Wolverine reports sales, profit miss; restructures brand portfolio
Wolverine Worldwide Inc. announced on Wednesday sales for the third quarter rose close to 9%, on the back of surging growth in U.S. group's international market. The firm also revealed plans to rejig its brand portfolio.
The Rockford, Michigan-based company said revenues for the third quarter ending October 1 gained 8.6% to $691.4 million, driven by a 33% uptick in international revenues to reach $303 million. Direct-to-consumer revenue was up 4.5% to $160 million, the company added.
The owner of Merrell, Sperry and Sweaty Betty brands returned to profit in the third quarter, with net income totalling $38.8 million, compared to a net loss of $0.8 million, in the prior-year quarter.
However, both revenue and profit came in below the company's expectations, "reflecting ongoing supply chain disruption, heightened promotional activity at retail, and deteriorating macro conditions."
"We are facing congestion in our own U.S. distribution centers and inland transportation networks and many wholesale customers are currently dealing with heavier inventories and warehouse constraints," said Brendan Hoffman, Wolverine Worldwide's president and chief executive officer.
"These headwinds have resulted in certain shipping delays that impacted most of our brands. Sperry’s performance was further impacted by softer-than-expected trends in the boat category and a sluggish start to boot sales due to unusually warm weather. Despite these external headwinds, we saw notable strength in our international business, and within our portfolio Merrell continued its strong momentum delivering 39% constant currency growth.”
Coinciding with the earnings update, Wolverine said it is reorganizing its brand group structure into 'Active' (Merrell, Saucony, Sweaty Betty, and Chaco footwear); 'Work' (Wolverine, Cat, Bates, Harley-Davidson, HyTest); and 'Lifestyle' groups (Sperry, Ked, and Hush Puppies) -- to better leverage common product and consumer categories and align with the company's view of its global portfolio.
The company said it has also appointed new leaders of the brand groups. Chris Hufnagel has been appointed as president of the Active group. The Saucony and Chaco brands will now report to Hufnagel, who will also continue leading the Merrell brand. The Sweaty Betty brand will continue reporting to Hoffman.
Likewise, Tom Kennedy has been appointed as president of the Work group, and the Wolverine, Cat, Bates, Harley-Davidson, and Hytest brands will continue reporting to him.
Finally, Katherine Cousins has been appointed as president of the Lifestyle group. The Hush Puppies brand will now report to Cousins, who joined the company as president of Sperry in 2021 and has also overseen Keds since the beginning of 2022.
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