Dive Brief:
- Wolverine World Wide, Inc. saw third quarter revenue of $440.2 million, down 16.6% year over year from $527.7 million, according to a Thursday earnings report.
- By brand, Sweaty Betty revenue rose 3% for the period and Merrell was up 1.4%. However, those increases were offset by a 12.3% decline at the Wolverine brand and a 10% drop at Saucony.
- The company revised its fiscal 2024 outlook and said it now expects revenue in the range of $1.730 to $1.745 billion, up from a previous Q2 forecast of $1.71 to $1.73 billion. The new projection still represents a decline of between 13.1% to 12.4% compared to 2023.
Dive Insight:
The company has been implementing a corporate restructuring plan, first announced at the end of 2023, which is designed to deliver as much as $215 million in annual savings.
To some extent, the plan seems to be working, albeit slowly.
Losses have slowed since Wolverine World Wide’s second quarter, when it posted a 27.8% year over year revenue decline. Chris Hufnagel, president and CEO, said in Thursday’s earnings report that Q3 results were better than expected, with the Merrell and Saucony brands outpacing the company’s forecast.
“We drove another quarter of record gross margin and more than doubled earnings versus last year,” Hufnagel said in the report. “Today, we’re moving forward with a stronger platform for growth — a rationalized portfolio of authentic brands positioned in attractive categories, a much healthier balance sheet with our restructuring and stabilization efforts largely behind us, and finally, a talented, aligned, and motivated team driving the business each day.”
While the company didn’t disclose specific regional earnings, reported DTC revenue was down 17.7%, and reported international revenue was down 6.6%.
Financial results excluded the impact of Keds, which was sold to Designer Brands in February 2023, the U.S. Leathers business, which was sold to New Balance in August 2023, the Asia-based Leathers business, which was sold to Interhides Public Company Limited in December 2023, and the Sperry business, which was sold to Authentic Brands Group in January 2024.
The company expects its year-end net debt to drop $195 million year-over year to about $545 million, compared to a previous outlook of $565 million.
“While pleased with the continued progress and early proof points to our strategies, we remain intently focused on driving the business forward to realize the full potential of our brands and delivering better returns to our shareholders,” Hufnagel said.
