Wolverine World Wide (WWW) 10-Q 2011 Q1 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the first twelve week accounting period ended March 26, 2011

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                    

Commission File Number: 001-06024

WOLVERINE WORLD WIDE, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	38-1185150
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)
9341 Courtland Drive N.E., Rockford, Michigan	49351
(Address of Principal Executive Offices)	(Zip Code)

(616) 866-5500

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yesþ Noo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yesþ Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filerþ Accelerated filero Non-accelerated filero Smaller reporting companyo

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yeso Noþ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

There were 49,632,123 shares of Common Stock, $1 par value, outstanding as of April 29, 2011.

TABLE OF CONTENTS

Part I. Financial Information	4
Item 1. Financial Statements	4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3. Quantitative and Qualitative Disclosures About Market Risk	21
Item 4. Controls and Procedures	22
Part II. Other Information	23
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 6. Exhibits	24
Signatures	25
Exhibit 31.1
Exhibit 31.2
Exhibit 32
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT

2

FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements,” which are statements relating to future, not past, events. In this context, forward-looking statements often address management’s current beliefs, assumptions, expectations, estimates and projections about future business and financial performance, global political, economic and market conditions, and the Company itself. Such statements often contain words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “is likely,” “plans,” “predicts,” “projects,” “should,” “will,” variations of such words, and similar expressions. Forward-looking statements, by their nature, address matters that are, to varying degrees, uncertain. Uncertainties that could cause the Company’s performance to differ materially from what is expressed in forward-looking statements include, but are not limited to the following:

• changes in national, regional or global economic and market conditions;

• the impact of financial and credit markets on the Company, its suppliers and customers;

• changes in interest rates, tax laws, duties, tariffs, quotas or applicable assessments in countries of import and export;

• the impact of regulation, regulatory and legal proceedings and legal compliance risks;

• currency fluctuations;

• changes in costs of future pension funding requirements;

• the risks of doing business in developing countries, and politically or economically volatile areas;

• the ability to secure and protect owned intellectual property or use licensed intellectual property;

• changes in consumer preferences, spending patterns, buying patterns, or demand for the Company’s products;

• changes in relationships with, including the loss of, significant customers;

• cancellation of orders for future delivery, or the failure of the Department of Defense to exercise future purchase options, award new contracts or the cancellation of existing contracts, by the Department of Defense or other military purchasers;

• the cost, availability and management of raw materials, inventories, services, labor and contract manufacturers;

• service interruptions at shipping and receiving ports;

• the ability to adapt to and compete in global footwear, apparel and consumer-direct markets; and

• strategic actions, including new initiatives and ventures, acquisitions and dispositions, and our success in integrating acquired businesses and new initiatives and ventures;

and many other matters of national, regional and global scale, including those of a political, environmental, economic, business and competitive nature. These uncertainties could cause a material difference between an actual outcome and a forward-looking statement. These uncertainties included here are not exhaustive and are described in more detail in Part I, Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended January 1, 2011 and any information regarding such Risk Factors included in the Company’s subsequent filings with the Securities and Exchange Commission. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The Company does not undertake an obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events or otherwise.

3

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(Thousands of Dollars, Except Share Data)

	March 26,			January 1,			March 27,
	2011			2011			2010
	(Unaudited)			(Audited)			(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	91,551		$	150,400		$	84,944
Accounts receivable, less allowances March 26, 2011 – $12,454 January 1, 2011 – $11,413 March 27, 2010 – $15,834		251,929			196,457			207,735
Inventories:
Finished products		226,947			188,647			154,083
Raw materials and work-in-process		23,041			20,008			17,750
		249,988			208,655			171,833
Deferred income taxes		13,855			13,225			11,361
Prepaid expenses and other current assets		13,294			11,397			10,564
Total current assets		620,617			580,134			486,437
Property, plant and equipment:
Gross cost		287,776			281,564			304,277
Accumulated depreciation		(212,332	)		(207,167	)		(232,093	)
		75,444			74,397			72,184
Other assets:
Goodwill		39,881			39,014			38,253
Other non-amortizable intangibles		16,535			16,464			16,034
Cash surrender value of life insurance		36,804			36,042			35,735
Deferred income taxes		37,402			37,602			34,937
Other		2,589			2,922			3,232
		133,211			132,044			128,191
Total assets	$	829,272		$	786,575		$	686,812

See accompanying notes to consolidated financial statements.

4

WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets — continued
(Thousands of Dollars, Except Share and Per Share Data)

	March 26,			January 1,			March 27,
	2011			2011			2010
	(Unaudited)			(Audited)			(Unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	60,353		$	64,080		$	37,539
Accrued salaries and wages		12,264			26,848			11,778
Income taxes		11,672			2,746			6,938
Taxes, other than income taxes		10,353			6,586			9,018
Restructuring reserve		1,046			1,314			3,561
Other accrued liabilities		42,322			37,046			39,505
Accrued pension liabilities		2,018			2,018			2,044
Current maturities of long-term debt		536			517			496
Revolving credit agreement		30,000			—			—
Total current liabilities		170,564			141,155			110,879
Long-term debt (less current maturities)		—			517			496
Deferred compensation		4,374			4,410			6,154
Accrued pension liabilities		55,435			83,685			77,008
Other non-current liabilities		13,192			12,911			10,423
Stockholders’ equity
Common Stock — par value $1, authorized 160,000,000 shares; shares issued (including shares in treasury):
March 26, 2011 – 64,723,233 shares
January 1, 2011 – 63,976,387 shares
March 27, 2010 – 63,547,715 shares		64,723			63,976			63,548
Additional paid-in capital		119,868			108,286			89,136
Retained earnings		819,785			789,684			728,565
Accumulated other comprehensive income (loss)		(35,290	)		(41,123	)		(48,574	)
Cost of shares in treasury:
March 26, 2011 – 15,155,905 shares
January 1, 2011 – 14,976,835 shares
March 27, 2010 – 14,084,787 shares		(383,379	)		(376,926	)		(350,823	)
Total stockholders’ equity		585,707			543,897			481,852
Total liabilities and stockholders’ equity	$	829,272		$	786,575		$	686,812

See accompanying notes to consolidated financial statements.

5

WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Operations
(Thousands of Dollars, Except Per Share Data)
(Unaudited)

	12 Weeks Ended
	March 26,			March 27,
	2011			2010
Revenue	$	330,872		$	284,897
Cost of goods sold		193,075			166,327
Restructuring and other transition costs		—			981
Gross profit		137,797			117,589
Selling, general and administrative expenses		88,342			78,540
Restructuring and other transition costs		—			517
Operating profit		49,455			38,532
Other expenses (income):
Interest expense — net		226			89
Other income — net		(580	)		(230	)
		(354	)		(141	)
Earnings before income taxes		49,809			38,673
Income taxes		13,946			11,214
Net earnings	$	35,863		$	27,459
Net earnings per share (see Note 2):
Basic	$	0.74		$	0.55
Diluted	$	0.72		$	0.54
Cash dividends declared per share	$	0.12		$	0.11

See accompanying notes to consolidated financial statements.

6

WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flow
(Thousands of Dollars)
(Unaudited)

	12 Weeks Ended
	March 26,			March 27,
	2011			2010
OPERATING ACTIVITIES
Net earnings	$	35,863		$	27,459
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation		3,559			3,456
Amortization		234			405
Deferred income taxes		132			157
Stock-based compensation expense		3,281			2,570
Excess tax benefits from stock-based compensation		(1,316	)		(470	)
Pension expense		4,039			3,758
Pension contribution		(31,800	)		(10,400	)
Restructuring and other transition costs		—			1,498
Cash payments related to restructuring and other transition costs		(275	)		(3,813	)
Other		(1,567	)		3,697
Changes in operating assets and liabilities:
Accounts receivable		(53,300	)		(45,608	)
Inventories		(38,757	)		(15,155	)
Other operating assets		(1,494	)		(4,738	)
Accounts payable		(4,414	)		(4,585	)
Income taxes		8,926			(7,696	)
Other operating liabilities		(5,866	)		5,935
Net cash used in operating activities		(82,755	)		(43,530	)
INVESTING ACTIVITIES
Additions to property, plant and equipment		(4,345	)		(2,168	)
Other		(640	)		(509	)
Net cash used in investing activities		(4,985	)		(2,677	)
FINANCING ACTIVITIES
Net borrowings under revolver		30,000			—
Payments of long-term debt and capital lease obligations		(530	)		(537	)
Cash dividends paid		(5,331	)		(5,416	)
Purchase of common stock for treasury		(5,063	)		(24,600	)
Surrender of common stock for income tax purposes		(1,555	)		(838	)
Proceeds from shares issued under stock incentive plans		7,415			5,417
Excess tax benefits from stock-based compensation		1,316			470
Net cash provided by (used in) financing activities		26,252			(25,504	)
Effect of foreign exchange rate changes		2,639			(3,784	)
Decrease in cash and cash equivalents		(58,849	)		(75,495	)
Cash and cash equivalents at beginning of the period		150,400			160,439
Cash and cash equivalents at end of the period	$	91,551		$	84,944

See accompanying notes to consolidated condensed financial statements.

7

WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
March 26, 2011 and March 27, 2010
(Unaudited)

All amounts are in thousands of dollars except share and per share data, and elsewhere as noted.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Wolverine World Wide, Inc. is a leading designer, manufacturer and marketer of a broad range of quality casual shoes, performance outdoor footwear and apparel, industrial work shoes, boots and apparel, and uniform shoes and boots. The Company’s portfolio of owned and licensed brands includes:Bates^®,Cat^® Footwear,Chaco^®,Cushe^®,Harley-Davidson^® Footwear,Hush Puppies^®,HyTest^®,Merrell^®,Patagonia^® Footwear,Sebago^®,Soft Style^® andWolverine^®. Licensing and distribution arrangements with third parties extend the global reach of the Company’s brand portfolio. The Company also operates a consumer-direct division to market its own brands as well as branded footwear and apparel from other manufacturers and a leathers division that marketsWolverine Performance Leathers™.

Basis of Presentation

The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for a complete presentation of the financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included in the accompanying financial statements. For further information, refer to the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 1, 2011.

Revenue Recognition

Revenue is recognized on the sale of products manufactured or sourced by the Company when the related goods have been shipped, legal title has passed to the customer and collectability is reasonably assured. Revenue generated through licensees and distributors involving products bearing the Company’s trademarks is recognized as earned according to stated contractual terms upon either the purchase or shipment of branded products by licensees and distributors.

The Company records provisions against gross revenue for estimated stock returns and cash discounts in the period when the related revenue is recorded. These estimates are based on factors that include, but are not limited to, historical stock returns, historical discounts taken and analysis of credit memorandum activity.

Cost of Goods Sold

Cost of goods sold for the Company’s operations include the actual product costs, including inbound freight charges, purchasing, sourcing, inspection and receiving costs. Warehousing costs are included in selling, general and administrative expenses.

Seasonality

The Company’s business is subject to seasonal influences and the Company’s fiscal year has twelve weeks in each of the first three quarters and, depending on the fiscal calendar, sixteen or seventeen weeks in the fourth quarter. Both of these factors can cause significant differences in revenue, earnings and cash flows from quarter to quarter; however, the differences have followed a consistent pattern in previous years.

Reclassifications

Certain prior period amounts on the consolidated condensed financial statements have been reclassified to conform to current period presentation. These reclassifications did not affect net earnings.

8

WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
March 26, 2011 and March 27, 2010
(Unaudited)

2. EARNINGS PER SHARE

The Company calculates earnings per share in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260,Earnings Per Share(“ASC 260”). ASC 260 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore need to be included in the earnings allocation in computing earnings per share under the two-class method. Under the guidance in ASC 260, the Company’s unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities and must be included in the computation of earnings per share pursuant to the two-class method.

The following table sets forth the computation of basic and diluted earnings per share:

	12 Weeks Ended
	March 26,			March 27,
	2011			2010
Numerator:
Net earnings	$	35,863		$	27,459
Adjustment for earnings allocated to nonvested restricted common stock		(588	)		(556	)
Net earnings used in calculating basic earnings per share		35,275			26,903
Adjustment for earnings reallocated to nonvested restricted common stock		18			6
Net earnings used in calculating diluted earnings per share	$	35,293		$	26,909
Denominator:
Weighted average shares outstanding		49,292,383			49,593,214
Adjustment for nonvested restricted common stock		(1,379,644	)		(1,092,849	)
Shares used in calculating basic earnings per share		47,912,739			48,500,365
Effect of dilutive stock options		1,264,737			1,029,733
Shares used in calculating diluted earnings per share		49,177,476			49,530,098
Net earnings per share:
Basic	$	0.74		$	0.55
Diluted	$	0.72		$	0.54

Options to purchase 205,313 shares of common stock at March 26, 2011 and 875,638 shares at March 27, 2010 have not been included in the denominator for the computation of diluted earnings per share because the related exercise prices were greater than the average market price for the quarter, and they were, therefore, anti-dilutive.

3. GOODWILL AND OTHER NON-AMORTIZABLE INTANGIBLES

The changes in the carrying amount of goodwill and other non-amortizable intangibles are as follows:

	Goodwill		Trademarks			Total
Balance at March 27, 2010	$	38,253	$	16,034		$	54,287
Intangibles acquired		—		360			360
Foreign currency translation effects		761		70			831
Balance at January 1, 2011		39,014		16,464			55,478
Intangibles disposed		—		(11	)		(11	)
Foreign currency translation effects		867		82			949
Balance at March 26, 2011	$	39,881		16,535			56,416

9

WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
March 26, 2011 and March 27, 2010
(Unaudited)

4. COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) represents net earnings and any revenue, expenses, gains and losses that, under accounting principles generally accepted in the United States, are excluded from net earnings and recognized directly as a component of stockholders’ equity.

The ending accumulated other comprehensive income (loss) is as follows:

	March 26,			January 1,			March 27,
	2011			2011			2010
Foreign currency translation adjustments	$	18,687		$	11,548		$	6,574
Fair value of foreign exchange contracts, net of taxes		(3,121	)		(1,815	)		(1,411	)
Pension adjustments, net of taxes		(50,856	)		(50,856	)		(53,737	)
Accumulated other comprehensive income (loss)	$	(35,290	)	$	(41,123	)	$	(48,574	)

The reconciliation from net earnings to comprehensive income is as follows:

	12 Weeks Ended
	March 26,			March 27,
	2011			2010
Net earnings	$	35,863		$	27,459
Other comprehensive income (loss):
Foreign currency translation adjustments		7,139			(7,903	)
Change in fair value of foreign exchange contracts, net of taxes		(1,306	)		2,135
Comprehensive income	$	41,696		$	21,691

5. BUSINESS SEGMENTS

The Company has one reportable segment that is engaged in designing, manufacturing, sourcing, marketing, licensing and distributing to the retail sector branded footwear, apparel and accessories. Revenue earned from the operations of this segment is derived from the sale of branded footwear, apparel and accessories to third-party customers and royalty income from the licensing of the Company’s trademarks and brand names to third-party licensees and distributors. The operating segments aggregated into the branded footwear, apparel and licensing reportable segment all manufacture, source, market and distribute products in a similar manner.

The other business units in the following tables consist of the Company’s retail, leather and pigskin procurement operations. Substantially all of the assets of Wolverine Procurement, Inc. were sold to a third-party buyer on December 29, 2010. These other operations do not collectively form a reportable segment because their respective operations are dissimilar and they do not meet the applicable quantitative requirements. At March 26, 2011, the Company owned and operated 91 retail stores in the United States, Canada and the United Kingdom and operated 41 consumer-direct Internet sites. The other business units distribute products through retail and wholesale channels.

The Company measures segment profits as earnings before income taxes. The accounting policies used to determine profitability and total assets of the branded footwear, apparel and licensing reportable segment and other business units are the same as disclosed in Note 1.

10

WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
March 26, 2011 and March 27, 2010
(Unaudited)

Business segment information is as follows:

	12 Weeks Ended March 26, 2011
	Branded
	Footwear,
	Apparel and		Other
	Licensing		Businesses			Corporate			Consolidated
Revenue	$	304,316	$	26,556		$	—		$	330,872
Intersegment revenue		9,023		365			—			9,388
Earnings (loss) before income taxes		59,459		(1,060	)		(8,590	)		49,809
Total assets		650,322		62,541			116,409			829,272

	12 Weeks Ended March 27, 2010
	Branded
	Footwear,
	Apparel and		Other
	Licensing		Businesses			Corporate			Consolidated
Revenue	$	261,638	$	23,259		$	—		$	284,897
Intersegment revenue		7,421		729			—			8,150
Earnings (loss) before income taxes		47,916		(1,392	)		(7,851	)		38,673
Total assets		520,477		46,656			119,679			686,812

6. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Company follows FASB ASC Topic 820,Fair Value Measurements and Disclosures(“ASC 820”), which provides a consistent definition of fair value, focuses on exit price, prioritizes the use of market-based inputs over entity-specific inputs for measuring fair value and establishes a three-tier hierarchy for fair value measurements. This topic requires fair value measurements to be classified and disclosed in one of the following three categories:

Level 1:	Fair value is measured using quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level 2:	Fair value is measured using either direct or indirect inputs, other than quoted prices included within Level 1, which are observable for similar assets or liabilities.
Level 3:	Fair value is measured using valuation techniques in which one or more significant inputs are unobservable.

The Company’s financial instruments consist of cash and cash equivalents, accounts and notes receivable, accounts payable, foreign currency forward exchange contracts, borrowings under the Company’s revolving credit agreement and long-term debt. The carrying amount of the Company’s financial instruments is historical cost, which approximates their fair value, except for the foreign currency exchange contracts, which are carried at fair value. The Company does not hold or issue financial instruments for trading purposes.

As of March 26, 2011 and March 27, 2010, liabilities of $3,105 and $322, respectively, have been recognized for the fair value of the Company’s foreign exchange contracts. In accordance with ASC 820, these assets and liabilities fall within Level 2 of the fair value hierarchy. The prices for the financial instruments are determined using prices for recently-traded financial instruments with similar underlying terms as well as directly or indirectly observable inputs. The Company did not have any additional assets or liabilities that were measured at fair value on a recurring basis at March 26, 2011 and March 27, 2010.

The Company follows FASB ASC Topic 815,Derivatives and Hedging, which is intended to improve transparency in financial reporting and requires that all derivative instruments be recorded on the consolidated balance sheets at fair value by establishing criteria for designation and effectiveness of hedging relationships. The Company utilizes foreign currency forward exchange contracts to manage the volatility associated with U.S. dollar inventory purchases made by non-U.S. wholesale operations in the normal course of business. At March 26, 2011 and March 27, 2010, foreign exchange contracts with a notional value of $111,743 and $75,410, respectively, were outstanding to purchase U.S. dollars with maturities ranging up to 336 days. These contracts have been designated as cash flow hedges.

11

WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
March 26, 2011 and March 27, 2010
(Unaudited)

The fair value of the foreign currency forward exchange contracts represents the estimated receipts or payments necessary to terminate the contracts. Hedge effectiveness is evaluated by the hypothetical derivative method. Any hedge ineffectiveness is reported within the cost of goods sold caption of the consolidated condensed statements of operations. Hedge ineffectiveness was not material to the Company’s consolidated condensed financial statements for the 12 weeks ended March 26, 2011 and March 27, 2010. If, in the future, the foreign exchange contracts are determined to be ineffective hedges or terminated before their contractual termination dates, the Company would be required to reclassify into earnings all or a portion of the unrealized amounts related to the cash flow hedges that are currently included in accumulated other comprehensive income (loss) within stockholders’ equity.

For the 12 weeks ended March 26, 2011 and March 27, 2010, the Company recognized net losses of $1,000 and $879, respectively, in accumulated other comprehensive income (loss) related to the effective portion of its foreign exchange contracts. For the 12 weeks ended March 26, 2011 and March 27, 2010, the Company reclassified gains of $1,000 and $1,417, respectively, from accumulated other comprehensive income (loss) into cost of goods sold related to the effective portion of its foreign exchange contracts designated and qualifying as cash flow hedges.

7. STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation in accordance with the fair value recognition provisions of FASB ASC Topic 718,Compensation — Stock Compensation(“ASC 718”). The Company recognized compensation expense of $3,281 and $2,570 and related income tax benefits of $1,054 and $766 for grants under its stock-based compensation plans in the statements of operations for the 12 weeks ended March 26, 2011 and March 27, 2010, respectively.

Stock-based compensation expense recognized in the consolidated condensed statements of operations for the 12 weeks ended March 26, 2011 and March 27, 2010, is based on awards ultimately expected to vest and, as such, has been reduced for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on historical experience.

The Company estimated the fair value of employee stock options on the date of grant using the Black-Scholes model. The estimated weighted-average fair value for each option granted was $10.41 and $6.81 per share for 12 weeks ended March 26, 2011 and March 27, 2010, respectively, with the following weighted-average assumptions:

	12 Weeks Ended
	March 26,			March 27,
	2011			2010
Expected market price volatility(1)		38.6	%		37.9	%
Risk-free interest rate(2)		1.9	%		1.9	%
Dividend yield(3)		1.6	%		1.9	%
Expected term(4)	4 years			4 years

(1)	Based on historical volatility of the Company’s common stock. The expected volatility is based on the daily percentage change in the price of the stock over the four years prior to the grant.
(2)	Represents the U.S. Treasury yield curve in effect for the expected term of the option at the time of grant.
(3)	Represents the Company’s cash dividend yield for the expected term.
(4)	Represents the period of time that options granted are expected to be outstanding. As part of the determination of the expected term, the Company concluded that all employee groups exhibit similar exercise and post-vesting termination behavior.

The Company issued 747,319 and 863,171 shares of common stock in connection with the exercise of stock options and restricted stock grants made during the 12 weeks ended March 26, 2011 and March 27, 2010, respectively. The Company cancelled 3,965 and 3,753 shares of common stock issued under restricted stock awards as a result of forfeitures during the 12 weeks ended March 26, 2011 and March 27, 2010, respectively.

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WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
March 26, 2011 and March 27, 2010
(Unaudited)

8. PENSION EXPENSE

A summary of net pension and Supplemental Executive Retirement Plan costs recognized by the Company is as follows:

	12 Weeks Ended
	March 26,			March 27,
	2011			2010
Service cost pertaining to benefits earned during the period	$	1,500		$	1,322
Interest cost on projected benefit obligations		3,075			2,935
Expected return on pension assets		(3,323	)		(2,877	)
Net amortization loss		2,787			2,378
Net pension cost	$	4,039		$	3,758

9. LITIGATION AND CONTINGENCIES

The Company is involved in various environmental claims and other legal actions arising in the normal course of business. The environmental claims include sites where the U.S. Environmental Protection Agency has notified the Company that it is a potentially responsible party with respect to environmental remediation. These remediation claims are subject to ongoing environmental impact studies, assessment of remediation alternatives, allocation of costs between responsible parties and concurrence by regulatory authorities and have not yet advanced to a stage where the Company’s liability is fixed. However, after taking into consideration legal counsel’s evaluation of all actions and claims against the Company, in management’s opinion, the outcome of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

The Company is involved in routine litigation incidental to its business and is a party to legal actions and claims, including, but not limited to, those related to employment and intellectual property. Some of the legal proceedings include claims for compensatory as well as punitive damages. While the final outcome of these matters cannot be predicted with certainty, considering, among other things, the meritorious legal defenses available and liabilities that have been recorded along with applicable insurance, in management’s opinion the outcome of these items will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

The Company has future minimum royalty and advertising obligations due under the terms of certain licenses held by the Company. These minimum future obligations are as follows:

	2011		2012		2013		2014		2015		Thereafter
Minimum royalties		1,693		880		898		916		934		953
Minimum advertising		2,091		1,999		2,059		2,121		2,184		4,169

Minimum royalties are based on both fixed obligations and assumptions regarding the consumer price index. Royalty obligations in excess of minimum requirements are based upon future sales levels. In accordance with these agreements, the Company incurred royalty expense of $953 and $739 for the 12 weeks ended March 26, 2011 and March 27, 2010, respectively.

The terms of certain license agreements also require the Company to make advertising expenditures based on the level of sales. In accordance with these agreements, the Company incurred advertising expense of $684 and $637 for the 12 weeks ended March 26, 2011 and March 27, 2010, respectively.

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WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
March 26, 2011 and March 27, 2010
(Unaudited)

10. RESTRUCTURING AND OTHER TRANSITION COSTS

On January 7, 2009, the Company’s Board of Directors approved a strategic restructuring plan designed to create significant operating efficiencies, improve the Company’s supply chain and create a stronger global platform. On October 7, 2009, the Company announced an expansion of its restructuring plan to include the consolidation of two domestic manufacturing facilities into one and to finalize realignment in certain of the Company’s product creation organizations. The strategic restructuring plan and all actions under the plan, except for certain cash payments, were completed as of June 19, 2010. In fiscal 2010 the Company incurred restructuring and other transition costs of approximately $4,234 ($3,087 on an after-tax basis), or $0.06 per diluted share. The Company incurred restructuring and other transition costs of $1,498 ($1,064 on an after-tax basis), or $0.02 per diluted share, for the 12 weeks ended March 27, 2010.

Restructuring

The Company did not incur restructuring charges in the first quarter of 2011. Prior to completion of the restructuring plan, the Company incurred restructuring charges of $416 ($295 on an after-tax basis), or $0.01 per diluted share, in the first quarter of 2010.

The following is a summary of the activity with respect to a reserve established by the Company in connection with the restructuring plan, by category of costs:

				Non-cash
	Severance and			charges related
	employee			to property and			Facility exit			Other related
	related			equipment			costs			restructuring			Total
Balance at March 27, 2010	$	1,824		$	—		$	1,355		$	382		$	3,561
Charges incurred		315			715			697			96			1,823
Amounts paid or utilized		(1,852	)		(715	)		(1,161	)		(342	)		(4,070	)
Balance at January 1, 2011	$	287		$	—		$	891		$	136		$	1,314
Amounts paid or utilized		(243	)		—			(17	)		(8	)		(268	)
Balance at March 26, 2011	$	44		$	—		$	874		$	128		$	1,046

Other Transition Costs

Incremental costs incurred related to the restructuring plan that do not qualify as restructuring costs under the provisions of FASB ASC Topic 420,Exit or Disposal Cost Obligations, have been included in the Company’s consolidated condensed statements of operations on the line item titled “Restructuring and other transition costs”. These primarily include costs related to closure of facilities, new employee training and transition to outsourced services. All costs included in this caption were solely related to the transition and implementation of the restructuring plan and do not include ongoing business operating costs. There were no other transition costs for the first quarter of 2011. Other transition costs for the first quarter of 2010 were $1,082 ($768 on an after-tax basis).

11. NEW ACCOUNTING STANDARDS

In December 2010, the FASB issued ASU 2010-28,Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts. ASU 2010-28 modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that goodwill impairment exists, an entity must consider whether there are any adverse qualitative factors indicating impairment may exist. ASU 2010-28 is effective for fiscal years, and interim periods within those years, beginning December 15, 2010 (the first quarter of fiscal 2011 for the Company). The adoption of this ASU is not expected to have a material impact on the Company’s goodwill impairment evaluation as the Company does not currently have reporting units with zero or negative carrying amounts.

In December 2010, the FASB issued ASU 2010-29,Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations. ASU 2010-29 requires that if a public entity presents comparative financial statements, the entity should disclose only revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period. This ASU also expands the disclosure requirements regarding supplemental pro forma adjustments to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. ASU 2010-29 is effective prospectively for business combinations for which the acquisition date is on or after the first annual reporting period beginning on or after December 15, 2010 (fiscal 2011 for the Company). The Company will provide the supplementary pro forma information in connection with any future business combinations.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

BUSINESS OVERVIEW

Wolverine World Wide, Inc. (the “Company”) is a leading global designer, manufacturer and marketer of branded footwear, apparel and accessories. The Company’s stated mission is to “Excite Consumers Around the World with Innovative Footwear and Apparel that Bring Style to Purpose.” The Company seeks to fulfill this mission by offering innovative products and compelling brand propositions; delivering supply chain excellence; complementing its footwear brands with strong apparel and accessories offerings; and building a more substantial global consumer-direct footprint.

The Company’s portfolio consists of 12 brands that were marketed in approximately 190 countries and territories as of March 26, 2011. The diverse brand portfolio and broad geographic reach position the Company for robust organic growth. The Company controls distribution of products bearing its brands into the retail channel via subsidiary operations in the United States, Canada, the United Kingdom and certain other countries in continental Europe. In other markets, the Company relies on a network of third-party distributors and licensees to market products bearing its brands. The Company also owned and operated 91 brick-and-mortar retail stores in the United States, Canada and the United Kingdom and operated 41 consumer-direct Internet sites as of March 26, 2011.

2011 FINANCIAL OVERVIEW

• Revenue for the first quarter of 2011 was $330.9 million, 16.1% above first quarter 2010 revenue of $284.9 million, reflecting strong organic growth across all operating groups.

• Accounts receivable increased 21.3% in the first quarter of 2011 compared to the first quarter of 2010, driven primarily by the increase and timing of revenue in the quarter.

• Inventory increased $78.2 million, or 45.5%, in the first quarter of 2011 compared to the first quarter of 2010, reflecting strategic purchases of core product from third-party suppliers prior to announced price increases, inventory for new collections and the excellent outlook for the balance of the fiscal year.

• Operating expenses as a percentage of revenue decreased to 26.7% in the first quarter of 2011, from 27.7% in the first quarter of 2010, reflecting strong revenue growth and continued discipline over general and administrative expenses.

• The effective tax rate in the first quarter of 2011 was 28.0% compared to 29.0% in the first quarter of 2010. This decrease was driven by more favorable dispersion of taxable income to lower tax rate jurisdictions and the impact of the U.S. research and development tax credit that was not in effect in the first quarter of 2010.

• Diluted earnings per share for the first quarter of 2011 were $0.72 per share compared to $0.54 per share for the first quarter of 2010, including the impact of $0.02 per share of restructuring and other transition costs in 2010.

• The Company declared cash dividends of $0.12 per share in the first quarter of 2011 compared to $0.11 per share in the first quarter of 2010, a 9.1% increase.

• During the first quarter of 2011, the Company repurchased approximately 142,000 shares of common stock for approximately $5.1 million.

15

The following is a discussion of the Company’s results of operations and liquidity and capital resources. This section should be read in conjunction with the Company’s consolidated financial statements and related notes included elsewhere in this Quarterly Report.

RESULTS OF OPERATIONS — FIRST QUARTER 2011 COMPARED TO FIRST QUARTER 2010

FINANCIAL SUMMARY — FIRST QUARTER 2011 VERSUS FIRST QUARTER 2010

	2011						2010						Change
				% of						% of
(Millions of Dollars, Except Per Share Data)	$			Total			$			Total			$			%
Revenue
Branded footwear, apparel and licensing	$	304.3			92.0	%	$	261.6			91.8	%	$	42.7			16.3	%
Other business units		26.6			8.0	%		23.3			8.2	%		3.3			14.2	%
Total Revenue	$	330.9			100.0	%	$	284.9			100.0	%	$	46.0			16.1	%
				% of						% of
	$			Revenue			$			Revenue			$			%
Gross Profit
Branded footwear, apparel and licensing	$	127.2			41.8	%	$	108.8			41.6	%	$	18.4			16.9	%
Other business units		10.6			39.8	%		8.8			37.8	%		1.8			20.5	%
Total Gross Profit	$	137.8			41.6	%	$	117.6			41.3	%	$	20.2			17.2	%
Selling, general and administrative expenses	$	88.3			26.7	%	$	78.5			27.5	%	$	9.8			12.5	%
Restructuring and other transition costs		—			—			0.5			0.2	%		(0.5	)		(100.0	%)
Total Operating Expenses	$	88.3			26.7	%	$	79.0			27.7	%	$	9.3			11.8	%
Interest expense — net	$	0.2			0.1	%	$	0.1			0.0	%	$	0.1			100.0	%
Other income — net		(0.6	)		0.2	%		(0.2	)		0.1	%		0.4			200.0	%
Earnings before income taxes		49.8			15.0	%		38.7			13.6	%		11.1			28.7	%
Net Earnings	$	35.9			10.8	%	$	27.5			9.6	%	$	8.4			30.5	%
Diluted earnings per share	$	0.72			—		$	0.54			—		$	0.18			33.3	%

The Company has one reportable segment that is engaged in designing, manufacturing, sourcing, marketing, licensing and distributing branded footwear, apparel and accessories. In January 2011, the Company announced a realignment of the operating groups included within the branded footwear, apparel and licensing reportable segment. As a result, the Company has identified three operating segments within its branded operations:

• Outdoor Group, consisting ofMerrell^®,Chaco^® andPatagonia^® footwear andMerrell^® brand apparel;

• Heritage Group, consisting ofBates^®,HyTest^®,Wolverine^® boots and shoes andWolverine^® brand apparel,Cat^® footwear andHarley-Davidson^® footwear; and

• Lifestyle Group, consisting ofHush Puppies^®,Soft Style^®Cushe^® andSebago^® footwear and apparel.

The Company’s other operating segments, which do not collectively comprise a separate reportable segment, consisted of Wolverine Retail (the Company’s consumer-direct business) and Wolverine Leathers (which markets pigskin leather).

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The following is supplemental information on total revenue:

TOTAL REVENUE — FIRST QUARTER

	2011					2010					Change
			% of					% of
(Millions of Dollars)	$		Total			$		Total			$		%
Outdoor Group	$	138.1		41.7	%	$	113.5		39.8	%	$	24.6		21.7	%
Heritage Group		111.1		33.6	%		93.9		32.9	%		17.2		18.3	%
Lifestyle Group		52.0		15.7	%		51.4		18.1	%		0.6		1.2	%
Other		3.1		1.0	%		2.8		1.0	%		0.3		10.7	%
Total branded footwear, apparel and licensing revenue	$	304.3		92.0	%	$	261.6		91.8	%	$	42.7		16.3	%
Other business units		26.6		8.0	%		23.3		8.2	%		3.3		14.2	%
Total Revenue	$	330.9		100.0	%	$	284.9		100.0	%	$	46.0		16.1	%

REVENUE

Revenue for the first quarter of 2011 increased $46.0 million from the first quarter of 2010, to $330.9 million. Strong organic growth in the branded footwear, apparel and licensing operations, driven by unit volume growth and selected selling price increases, generated $39.9 million of the increase. Changes in foreign exchange rates increased reported revenue for the first quarter by $2.8 million. Revenue from the other business units increased $3.3 million, led by solid organic growth in the consumer-direct business and continued strong demand for proprietary leather from customers of the Wolverine Leathers business. International revenue represented 40.7% of total revenue in the first quarter of 2011 compared to 41.1% in the first quarter of 2010.

The Outdoor Group generated revenue of $138.1 million in the first quarter of 2011, a $24.6 million increase from 2010. TheMerrell^® brand’s revenue increased at a rate in the low twenties compared to the first quarter of 2010, primarily as a result of the launch of the newMerrell^® Barefoot Collection, increased shipments to certain international markets and solid at-once orders from customers.Patagonia^® Footwear’s revenue increased at a rate in the mid twenties in the first quarter of 2011 compared to the first quarter of 2010, due to continued strong demand from key outdoor retailers. TheChaco^® brand grew at a rate in the high twenties compared to the first quarter of 2010, due primarily to positive consumer response to new product introductions.

The Heritage Group generated revenue of $111.1 million during the first quarter of 2011, a $17.2 million increase over the first quarter of 2010. Revenue for theWolverine^® brand increased at a rate in the high teens compared to the first quarter of 2010, due primarily to continued growth in the brand’s core work business.Cat^® Footwear’s revenue increased at a rate in the high teens compared to the first quarter of 2010, reflecting stronger sales in both the U.S. and international markets. TheBates^® footwear business grew revenue at a rate in the mid twenties as it continued shipping boots under a significant military contract awarded in the third quarter of 2010.Harley-Davidson^® Footwear revenue increased at a rate in the low teens compared to the first quarter of 2010 due primarily to strong organic growth in the European market.

The Lifestyle Group recorded revenue of $52.0 million in the first quarter of 2011, a $0.6 million increase from the first quarter of 2010.Hush Puppies^® revenue decreased at a mid single digit rate, as declines in the United States and Europe were partially offset by increases in the third-party licensing business and the Canadian market.Sebago^® brand revenue increased at a mid single digit rate for the first quarter of 2011 compared to the first quarter of 2010 as a result of solid organic growth in the United States and Canada, driven by strong increases in sales to key retailers and investments designed to increase brand awareness.Cushe^® revenue increased at a rate in the high fifties compared to the first quarter of 2010, driven by excellent placement in specialty, outdoor and surf retail accounts along with the addition of more international distributors and independent retailers.

Within the Company’s other business units, Wolverine Retail reported a sales increase in the high teens compared to the first quarter of 2010, as a result of growth from the Company’s e-commerce channel and mid single digit growth in comparable store sales from Company-owned stores. Wolverine Retail operated 91 retail stores worldwide at the end of the first quarter of 2011 compared to 85 retail stores at the end of the first quarter of 2010. The Wolverine Leathers business reported a mid single digit revenue increase, primarily due to continued solid demand for Wolverine’s proprietary pigskin leather from third-party customers.

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GROSS MARGIN

Gross margin for the first quarter of 2011 of 41.6% was 30 basis points higher than the comparable period in the prior year. The increase primarily resulted from the absence of $1.0 million of restructuring and other transition costs that were recorded in the prior year, strategic selling price increases and slightly favorable margin impact from changes in foreign exchange rates, which were partially offset by increased product costs, a slightly higher mix of lower-margin volume direct and special make up goods during the quarter and a reserve related to a Bates boot program with the U.S. military.

OPERATING EXPENSES

Operating expenses of $88.3 million in the first quarter of 2011 increased $9.3 million from $79.0 million in the first quarter of 2010. The increase was primarily due to an increase in advertising and marketing designed to improve brand awareness; an increase in selling expense intended to improve the Company’s ability to serve retail customers; an increase in product development; and an increase in other operating expenses, such as distribution costs and sales commissions that vary with revenue. These increases were partially offset by continued discipline in lowering general and administrative expenses and a $0.5 million reduction in restructuring and other transition costs due to the completion of the Company’s restructuring plan in June 2010.

INTEREST, OTHER AND TAXES

The increase in net interest expense is due primarily to the increase in revolver borrowings in the first quarter of 2011 compared to the first quarter of 2010.

The increase in other income is due primarily to the change in realized gains or losses on foreign denominated assets and liabilities.

The Company’s effective tax rate for the first quarter of 2011 was 28.0%, compared to 29.0% in the first quarter of 2010. The lower effective tax rate is driven by a more favorable dispersion of taxable income to lower tax rate jurisdictions and the inclusion of a U.S. research and development tax credit in the current year’s first quarter that was not in effect in the first quarter of 2010.

NET EARNINGS AND EARNINGS PER SHARE

As a result of the revenue, gross margin and expense changes discussed above, the Company had net earnings of $35.9 million in the first quarter of 2011 compared to $27.5 million in the first quarter of 2010, an increase of $8.4 million.

Diluted net earnings per share increased 33.3% in the first quarter of 2011 to $0.72 from $0.54 in the first quarter of 2010. The increase was primarily attributable to revenue growth, modestly improved gross margin and lower restructuring and other transition costs. The Company repurchased approximately 142,000 shares of common stock in the first quarter of 2011 for approximately $5.1 million and repurchased approximately 884,000 shares in the first quarter of 2010 for approximately $24.6 million, both of which lowered the average shares outstanding in the first quarter of 2011.

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LIQUIDITY AND CAPITAL RESOURCES

									Change from
	March 26,			January 1,		March 27,			January 1,			March 27,
(Millions of dollars)	2011			2011		2010			2011			2010
Cash and cash equivalents	$	91.6		$	150.4	$	84.9		$	(58.8	)	$	6.7
Accounts receivable		251.9			196.5		207.7			55.4			44.2
Inventories		250.0			208.7		171.8			41.3			78.2
Accounts payable		60.4			64.1		37.5			(3.7	)		22.9
Other current accrued liabilities		79.7			76.6		72.8			3.1			6.9
Interest-bearing debt		30.5			1.0		1.0			29.5			29.5
Cash used in operating activities		(82.8	)				(43.5	)					(39.3	)
Additions to property, plant and equipment		4.3					2.2						2.1
Depreciation and amortization		3.8					3.9						(0.1	)

Cash and cash equivalents of $91.6 million as of March 26, 2011 was $6.7 million higher than the balance at March 27, 2010, driven by the significantly improved revenue and profit performance partially offset by a contribution to the pension plan and incremental investments in working capital designed to support future growth. Accounts receivable increased 21.3% compared to the first quarter of 2010, driven primarily by the increase and timing of revenue in the quarter. No single customer accounted for more than 10% of the outstanding accounts receivable balance at March 26, 2011. As expected, inventory levels at the end of the first quarter of 2011 increased substantially from the first quarter of 2010, up 45.5%. The increase is primarily due to accelerated purchases of core product ahead of announced factory cost increases, the positive outlook for fiscal year 2011 and inventory to support new collections.

The increase in accounts payable as of March 26, 2011 compared to March 27, 2010 was primarily attributable to the higher inventory levels and the timing of cash payments to vendors. The increase in other current accrued liabilities was due primarily to an increase in taxes payable due to timing of payments and increases in advertising accruals, partially offset by a decrease in the reserve for restructuring charges.

The Company’s credit agreement with a bank syndicate provides the Company with access to capital under a revolving credit facility, including a swing-line facility and letter of credit facility, in an initial aggregate amount of up to $150.0 million. This amount is subject to increase up to a maximum aggregate amount of $225.0 million under certain circumstances. The revolving credit facility is used to support working capital requirements and other business needs. The Company had $30.0 million outstanding under the Company’s revolving credit facility at March 26, 2011 and no amounts outstanding at March 27, 2010. The Company considers balances drawn on the revolving credit facility, if any, to be short-term in nature. The Company was in compliance with all debt covenant requirements at March 26, 2011 and March 27, 2010 under the Company’s revolving credit facility. Proceeds from the revolving credit facility, along with cash flows from operations, are expected to be sufficient to meet working capital needs for the foreseeable future. Any excess cash flows from operating activities are expected to be used to purchase property, plant and equipment, pay down debt, fund internal and external growth initiatives, pay dividends or repurchase the Company’s common stock.

Net cash used in operating activities for the first quarter of 2011 was $82.8 million compared to $43.5 million for the first quarter of 2010, a change of $39.3 million. Stronger earnings performance, lower cash payments for restructuring and the timing of tax expense payments were more than offset by increased pension contributions and higher investments in working capital to support future growth.

19

The majority of capital expenditures during the quarter were for information system enhancements, manufacturing equipment and building improvements. The Company leases machinery, equipment and certain warehouse, office and retail store space under operating lease agreements that expire at various dates through 2023.

The Company’s Board of Directors approved a common stock repurchase program on February 11, 2010 (the “February 2010 Program”). The February 2010 Program authorizes the repurchase of up to $200.0 million in common stock over a four-year period. The Company repurchased 142,198 shares at an average price of $35.57 in the first quarter of 2011 and repurchased 683,808 shares at an average price of $28.18 per share during the first quarter of 2010 under the February 2010 Program. The Company has $149.1 million remaining available to repurchase shares under the February 2010 Program as of the end of the first quarter of 2011. The Company’s Board of Directors approved a common stock repurchase program on April 19, 2007 (the “April 2007 Program”). The April 2007 Program authorized the repurchase of up to 7.0 million shares of common stock over a 36-month period beginning on the effective date of the program. The Company repurchased 199,996 shares at an average price of $26.52 per share during the first quarter of 2010 under the April 2007 Program, which exhausted the number of shares authorized for repurchase under this program. The primary purpose of the stock repurchase programs is to increase stockholder value. The Company intends to continue to repurchase shares of its common stock under the February 2010 Program from time to time in open market or privately negotiated transactions, depending upon market conditions and other factors.

The Company declared dividends of $0.12 per share, or $5.3 million, for the first quarter of 2011 and $0.11 per share, or $5.4 million, for the first quarter of 2010. The 2011 dividend is payable on May 2, 2011 to shareholders of record on April 1, 2011.

CRITICAL ACCOUNTING POLICIES

The preparation of the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates these estimates. Estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Historically, actual results have not been materially different from the Company’s estimates. However, actual results may differ materially from these estimates under different assumptions or conditions.

The Company has identified the critical accounting policies used in determining estimates and assumptions in the amounts reported in its Management Discussion and Analysis of Financial Conditions and Results of Operations in its Annual Report on Form 10-K for the fiscal year ended January 1, 2011. Management believes there have been no changes in those critical accounting policies.

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ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

The information concerning quantitative and qualitative disclosures about market risk contained in the Company’s Annual Report on Form 10-K for its fiscal year ended January 1, 2011 is incorporated herein by reference.

The Company faces market risk to the extent that changes in foreign currency exchange rates affect the Company’s foreign assets, liabilities and inventory purchase commitments and to the extent that its long-term debt requirements are affected by changes in interest rates. The Company manages these risks by attempting to denominate contractual and other foreign arrangements in U.S. dollars. The Company does not believe that there has been a material change in the nature of the Company’s primary market risk exposures, including the categories of market risk to which the Company is exposed and the particular markets that present the primary risk of loss to the Company. As of the date of this Quarterly Report on Form 10-Q, the Company does not know of or expect there to be any material change in the near-term in the general nature of its primary market risk exposure.

Under the provisions of FASB ASC Topic 815,Derivatives and Hedging, the Company is required to recognize all derivatives on the balance sheet at fair value. Derivatives that are not qualifying hedges must be adjusted to fair value through earnings. If a derivative is a qualifying hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in accumulated other comprehensive income until the hedged item is recognized in earnings.

The Company conducts wholesale operations outside of the United States in the United Kingdom, continental Europe and Canada where the functional currencies are primarily the British pound, euro and Canadian dollar, respectively. The Company utilizes foreign currency forward exchange contracts to manage the volatility associated with U.S. dollar inventory purchases made by non-U.S. wholesale operations in the normal course of business. At March 26, 2011 and March 27, 2010, the Company had outstanding forward currency exchange contracts to purchase $111.7 million and $75.4 million, respectively, of U.S. dollars with maturities ranging up to 336 days.

The Company also has production facilities in the Dominican Republic and sourcing locations in Asia, where financial statements reflect the U.S. dollar as the functional currency. However, operating costs are paid in the local currency. Royalty revenue generated by the Company from third-party foreign licensees is calculated in the licensees’ local currencies, but paid in U.S. dollars. Accordingly, the Company’s reported results are subject to foreign currency exposure for this stream of revenue and expenses.

Assets and liabilities outside the United States are primarily located in the United Kingdom, Canada and the Netherlands. The Company’s investments in foreign subsidiaries with a functional currency other than the U.S. dollar are generally considered long-term. Accordingly, the Company does not hedge these net investments. For the quarter ended March 26, 2011, the weakening of the U.S. dollar compared to foreign currencies increased the value of these investments in net assets by $7.1 million. For the quarter ended March 27, 2010, the strengthening of the U.S. dollar compared to foreign currencies decreased the value of these investments in net assets by $7.9 million. These changes resulted in cumulative foreign currency translation adjustments at March 26, 2011 and March 27, 2010 of $18.7 million and $6.6 million, respectively, that are deferred and recorded as a component of accumulated other comprehensive income in stockholders’ equity.

Because the Company markets, sells and licenses its products throughout the world, it could be affected by weak economic conditions in foreign markets that could reduce demand for its products.

The Company is exposed to changes in interest rates primarily as a result of its revolving credit agreement. As of March 26, 2011, the Company had $30.0 million outstanding on its revolving credit agreement. As of March 27, 2010, the Company had no outstanding balance on its revolving credit agreement.

The Company does not enter into contracts for speculative or trading purposes, nor is it a party to any leveraged derivative instruments.

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ITEM 4. Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on and as of the time of such evaluation, the Company’s management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures, as defined in Securities Exchange Act Rule 13a-15(e), were effective as of the end of the period covered by this report. There have been no changes during the quarter ended March 26, 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

					Total Number
					of Shares		Maximum
					Purchased		Dollar Amount
					as Part of		that
	Total		Average		Publicly		May Yet
	Number of		Price		Announced		Be Purchased
	Shares		Paid per		Plans or		Under the Plans
Period	Purchased		Share		Programs		or Programs
Period 1 (January 2, 2011 to January 29, 2011)
Common Stock Repurchase Program(1)		—	$	—		—	$	154,110,177
Employee Transactions(2)		1,527		31.88		—
Period 2 (January 30, 2011 to February 26, 2011)
Common Stock Repurchase Program(1)		—	$	—		—	$	154,110,177
Employee Transactions(2)		44,430		36.09		—
Period 3 (February 27, 2011 to March 26, 2011)
Common Stock Repurchase Program(1)		142,198	$	35.57		142,198	$	149,051,933
Employee Transactions(2)		24,246		36.41		—
Total for Quarter ended March 26, 2011
Common Stock Repurchase Program(1)		142,198	$	35.57		142,198	$	149,051,933
Employee Transactions(2)		70,203		36.11		—

(1)

The Company’s Board of Directors approved a common stock repurchase program on February 11, 2010. This program authorized the repurchase of up to $200.0 million of common stock over a four-year period, commencing on the effective date of the program. All shares repurchased during the period covered by this Quarterly Report on Form 10-Q (other than repurchases pursuant to the “Employee Transactions” set forth above) were purchased under publicly announced programs.

(2)

Employee transactions include: (1) shares delivered or attested in satisfaction of the exercise price and/or tax withholding obligations by holders of employee stock options who exercised options, and (2) restricted shares withheld to offset statutory minimum tax withholding that occurs upon vesting of restricted shares. The Company’s employee stock compensation plans provide that the shares delivered or attested to, or withheld, shall be valued at the closing price of the Company’s common stock on the date the relevant transaction occurs.

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ITEM 6. Exhibits

The following documents are filed as exhibits to this report on Form 10-Q:

Exhibit
Number		Document
	3.1	Restated Certificate of Incorporation. Previously filed as Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the year ended December 30, 2006. Here incorporated by reference.
	3.2	Amended and Restated Bylaws. Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on October 15, 2008. Here incorporated by reference.
	31.1	Certification of Chairman, Chief Executive Officer and President under Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2	Certification of Senior Vice President, Chief Financial Officer and Treasurer under Section 302 of the Sarbanes-Oxley Act of 2002.
	32	Certification pursuant to 18 U.S.C. §1350.
	101	The following materials from the Company’s Quarterly Report on Form 10-Q for the twelve weeks ended March 26, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Condensed Balance Sheets as of March 26, 2011, January 1, 2011 and March 27, 2010, (ii) Consolidated Condensed Statements of Operations for the twelve weeks ended March 26, 2011 and March 27, 2010, (iii) Condensed Consolidated Condensed Statements of Cash Flows for the twelve weeks ended March 26, 2011 and March 27, 2010, and (iv) Notes to Consolidated Condensed Financial Statements, tagged as blocks of text.*

* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
May 3, 2011	/s/ Blake W. Krueger
Date	Blake W. Krueger
	Chairman, Chief Executive Officer and President
	(Duly Authorized Signatory for Registrant)
May 3, 2011	/s/ Donald T. Grimes
Date	Donald T. Grimes
	Senior Vice President, Chief Financial Officer and Treasurer
	(Principal Financial Officer and Duly Authorized
	Signatory for Registrant)

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EXHIBIT INDEX

Exhibit
Number		Document
	3.1	Restated Certificate of Incorporation. Previously filed as Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the year ended December 30, 2006. Here incorporated by reference.
	3.2	Amended and Restated Bylaws. Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on October 15, 2008. Here incorporated by reference.
	31.1	Certification of Chairman, Chief Executive Officer and President under Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2	Certification of Senior Vice President, Chief Financial Officer and Treasurer under Section 302 of the Sarbanes-Oxley Act of 2002.
	32	Certification pursuant to 18 U.S.C. §1350.
	101	The following materials from the Company’s Quarterly Report on Form 10-Q for the twelve weeks ended March 26, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Condensed Balance Sheets as of March 26, 2011, January 1, 2011 and March 27, 2010, (ii) Consolidated Condensed Statements of Operations for the twelve weeks ended March 26, 2011 and March 27, 2010, (iii) Condensed Consolidated Condensed Statements of Cash Flows for the twelve weeks ended March 26, 2011 and March 27, 2010, and (iv) Notes to Consolidated Condensed Financial Statements, tagged as blocks of text.*

* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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