Wolverine is now looking at spending many millions related to contaminated groundwater caused by the company’s toxic tannery waste dumped in sites around northern Kent county for decades.
Just this year, the company expects to spend about $3 million, officials told analysts during a quarterly conference call on Wednesday, Nov. 8.
While the issue has been covered heavily by local media, it has been reported in national publications that might be read by investors outside of Michigan.
"We have been as proactive as possible and conservative and transparent," Krueger told analysts in his first public comments about the water contamination.
"We are working closely with all state and local agencies."
A Grand Rapids law firm is laying the groundwork for class action suits to force Wolverine to pay residents for a loss in property value, health issues and cleanup of the former dumping sites.
Litigation, especially a class action suit, likely would have the biggest impact on stock prices, says Erik Gordon, a professor at the University of Michigan’s Ross School of Business.
"Just the uncertainty about potentially large claims could make investors back off the stock."
On Wednesday, Nov. 8, the shoe company reported third quarter revenues slipped 3.7 percent to $581.3 million, and profits fell 51.9 percent to $23.2 million, compared to the same period last year.
Publicly traded companies like Wolverine are required to let shareholders know of potential financial problems in quarterly 10k reports, which Wolverine is expected to file this week.