“In the third quarter, we achieved several critical milestones as we took decisive action to stabilize and transform the Company, while delivering revenue and earnings in line with our expectations. We continued to reshape our portfolio, reduce our inventory, and redesign the Company to become consumer-obsessed brand builders – focused squarely on building compelling products and telling amazing stories. We announced additional details on these actions in another press release this morning. While market conditions remain challenging, we're taking the necessary steps to reinvigorate our brands and position the Company for profitable growth as conditions improve”, commented Chris Hufnagel, President and Chief Executive Officer of Wolverine Worldwide.

Third Quarter Results

In the third quarter of fiscal 2023, the company’s revenue totalled 527.7 million US dollars, declining by 23.7%, or 24.7% on a constant currency basis, on a comparable basis to the same period of last year, with almost all the brands in red.

In this period, Merrell’s revenue decreased by 24.3% (or by 25.2% on a constant currency basis) year-over-year to 157.0 million US dollars; Saucony’s revenue was down by 14.0%  (or by 14.6% on a constant currency basis) year-over-year to 116.4 million US dollars; and Sperry’s revenue plunged by 41.4% (or by 41.5% on a constant currency basis) year-over-year to 46.2 million US dollars.

At the same time, the Wolverine brand performed slightly better in comparison, recording a revenue decline of 4.7% year-over-year on both basis to 46.2 million US dollars. The Sweaty Betty, on the other hand, saw its revenue increase by 19% (or by 11.1% on a constant currency basis) year-over-year, reaching 45.0 million US dollars.

Wolverine Worldwide’s gross margin expanded to 40.8% in the third quarter of the current fiscal year from 40.2% in the same period of 2022, “due to profit improvement initiatives and channel mix, partially offset by the sale of higher-cost inventory due to transitory supply chain costs from 2022 and higher mix of closeout sales in the quarter”.

Net earnings attributable to the company totalled 8.6 million US dollars in the third quarter of the year, with diluted earnings per share of 0.11 US dollars, as compared to 39.0 million US dollars, or diluted earnings per share of 0.48 US dollars, recorded in the same quarter a year ago.

Fourth Quarter and Full Year Guidance

Wolverine Worldwide has reduced its fourth quarter guidance due to an expected "mixed" performance across the brand portfolio. It is now anticipating reaching a revenue in the range of 515 million to 525 million US dollars and adjusted diluted earnings of (0.30) US dollars to (0.25) US dollars.

For the full year, the company is expecting the revenue from its ongoing business to be approximately 2.19 billion US dollars to 2.20 billion US dollars, down by around 13, as compared to 2022. Diluted earnings per share should range from 0.35 US dollars to 0.40 US dollars and adjusted diluted earnings per share are expected to be between 0.05 US dollars and 0.10 US dollars.

Transformation initiatives

Wolverine Worldwide has announced a set of initiatives to better position the company for “profitable growth”. These included the creation of a new strategic centre focused on innovation, insights, and trends; a new global licensing function to unlock the portfolio’s full commercial opportunity around the world; a new global planning function designed to significantly improve the integrated management of demand, inventory and the supply chain; a new set of advanced digital product management, design, and development tools; and consolidate North American commercial structure, aligning the Company’s Canadian operations with those in the US.