Saucony’s turnaround under parent Wolverine Worldwide is moving forward. In Q2, the athletic brand recorded a 900-basis-point increase in its year-over-year contribution as new products from the brand continued to flow into markets. These include the Ride, Guide 17 earlier this year and the Triumph 17 more recently. In July, the business, which is addressing both the performance and lifestyle segments, introduced its premium max cushioning style, the Triumph 22, and was the title sponsor of the London 10K. In the UK, the brand saw its dotcom business grow by 40 percent, contributing to a more than 20 percent increase in the commerce channel globally in the period.
Saucony’s overall Q2 revenues declined by 28 percent year-over-year to $102.0 million from $141.7 million in Q2/23.
“I think the feedback and results are early proof points that we’re doing the right things. At the same time, no one here is declaring victory,” said Chris Hufnagel, President and CEO of Wolverine. “I think the feedback from key partners on where the product pipeline is certainly positive…We’ve made a hard pivot as we think about Saucony’s strategy, the product line, where we want to sell, and how we want to talk about those products. And I’m really encouraged by the reception that Saucony has had in the marketplace.”
Wolverine delivered better-than-expected sales and earnings in Q2 as it worked aggressively to re-engage its US wholesale partners and distributors around the world. Group revenues from ongoing business hit $424.8 million, exceeding the outlook by 3.6 percent due to improving demand trends and supply chain execution. Approximately $10 million of the increase was related to a timing shift of orders between Q2 and Q3.
Amid its admittedly “ambitious turnaround plan,” Wolverine reported a 37 percent drop in Q2 operating income to $29.1 million and a 36 percent decline in net income to $15.6 million from $24.4 million in the year-ago period. However, the company improved its year-over-year gross margin by 440 basis points to 43.1 percent from 38.7 percent.
With its solid H1 results and the development of its wholesale and distributor business going forward, Wolverine increased its FY24 revenue outlook from continuing business to a range of $1.71 to $1.73 billion. Active segment annual sales are forecast to fall by a mid-teens percentage, with workgroup FY24 sales down by high single digits year over year.
“We’re seeing momentum in the brands from the increased new product introductions that we have in the market, improvements in our product design, and cleaner and lower inventories at retail,” said Taryn Miller, CFO for Wolverine Worldwide.
