Wolverine Worldwide is maintaining its full-year outlook that calls for total FY22 revenues of $2.775 to $2.85 billion. This represents a 15 to 18 percent year-over-year increase with the DTC segment representing approximately 30 percent of global revenues and the international segment another 35 percent. Wolverine’s top three brands, Saucony, Merrell and Sweaty Betty, will account for two-thirds of total annual revenues, the company said when also pegging the annual gross margin rate at 43.0 percent. According to senior management, new products arriving in the second and third quarters will be catalysts for growth.
Since the start of its current fiscal year 2022, the company has adopted a strategic approach that focuses on accelerating total shareholder return. Boston Consulting Group was recently brought on board to help management with a comprehensive corporate strategic review through that effort. The effort is in its early stages. Additionally, the Sperry parent has also embarked on a cost-efficiency review of its operations. Senior management said the most important outcome is making sure Wolverine puts its “resources behind our growth strategies.”
During the first quarter, the company was saddled with persistent supply chain challenges and macro headwinds but was still able to exceed revenue and earnings per share guidance. Several styles that were to be launched during the period, including the Moab III from Merrell and Saucony’s Tempest, had to be delayed until the second quarter. Total revenues rose 20 percent to $614.8 million from $510.7 million, with four of Wolverine’s five leading brands posting revenue gains. DTC sales rose 24 percent and e-commerce revenues, while not meeting internal projections, rose 16 percent. Revenues outside the U.S. were 35 percent higher, but only 10 percent when excluding Sweaty Betty. Wolverine reported a recovery in its top global markets and said sales in its joint venture in China were strong. While the company’s own business in the EMEA was described as down due to “some softness in EU trends,” the international distributor segment gained momentum. Operating profit fell 66 percent to $19.6 million from $58.1 million. Adjusted operating margin was 8.1 percent as net income slipped 78 percent to $8.4 million from $38.4 million.
Merrell, which suffered a 1.5 percent first-quarter sales dip to $147.9 million, is forecast to generate hi-teens growth in the second quarter and for the full year. Saucony’s 3.7 percent sales gain to $106.4 million was described as “slightly exceeding expectations” despite delayed new product introductions. The brand is forecast to achieve double-digit sales growth in the second quarter and hi-teens expansion for the full year. Sperry’s first-quarter revenues jumped 18.7 percent to $67.4 million on improving trends in the boat shoe category. The brand is predicted to report low-teens sales growth for the full year. Wolverine brand sales increased 12 percent to $58.8 million and should reach mid-teens growth in 2022. Sweaty Betty, which may be contemplating a return to U.S. retail, generated 3 percent constant-currency sales growth to the equivalent of $53.6 million as it opened four additional doors in the U.K.
