Outdoor financials: Wolverine Q1 profit up, board OKs buyback, plus Eddie Bauer, Oakley, Big 5, Phoenix Footwear, Quiksilver

Wolverine Q1 profit up, board OKs buyback
Driven by increased revenue and lower costs, Wolverine World Wide (NYSE: WWW), parent of Merrell Footwear and licensee for Patagonia Footwear, said its first-quarter profit climbed 14 percent.

Net income for the period increased to $22.3 million, or $0.39 per share, from $19.6 million, or $0.34 per share, in the previous year. Revenue grew 7 percent to $281.1 million from $262.8 million.

President and COO Blake Krueger said in a statement that the Outdoor Group remained the company’s leading profit contributor during the quarter, while Hush Puppies, Wolverine Footwear Group and the Heritage Brands Group all produced significant double-digit profit increases.

Additionally, the company said that first-quarter earnings were strong as a result of gross margin expanding to an all-time record.

After posting a better-than-expected first-quarter profit, Wolverine raised its full-year earnings forecast, saying it now anticipates net income in a range of $1.57 to $1.63 per share, up from prior estimates of $1.56 to $1.62 per share. It maintained its full-year revenue outlook in a range of $1.2 billion to $1.23 billion.

Separately, Wolverine’s board of directors authorized a buyback of 7 million shares.
The repurchase — the largest in company history — represents nearly 13 percent of the company’s outstanding shares at the end of the first quarter.

In addition, the board declared a quarterly cash dividend of $0.09 per share of common stock. The dividend is payable on Aug. 1 to shareholders of record on July 2 and represents an annual dividend of $0.36 per share.

In other company news: Wolverine said that Blake Krueger, the company’s president and COO, became CEO and president, as part of the company’s succession plan. Krueger succeeds former CEO Timothy O’Donovan, who was re-elected chairman of the board.

In his new role, O’Donovan said he will focus on working closely with Krueger and the management team as the company continues building a portfolio of global lifestyle brands and pursues the significant opportunities that lie ahead.

Eddie Bauer auditors remove ‘going concern’ warning
Following its refinancing of outstanding debt, Eddie Bauer Holdings (Nasdaq: EBHI) said that auditors removed a “going concern” statement from the company’s financial statements for the fiscal year ended Dec. 30.

Auditors issue “going concern” opinions to express substantial doubt about a company’s ability to continue operating for a year beyond the financial statement date.

The refinancing was completed on April 4 and amended financial statements for the year ended Dec. 30, without the statement, were filed on April 17.

Eddie Bauer emerged from bankruptcy in June 2005 and is attempting a turnaround. Last month, Eddie Bauer shareholders turned down a proposed $286 million sale to a holding company owned by affiliates of Sun Capital Partners Inc. and Golden Gate Capital.

Oakley Q1 profit triples
Oakley (NYSE: OO) said its first-quarter profit more than tripled as sunglasses and apparel sales grew.

For the quarter, Oakley earnings totaled $5.7 million, or $0.08 per share, compared with $1.9 million, or $0.03 per share. Results for the 2007 quarter included 1 cent per share from an income tax refund, the company said. Oakley’s quarterly sales grew 31.3 percent to $199.2 million from $151.7 in the year-ago period.

The company said optics sales — including sunglasses, prescription eyewear, goggles and electronics — increased 35 percent to $144.3 million. Oakley’s apparel, accessories and footwear sales grew 9.7 percent year-over-year to $40.4 million.

More than three-fourths of the company’s total sales came at the wholesale level.

Oakley raised its 2007 earnings outlook due to an $850,000 income tax refund benefit.
Oakley boosted its 2007 earnings estimate to $0.95 to $0.98 per share, from an earlier estimate of $0.94 to $0.97 per share.

Big 5 shares fall on downgrade
Shares of Big 5 Sporting Goods (Nasdaq: BGFV) dropped on April 17 after a Credit Suisse analyst said Big 5 potentially faces lower consumer spending due to continued declines in the housing industry and a faltering subprime mortgage market.

“There is a high correlation between Big 5 comps and existing home sales in California, as well as between Big 5’s stock and home prices,” analyst Gary Balter wrote in a note to clients. “Combined with subprime issues, this may cap upside surprises and raise the risk profile for Big 5.”

Balter downgraded the stock to “Underweight” from “Neutral,” noting that 70 percent of Big 5 stores are in states heavily exposed to subprime problems — particularly California.

Subprime lenders grant loans to customers with spotty credit histories. More than two dozen of these banks have gone bankrupt in recent months as customer defaults surge amid a prolonged slowdown in the housing market.

Balter did lift his outlook for 2007 earnings per share to $1.53 from $1.46, and said he continues to see improvement under the leadership of CEO Steve Miller and CFO Barry Emerson. However, he said he believes the stock is currently fairly valued and reiterated a $24 price target.

Shares fell as much as $1.54 to $25.32 in day’s trading on the Nasdaq Stock Market, and closed at $26.06. Despite the drop on April 17, Big 5’s stock has performed relatively well over the past year. Since bottoming at a 52-week low of $18 in July 2006, the stock has steadily increased to hit a year-high of $27.24 earlier this month.

Phoenix Footwear names new CEO
Phoenix Footwear Group (Amex: PXG) has named Cathy Taylor as its CEO.
Taylor replaces Chairman James Riedman who has served as interim CEO since May 2006 when Richard White left the company to “pursue entrepreneurial interests,” according to the company.

Taylor most recently headed her own private consulting group, and before that was CEO of Wenger North America, maker of Swiss army knifes. For 20 years before that, she held a series of positions at Cole Haan and then Nike Inc., which acquired the company.

Quicksilver appoints CFO, COO
Quiksilver (NYSE: ZQK), parent of Rossignol, has appointed Joe Scirocco as its new chief financial officer and David Morgan as its chief operations officer. Scirocco most recently served as CFO at retailer Tommy Hilfiger Corp.

Scirocco is replacing Steve Brink, who has decided to resign “to pursue other interests” but he will remain with the company to help with the transition and provide consulting services, the company said.

Morgan was formerly the executive vice president of finance and operations at the company. The chief operating officer position was not filled before the Morgan appointment.

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