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Oct 3, 2011
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Hush Puppies, Sebago driving Wolverine Worldwide profit

By
Reuters
Published
Oct 3, 2011

Mon Oct 3, 2011 - Shoe maker Wolverine Worldwide Inc (WWW.N) reported a profit that beat market estimates for the seventh quarter in a row and raised its full-year outlook on strong international demand for its lifestyle brands such as Hush Puppies and Sebago.

The company's shares were up 6 percent before the bell on Monday. They had closed at $33.25 on Friday on the New York Stock Exchange.

Some investors have said shoe makers have done a little better than apparel companies as footwear is one of the first things recession-wary and budget-conscious shoppers look to buy when economic conditions begin to improve.

Sales of Wolverine's lifestyle brands, which also include labels such as Cushe and Soft Style, jumped 21.6 percent in the third quarter.

"Underscoring the global appeal of our brand portfolio, we generated unit volume growth of over 25% in each of the Latin America, Europe/Middle East/Africa and Asia Pacific regions during the quarter," Chief Executive Blake Krueger said in a statement.

This prompted Rockford, Michigan-based company to lift its earnings full-year expectations for the second time to $2.46-$2.52 a share. Analysts were looking for a profit of $2.49 a share, according to Thomson Reuters I/B/E/S.

Wolverine, which competes with Skechers USA Inc (SKX.N), Deckers Outdoor Corp (DECK.O) and Timberland, said gross margins rose 44 basis points to 40.6 percent in its latest reported quarter as it increased prices to offset rising costs.

Many companies in the consumer space have hiked prices to combat rising raw material costs.

Wolverine, which makes footwear under its namesake brand as well as Merrell and Harley-Davidson, had warned that margins could contract during its third quarter when it reported results in July.

Wolverine's third-quarter net income rose over 18 percent to $40.4 million, or 82 cents a share, topping Wall Street expectations of 75 cents a share.

Revenue rose 13 percent to $361.6 million, beating analysts' estimates of $358.1 million. (Reporting by Meenakshi Iyer in Bangalore; Editing by Viraj Nair)

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