Even though overall sales were down for Wolverine Worldwide in the first quarter of 2024, the company’s turnaround efforts seem to be taking hold as president and chief executive officer Chris Hufnagel reported better-than-expected revenue in the period.
On Wednesday, the Rockford, Mich.-based company reported that revenues decreased 34 percent in the first quarter to $394.9 million, down from $599.4 million the same time last year. Ongoing total revenue in Q1 – which excludes the impact of sold assets like Keds, Sperry and the Wolverine leather business – decreased 24.5 percent to $390.8 million, down from $517.5 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 $363.08 million at the high end of guidance, according to Yahoo Finance.
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By brand, Merrell reported total revenues of $133.0 million in Q1, down 26.2 percent from $180.3 million the same time last year. At Saucony, revenues in the quarter declined 24.5 percent to $100.1 million versus $132.6 million in Q1 2023. The company’s namesake Wolverine brand reported revenues down 20.3 percent to $41.2 million versus $51.7 million the same time last year. And Sweaty Betty dipped 4.8 percent in the quarter to $45.2 million versus $47.5 million in the prior year.
The company’s international revenue was down 31.5 percent to $178.5 million compared to the prior year, while its direct-to-consumer revenue was down 15.9 percent to $106.4 million compared to the same period last year. Net debt at the end of the quarter was $685 million, down $380 million compared to the prior year and down $55 million from the prior year end.
“We are beginning to see proof points emerge as early validation of our strategy and execution – including record gross margin in the quarter, acceleration in our direct-to-consumer business, improving order trends across our wholesale operations, and a healthier balance sheet,” Hufnagel said.
Looking ahead, the company said it is reaffirming its earnings guidance and updating its revenue outlook for the full year to reflect recent business model changes.
Wolverine Worldwide now expects revenue from its ongoing business to be approximately $1.68 billion to $1.73 billion for the full fiscal year 2024, which is adjusted for the new licensing model recently announced on May 1 for its Merrell and Saucony kids’ business. This range represents a decline compared to 2023 of approximately 15.7 percent to 13.2 percent and constant currency decline of approximately 15.5 percent and 13.0 percent.
Diluted earnings per share for the full year 2024 are expected to be between 43 cents and 63 cents, and adjusted diluted earnings per share are expected to be between 65 cents and 85 cents. These full-year EPS projections include an approximate 10 cent negative impact from foreign currency exchange rate fluctuations.
“We’re executing our turnaround and transformation with pace and continue to make meaningful progress towards realizing the full potential of our brands, platforms, and teams,” the CEO added. “While we have more work to do, I’m encouraged by the great work of our teams and the power of our brand-building model – focused squarely on creating awesome products, telling amazing stories, and driving the business each and every day.”
