscal second quarter was a record $165.1 million and the Company reduced its interest-bearing debt by $73.6 million in the quarter, including fully paying off its revolving line of credit and a voluntary principal payment of $25 million on a term loan.
"We are extremely pleased to report excellent financial results in our most recent quarter," said Blake W. Krueger, Chairman and Chief Executive Officer. "The combined power of our brand portfolio is virtually unmatched in the industry, and the continuing global consumer interest in authentic brands anchored in performance and heritage positions us well for future growth.
"We continue to believe that the power of our 16-brand portfolio, a strong global infrastructure, and talented team have us poised to deliver growth and exceptional shareholder value."
