Wolverine Worldwide’s turnaround efforts continued in the second quarter as president and chief executive officer Chris Hufnagel reported better-than-expected revenue in the period despite seeing overall sales declines.
On Wednesday, the Rockford, Mich.-based company reported that revenues decreased 27.8 percent in the second quarter to $425.2 million, down from $589.1 million the same time last year. Ongoing total revenue in Q2 – which excludes the impact of sold assets like Keds, Sperry and the Wolverine leather business – decreased 18.4 percent to $424.8 million, down from $520.8 million the prior year.
While these results are still a marked decrease, Wolverine’s performance this quarter is up considering analysts were predicting sales for the period to come in at $413.9 million at the high end of estimates, according to Yahoo Finance.
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By brand, Merrell reported total revenues of $142.7 million in Q2, down 19.2 percent from $176.7 million the same time last year. At Saucony, revenues in the quarter declined 28 percent to $102 million versus $141.7 million in Q2 2023. The company’s namesake Wolverine brand reported revenues down 3.1 percent to $40.1 million versus $41.4 million the same time last year. And Sweaty Betty broke even in the quarter with revenues of $44 million versus $44 million in the prior year.
The company’s international revenue was down 19.3 percent to $216 million compared to the prior year, while its direct-to-consumer revenue was down 14.4 percent to $113.4 million compared to the same period last year. Net debt at the end of the quarter was $666 million, down $271 million compared to the prior year and down $75 million from the prior year end.
“We delivered better-than-expected revenue and earnings in the second quarter, while continuing to execute our ambitious turnaround plan,” Hufnagel said in a statement. “A year ago, we began to take fast and bold actions to build a new and better company – focused squarely on our consumer and our new global brand-building model. Our team has executed with tremendous pace and urgency, driving substantial progress across the business. We’ve significantly lowered our debt and inventory levels, while meaningfully expanding our gross margin, and we’re beginning to see proof points of an inflection to growth – driven by stronger product pipelines and improved demand creation.”
Looking ahead, the company expects total revenue from its ongoing business to be approximately $1.71 to $1.73 billion for the full fiscal year 2024. This range compares to the previous outlook of approximately $1.68 to $1.73 billion and represents a decline of approximately 14.2 percent to 13.2 percent.
Diluted earnings per share for fiscal 2024 are now expected to be in the range of 53 cents to 63 cents and adjusted diluted earnings per share in the range of 75 cents to 85 cents. This compares to the previous outlook for diluted earnings per share in the range of 43 cents to 63 cents and adjusted diluted EPS between 65 cents and 85 cents.
“Every day we’re making progress to position the company for sustained growth in the future and, ultimately, to deliver better performance and greater returns for our shareholders,” the CEO added.
