Wolverine World Wide, a prominent player in the footwear and apparel industry, has reported a significant revenue drop of 16.6% for the third quarter (Q3) of 2024, tallying $440.2 million. This decline marks a contrast to the prior year’s performance, yet the company has managed to boost its gross margin by 450 basis points, reaching 45.3%. During this quarter, the firm also achieved a reduction in net debt, which now stands at $563 million.
Looking ahead, Wolverine anticipates a revenue projection for the full fiscal year 2024 to lie between $1.730 billion and $1.745 billion. It expects to maintain a gross margin of 44.5% and adjusted earnings per share (EPS) in the range of $0.80 to $0.90. The firm is strategically positioned to reduce its inventory by approximately $85 million.
For the period ending September 28, 2024, Wolverine World Wide’s Q3 results showed a stark revenue reduction compared to the same quarter in 2023. The improvements in gross margin were attributed to the lowered costs in the supply chain and reduced sales of obsolete inventory. The ending inventory of $285.5 million represents a staggering 49.4% drop year-over-year.
The company’s operating expenses saw a decrease of 12.8%, totaling $164 million, and the operating margin improved to 8.0%. Notably, diluted earnings per share increased dramatically by 154.5%, settling at $0.28. On a non-GAAP basis, the adjusted gross margin was similarly strong at 45.3%, with adjusted operating expenses decreasing by 2.8%. This contributed to an adjusted operating margin rise of 210 basis points.
Analyzing revenue streams, direct-to-consumer sales reported a 17.7% decrease, accounting for $112.4 million. Segment-wise, Merrell saw a slight revenue increase to $159.2 million, while Saucony experienced a decline of 10%, totaling $104.8 million. Wolverine’s sales also dipped by 12.3% to $49.4 million, although Sweaty Betty enjoyed a modest increase of 3% with revenues of $46.3 million. International sales revenue fell by 6.6% to $213.8 million.
CEO Chris Hufnagel shared an optimistic perspective, highlighting that improved revenue and earnings were driven by strong performances from Merrell and Saucony. He emphasized ongoing efforts to revitalize the company, underscoring a more robust growth platform supported by a rationalized portfolio and a healthier balance sheet.
In the first nine months of 2024, Wolverine reported revenues of $1.260 billion, a decrease from $1.716 billion in 2023. The cost of goods sold also reflected a significant decline, which positively impacted the gross margin that stood at 44.7%. Operating expenses decreased to $502.6 million, leading to a reduced operating profit of $61.2 million and a drop in diluted EPS compared to the previous year.
As the company navigates fiscal year 2024, it anticipates revenues from ongoing operations will remain between $1.730 billion and $1.745 billion, down approximately 12.4% from the previous year. A gross margin of 44.5% is expected, with operating margins projected to be around 5.8%. The projected diluted EPS range will be between $0.56 and $0.66, reflecting adjustments from prior forecasts. Inventory levels are set to continue their decline, supporting Wolverine’s commitment to improving efficiency and financial health as it moves forward.
