Wolverine Worldwide’s revenue up 12.9% in Q2

Wolverine Worldwide posted revenue of $713.6 million in the second quarter, representing growth of 12.9 per cent versus the prior year. Excluding Sweaty Betty, revenue was $666.2 million, a record for the quarter and up 17.2 per cent compared to 2019. The international business was especially strong, up 45.3 per cent to $295.2 million, including Sweaty Betty.

Selling, General & Administrative (SG&A) expenses of $139.2 million included a $90 million gain related to the sale of the Champion trademarks that occurred on June 30. Adjusted SG&A expenses of $228.5 million, or 32 per cent of revenue, was 10 basis points higher than the prior year including Sweaty Betty, the company said in a press release.

"Despite a slowdown in June shipments, we are pleased with delivering record organic revenue in the quarter. We are encouraged by 14 per cent growth in our largest brand Merrell, and 45 per cent growth in our international business. We faced unplanned headwinds related to elevated customer inventory, a stronger US dollar, and some lingering supply chain delays, but our operating margin was better-than-expected in the quarter. While we continue to expect sequential growth acceleration in the second half, we now have a revised outlook for the back-half of this year that assumes higher promotional activity and elevated inventory in our wholesale channels," said CEO Brendan Hoffman.

"During the second quarter, we made very meaningful progress on the important strategy work we started earlier in the year and remain excited about the future growth potential of our brands."

"The company has performed well in the first half of 2022. Several factors have impacted our outlook for the second half, including certain negative trends that accelerated in June," said CFO Mike Stornant. "We now expect a stronger US dollar, inflation, excess inventory across channels and changing consumer behavior will have a more meaningful negative impact on our industry and the company for the remainder of the year. We are adjusting our full-year outlook accordingly."

For 2022, revenue is expected to be in the range of $2.74 billion to $2.79 billion, representing growth of approximately 14 per cent to 16 per cent. Foreign currency exchange rate fluctuations are expected to have approximately $72 million (or 3 per cent) negative impact on full-year reported growth.