WWW - Earnings call transcript Q2 2020 | Wolverine World Wide, Inc.

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Operator

Greetings and welcome to Wolverine World Wide Inc Second Quarter Fiscal 2020 Results Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I will now turn the conference over to Brett Parent, Vice President of Strategy and Investor Relations. you. Thank

begin. may You

Brett Parent

welcome second and call. XXXX to morning quarter our conference Good

Vice Financial on the Krueger, announced XXXX. and release can and Senior Blake today our and Mike news sites is corporate and Chairman, our On website the are at The Officer financial our results call second morning, Earlier wolverineworldwide.com. Officer. this Chief our for Executive Stornant, available viewed President we many Chief quarter be President; on

have a to included to made of of the call If Filandro reconciled sent prefer you earnings This non-GAAP comments copy news release disclosures body were the release and you Francesca release. call would These during today's and please attached directly, disclosures. the morning's tables at XXX-XXX-XXXX. press within

adjusted exchange operations COVID-XX also which cost today's conference changes. are foreign US and including for during Wolverine related Wide World During adjust expenses I'd impacts regarding forward-looking and the made remind its statements and we environmental credit costs like you predictions of securities and our under to projections pandemic call call, financial related and rate are that and laws. results, environmental other to re-organization loss cost providing recoveries, the

important to in that filings said, being turn factors a factors SEC are These Blake releases. prediction a to are like As that results Company's as number identified press over the and could caution we risk the Krueger. result, to or With must materially. I'd you differ of any in with projection, there our cause call that actual

Blake Krueger

performance is we approximately earnings exceeded on million second our financial entering hope Earlier virtually quarter us. morning, quarter revenue everyone every company's of and adjusted expectations significantly everyone morning safe Thanks reported Brett. Good metric. joining for and share The this I on well. call the $X.XX. and per of $XXX this thanks

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Mike Stornant

And On toughest business. solid I'm brands has start Their the and all focus like us helped on Thanks, our I the on of driven today. hard have to of start compared year comments the for on call echoing put team. to regarding XX.X% expectations their generated the This joining cash performance, the health down XX.X% briefly a of reinforce the current to prior times. performance in Revenue by this $XXX.X million providing quarter flow, and our basis. Blake. exceeding global down results then share the $XXX.X second our the Blake's the work of contributions. financial ground, an quarter. entering operating it constant million, details I On revenue by today's grateful would was to call, quarter on for company highest the currency you second update or business significantly trends. very of on company's company and And will for thanks us the

much of quarter, business stores accretive While were our at ecommerce physical for closed excelled, the margins. XX% of growing the year-over-year majority

at orders on In platforms to The shipped represent quarter. basis, payback in ecommerce the at million by the EMEA work. crucial potential categories about scale. total North a instead and of performance of end growth, $XX QX the drive of and a business quarter these like anticipated. and in that their in digital of the Our On and proved driven US from our consumer platforms thirds approximately investment product hiking, two multi-year delivered company total, of international benefited sales the performed regional previously the as ecommerce best relevant America and running a larger

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We continue area and this to last increased year. compared our marketing invest growing platform by XXX% in QX heavily more than in spend ecommerce to

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balance the in shift now me Let sheet.

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QX inventory styles prioritize innovative – and customer poised especially and improvement to our deliver are brands the Overall, bring improved and progressive flow [indiscernible] is through healthy. solid digital new we Our sufficient QX, consumer, during us supply future position half. in the operating we core expect as inventory helping And to to inventory channels. production has move the to second through cash

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flexibility term credit within structure, During senior amended QX, debt. incremental capital provide of $XXX our we the company's to facility and loan million enhanced borrowed

paid debt $X.X we of cash QX, We or these the in capacity. resulting where to of at quarter. liquidity million was notes of in balance the used to in capacity $XXX $XXX additional $XXX mature of million also Total XXXX. outstanding Together, and revolver were at reducing financing down QX actions overall, under $XXX credit in our longer borrowing from the $XXX senior approximately revolving term end sold the million recently that the proceeds borrowings prior including million facility, repay and billion, end revolver million

of covenants defined on below lower well our ratio the remain and requirements was its future. by current Based confident than at of our foreseeable bank we will the the end compliance required well X.X ratio company X.XX debt at full on leverage for financing the the agreement. leverage quarter, the end and QX are Our projections, times ratio in within times

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we'll we conditions this time, this a stabilize. As at providing not guidance revisit as are but result, issue detailed

in flow, the to we so As far and maximize growth trends we third manage cash continue the to experiencing are following business quarter. the

smaller Saucony, our work our are brands. other better Wolverine, lifestyle brands than need and based Merrell, brands performing performance Footwear Cat and Our including

Reorder is continue, but several from Saucony HX. to now the as Many momentum weeks. are the expect the trends as for states. have recently, several slowed become apparent wave to customers in accelerates shopping of in been especially pandemic environments. comfortable US second its being this with as experienced recovering react wholesale traffic open, consumers has traffic still the last in it physical positive consumers returning our Store stores to We for retail the

Our moderated remains is XX% reopened. few physical robust, the stores weeks, ecommerce growth to but in about have last as

continue quarter. with moderate current wholesale We the rates and balanced expect coping and more Margin continue to the Gross growth a balance world, of we market return to Around the managing variety partners normal to remains of stores third-party revenue should healthy, our reopen but as levels inventory are dynamics. mix. a

quarter as to current trends, expect QX. seen to and We our of there, global followed in QX the current continues down sequential Based more Latin expect XX%. reopening economy less revenue America expect in from of will than strength to with but better recovering we The third US, here the partially process, without own due not Asia some regions, volatility. coupled reorder by parts a continue we businesses improvement other on to to the lag EMEA have the be backlog revenue we perform Overall, trends, relative Pacific. the slowly. do than

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Our diversified effectively global risk. portfolio mitigates

model balance low headwinds while challenges. cost operating and enable weather nimble when The quickly fuel to near liquidity we us our sheet to investments. term fixed While structure future the with company faced and relatively has the pivot

confident focused, for experienced is team to company. am even emerge ability morning. in and Thanks our stronger this an I time Our determined, and your

back turn We the will the now operator. to call

Operator

from with you. is Our first proceed. Duffy Instructions] Please Thank [Operator Stifel. Jim question

Jim Duffy

Good execution. morning, guys, terrific

Blake Krueger

Good Thanks morning. Jim

Jim Duffy

use digital number you gratified by to made the of return the guys talking of industries maybe business? go-to-market opportunity and Can in I'm with investments guys digital of you're kind want this about sure in that of by start capabilities. your across seeing influence structural increased the of of forward. seeing operational business a digital I you influence strategies. kind in you've the P&L shape does We're on are changes your capabilities margin the use some How pandemic of the the for strategies? you increased look policies

Blake Krueger

a to going Jim. think be obviously Well, to going – we benefit I think it's it's

On a the shift side, to shorten bit marketing. be here the there'll but overall to marketing is chain, from But hands. ultimate of consumers development, making traditional goal just a shoes, marketing obviously, here hitting supply the the for not digital the

have risk of to to in challenging You that just closer this do simply and be consumer you the the order especially take in to need like times to equation. out

eventually digital the supply pockets being savings equation it's the We that's of come that to as of in and be fairly traditional the and by product to So development, the much how sourcing when digital exactly you broad regard. hard to see predict China, operational we will a comes But forth we going enhancer savings, consider fall in out to the centers. and shortening chain. of SG&A It's capabilities. it by that kind discipline replaced to wayside other going substantial, Asia be and manufacturing especially believe believe and when back and

Mike Stornant

our and Yeah virtual out in cost, cost to we be making drive we inventory the consumer, and manage the timeframe. accelerated helps We we're down make we we're those his the digital the product us to had there. using, fact it lot related Blake take exposure a with think that But helps decisions comments, that closer when can us just in solution inventory. about the test an already the also mentioned but of those can solution, really

immediate from So we're benefits seeing that some really approach.

Jim Duffy

quarter, promotional? And during those some related depressed may gross the that think leverageable quarter, to the the out margin leverage was the at have in rates, speak for jumped can margins helped curious and of XXX it basis that guys I owned business. add to I'm costs. really number ecommerce customer business which How of points leverage which Great were about you you mentioned acquisition expenses? how in much me, operating one ecommerce

Mike Stornant

standpoint sort promotional line from think big – are on new of actually wasn't It we to couple up say, normal. us. cadence But Gross some I for the seasonal were And margins a move us was than needed at products the that margin higher helped a with the in I introducing were that goods. of a the promotional mean, nicely. along brands would quarter, couple gross better we some which drivers were with I overall were fact there year-over-year that margin. of

the So positive. service that the a e-com business, platform that quarter. customer there. benefits And definitely warehouse right, e-com really have organic terms money more support very And well and that e-com The a structure things, support very results some the but marketing sites services way some our the depressed and leverage allowed the certain both that a portfolio. in did entire overall, a our we was infrastructure effectively from were lot much in is right; but our couple demand, center our in of able interest degree, get work variable excellence costs other you leverage helped advertising supports are to cost our and drivers really the then to we of to we we with on run the

drive organic the with So was site. our very some role as on healthy spend organic – that search to saw because interest traffic we in higher

Jim Duffy

forward following to the it up at after I Great, that. I'll call. look leave

Mike Stornant

Jim. Thanks

Operator

Wedbush. Our proceed. Svezia from with next Please is question Chris

Chris Svezia

question. everyone. Hopefully morning, for my well. you're taking Thanks Good

– strong for that first to back just further on backlog there the given expect the to color year a the half return backlog? want response the seeing – to that growth double in just said I would Just to moment, just you're on e-com you to increase just Saucony product, what the in based what you of go go to on about

Blake Krueger

that that somewhat the new thought by Yeah, be introductions. our affected of timing goal, would obviously product

of QX this You into that new are or can QX. – product a introductions could there point fall at number

in product air. momentum innovative by up So it's But the in a little buzz has now a tremendous bit fundamentally and marketplace. right the lot of driven Saucony

to in a certainly QX expect would Saucony. we for So return growth

Chris Svezia

you, – that just doesn't you're on XX% moving this your direction and to some for which concerns imply somewhere that markets, for terms seeing. of just Is you that about right made an rate any because certain that of than sequentially Mike just the somewhat be what or – international really additional thought. for thought seems guess preliminary I is in for other all to of improvement hotel, spikes be a in nature, much COVID just how of some unfolds based such gave on quickly how just markets come exit in And you. just that QX about thank too more exact as slowly process less revenue in Okay, seems in you back, comments sale America caution the QX, the

Mike Stornant

But month time at our the June uncertainty to the June. for thing think I end some Chris. be here things we sure, a QX. were cautious with at The rest an some the saw day came at not really it outlook have we over the continue of June of point For point was of mean, able the wise improvement. us of at stronger. to business sort beginning in control. little out to in do, the we proved – how we I well, managed served out the July improvement still and that that We

the prominent in at-once our wholesale the it's in growth shift, the say demand overall trends the though obviously, good there. and most and would the I in positive have probably to more weeks several business but order there's e-com trends now, from traditional channels, move last So been been

of kind a obviously, of the part quarter. bit maybe settle back expect recovery a to been there. in that there's little surge we'd down the And So

Chris Svezia

full curious, just me high a price because quickly, XXX does gross Understood, normal and have in in as on basis be margin, I'm still not, just is characterize or turn improvement what game in the you mix. or it of would is or strength for curious, QX just apart real can just don't you're of how final negative you terms call much to it product thing maybe normalized promoted? just I'm points selling less break just of

Mike Stornant

quarter there second Yeah, a that's I But – us of was that's just to demand think shift mix. the there suppressed we're out into mean, normal about normal was to of I really it QX. a talk was and for in close kind good question. some Because going

thirds margins negative look from quality that, and on really points, a gross little of sort thirds timing when impact basis e-com just that have of you shift quarter. two mix a that'll versus just at a just mix. we closeout was the XXX for But It's bit that gains more there. two first So the of in than had QX,

of the QX. back a and – we're in for think see XX% of to the QX, third XX% going to I come get the portion So range that QX into kind down not for quarter back big second

Chris Svezia

Understood.

the Okay. much, all you best. Thank very

Blake Krueger

Thanks

Operator

proceed. Komp next Please Our with Baird. Jonathan from question is

Jonathan Komp

hi, what the that just on of in just a transit. the I the you're start in color I little recent seeing the maybe couple a there the brand wanted given bit appreciate there, just to Yeah, dig lagged more them second on quarter, casual there.

color If you're you seeing. could give more what

Blake Krueger

aware its think several one, think consumer right of Jonathan, now. I is I trends everybody things

So there's that and for for trends a are of tailwinds many are us brands few our right headwinds. some distinct consumer now there's that

was store So our QX. more base brands, portfolio, bigger Boston in – have that a department than example, couple business a the US rest very for in I of of obviously, not would robust their the

next think in here going that expense at So just there's on We traditional fashion the side the at over six seeing that's its probably probably that's to general dress, home of certainly or casual an having months. a nine we're continue work, outdoor a here couple course and runs And the and comfort, been impact. casual the brands. pandemic focus on run, consumer shoes of until our

Jonathan Komp

the those more driven maybe the brands. just the whole performance I brands of you – some than XX% And positive expect in just to clarify, down given assume – had the call outs other

– gain trying Just

Blake Krueger

Yeah, tailwinds. the be of more other from range. down are correct. would benefiting that our expect brands Certainly those that's that I down than brands some to Yeah, that's correct. in

Jonathan Komp

picture, to with to prior - that profitability? need think sales just of and bigger the levels cost maybe timeline? when – here, picture of thoughts the you that ball. great And you're about be the discussion, industry to of just any of discipline, maybe the some how a Okay, broader going crystal related achieve here? cuts on Or kind to making to Maybe fill you you is look to lost sales to some permanent but think capture out level get you're big to this are your same trying planning with do the get do back you think

Blake Krueger

of will the structural permanent. I think changes be some

around of there's think time changes been of nine significant enabled. especially consumer the and Maybe five that's that consumer to technology very behavior down I behavior. over or changes short months, a the use compressed in years six

So and and pace. That and that's our to with frankly, adjust some be in to operate shed within and by labor or we it state. a permanent. think be United going varies businesses a pandemic, States, broader be be agile respect And business requires with to really region-by-region even picture all and the state-by-state fast the particular

pandemic with crystal on universal volatility going advising to be vaccine. a have I I've curb. or a some I there's on fits starts. experts nine and on six approaches months, committee, believe think other to governor a But going ball until the continue of there's address to state's lower don't our we a the CEOs it's So been though, and health be little to bit and

quick has category there's whether us in the has to tremendous been outdoor things the the that those in consumers are for One the been going consumers sport to to remain new to example, spike – have it's running. consumer a running the or trends, surprising of Even going majority new of the with of sport. the been shown subsequent surveys and influx, that to they're vast

the well pandemic. continuing probably this trends those of particular some see on of past, lifeline we So

Jonathan Komp

color. helpful that's Okay,

Blake Krueger

Thank you. Thanks.

Operator

question with proceed. Please next Telsey from Dana Telsey is Advisory Group. Our

Dana Telsey

good Hi, on and morning progress. the congratulations

Mike Stornant

Dana. you, Thank

Dana Telsey

and As potential accelerate, think what operating accretive? as how you've you channels? see it gross margin are you. channel the seen And for other digital do opportunities Thank the being margin the do ecommerce versus you

Blake Krueger

we're going Yeah, us not has even digital. always accretive it's e-com think one our overall continuing different know gross the for our been going ecommerce I be increased I think have to anyway. certain do would line be know investments that to We it's to business but is companies, to for case. bottom We and our results. be to going in

and account over that are seen as shift gross know continue. So ecommerce the investments well. would run And our we this margin line have an a or a may model beneficial to – more impact long into to a it benefiting year certainly frankly, that impact ago have we bottom DTC more we taking that's again two increased see on going than

Mike Stornant

enhance to demand. look this you some And quarter And and is talked the to the really had Yeah. in levels XXX margin quarter at things results that the that change by Dana, ability chase points to about tremendous. you have second operating do respond things the to at basis – all to just we middle pretty and of was earlier scale, at we the these some

well our for bodes to So I it think ability you're about. leverage as inquiring

Dana Telsey

by you. showed Thank to the demand? about there about as too. season? move What think which through improvement holiday inventory seeing if How you then you inventory, also nice do terms out brand think of in you And you are

Mike Stornant

Sure.

Blake Krueger

consumer right some as in few certainly enough certain trends when have Sperry, demand inventory. got We're a brands mean now. in right believe behind brands. couple have as a Endorphin are inventory We something seeing hot QX brands for that – We've for that chasing you spikes now, of some you I are Saucony is never white obviously,

at pretty new the did product for the business, chain inventory keeping the some would though, probably of – we shift and and boot off this two Sperry operational tremendous orders to job here future some product with probably domestically once hats chasing see going QX. least team for think or I supply we're those So least. fashion from efforts quarter keeping at boot the for of well. in a the for in a more obviously, as to for sure, company team Saucony all our continued are at Overall to

like in those we right right really our and over really of so retailers inventory puts flux retailers just now. manage of been retailers them. to communicate state we it a a have those business core So with for us the have burden remain those with can Many little more on

Dana Telsey

forward the Look continued you. Thank to progress. seeing

Blake Krueger

Thanks.

Mike Stornant

Dana. Thanks,

Operator

from question Please is with next KeyBanc. Our Matthew proceed. DeGulis

Matthew DeGulis

questions. our taking for Thanks morning. Good

e-com and pretty up wholesale down, that's almost XXX% a So with delta. big

you'll shift So a of moving bigger And what permanent if forward. is a your business company thoughts I'm wondering and this a predictability to your DTC ordering more on and much be does perspective? on inventory it this

Blake Krueger

shift. this see permanent or as a be consumer accelerating to read be example. not some US short-term But for overall predictions will market, up as going It that we it's year be QX. the the a in more XX% think I've in may that as shift, I dramatic online permanent shift.

of to Certainly, see we company more digital retreating very consumer of one capabilities. and powered the look to So forward a reasons here. much decisions in don't predictions need us We focus when have inventory. digital the frankly, it best from of AI that's technology, investing so the the And comes analytics, DTC use the shift we're that make in going as to is why help online. to we digital

least So our at both go in for business. of best – hand those they hand really

Matthew DeGulis

goods, us wondering online wholesale you you're the others. I'm the color can about half sporting the you could on family, how of and give channel, year thinking back break if type any the Thanks. store and if down that And in only, by like

Blake Krueger

some QX, We've are comments something in open but the my United the or States, I'll throughout we know domestic for stores up right second here way. example, states a to second actually experiencing are market Yeah. restrict seen a now wave approaching that now

Farm in the the some fairly We virus. little much surprising had store businesses states. markets we with probably in channel, bit those Fleet's QX, remained overall trends some country. open respect A of those throughout the continue will we the seen think that reverse in the have And rural and to traffic decrease of central as until

to QX. in performance boot relatively strong contributed that work think I our

remain the see to more will it's state little cases, mixed depending a on case. continue bit We some city. We perform continue there, to and in the based retailers and of goods the think channel a open Mall bag the well. sporting

concern fear of So we a environments. has still know level the or crowded about consumer going into

exists younger that but know from parties, look millennial when some the right know you would at beaches news the generally of for we You the now. that consumers and

environments channel So think family here continue bit those a is challenged mixed to as a the I well. little we for be a think And bit while. likewise, will

areas and and and states well. Some some so areas well then open doing fairly not

on more focus as life we and I we consumer tied here online going safe all So vaccine we're see and The headway their continuing think some and channels be going to that improvement big spike short-term the a across to forward. But roll gradual see is to think to real longer make and to they're we convenient. front. technology term using

Mike Stornant

they And digital Matt, quarter. pure the our part our two thing, part of of become QX. revenue And continue well a channel and this one business contributors play thirds overall bigger bigger the US through right, more wholesale as us in of traditional our were online strong deliver to customers, and and second in mix very the do in helped that's environment

Matthew DeGulis

Helpful.

Operator

So our Murphy next Erinn from proceed. is - question Please Sandler. Piper

Erinn Murphy

two me. questions I morning. Great, thanks. Good for guess

just particular to see you First, just Keds Sperry a impacting on in then to the and speak the you clarification could how uncertainty starts that season, school around Saucony. and have broader and back the just I of in school portfolio

Blake Krueger

approach do of and volatility. this the children there. universities, lot to – with anticipate back is of concern the, a patchwork kind to a openings not lot any families I unfortunately of mean, universal kids causing approach younger We going and of even fall the school

not really as overall material school you company event. know, a is selling to our to back As Erinn,

our more on business, Group, younger even Keds is children. that Keds focused Our

have semester we technology first slash bit parents it's first to to of don't to We see couple a on it's months. spending format their it's going of school are standpoint, impact, schools going from we think as So in see virtual back much or season. school little environment. a on of more a desk focused least a volatile think home, work be create but whether parent's a an We the to at many consumer only a for investing or

to at apparel the bit come I consumer of is think traditional a in footwear. especially going and of cost soft sector goods, little that in some the

are it's So offices Boston, daycare challenging now. offices In In for environment. a open. open onsite technically different not Michigan, it's every And not state. but our is open, are our our

guidelines have is still there, pretty We daycare but our some onsite open. restrictive here

So there's for kids to certainly going parents be a of fall. and this challenges number

Erinn Murphy

laughing, about growth believe Okay, on you Saucony. and you the the up just but half that this then for earlier up did brand? Mike, you're that you. rates maybe Italian Thank taken second speaking distributor, your impact on and follow were how my I is

Mike Stornant

nice the mean, addition of distributor. benefit we definitely I the year Yeah, Italy from a that last saw equator as

So numbers really anniversaring QX. some in yeah, there nice we're

third story mentioned, the business The As on of we the so that quarter we're still that to year against momentum that to it's a a order out seeing we're think the in we book, the the the ago. Blake category, good that copying up trends even addition there. growth based in return expect called that Saucony because you position that strengthens Saucony

Erinn Murphy

both. Great, thank you

Operator

is Our next question Susan from B. proceed. FBR. Anderson Please Riley with

Alec Legg

is Alec our This Thanks on taking for Susan. morning. question. Good for Legg

on wholesale up follow orders. quick a Just

do were year? million few And XXX receipt that seen or last this retailers anticipate opening started I up, mentioned wholesale they inventory you on weeks. million have positively mentioned chasing started you as reduction to any receipts about inventory last partners trending by XXX But less year. than remember quarter You categories? that have the this categories have reducing be it you

Mike Stornant

at really obviously, took able customers back from time, more replay confidence, then, back of more based go certainty, gained since Well, to we April be our on those the and And in clarity back cancellations. March, cancellations timeframe. uncertainty that more to some

as spring outlook do to to think the were we inventory. have deliveries over December in we January the million next up mentioned some surge bring and pick we in demand for the – if to by overall, we merchandise still time to needed spring our of that. some XX to days and more have and end inventory year down And is the positive. $XX I over our still expect still be year-over-year So I ability for very But

QX season have that – brands for So and have of get little pushed Sperry's very other would are both did that and – our like brands, good think – bit, say business QX. many of year have but It's around our position, inventory good brands into I we mentioned I are than business Blake that certainly in sells we're think our strong, for some very core a less inventories boot positions product that, we a our inventory. that our round I

So the unexpected far quarter, at fulfill in level. to we've been very the able high demand a

confident in inventory So the we're trends.

Alec Legg

you. Thank Perfect.

Operator

Kummetz Mitch Pivotal Research. with Our question next proceed. from is Please

Mitch Kummetz

thanks I drill to Mike, Yes, your bit. my to want just down taking on a – I wanted outlook questions. for little

and First margins. on then follow on a got up I sales

mentioned of and that QX sales, down down be is around expect you you made was than So sort July also that back of better maybe was that the XX% My XX%. envelope than calculation comment less to you June. the June them

of down July in saw what So I'm you was sort or? kind curious to teens of as

Mike Stornant

demand business stores much But specific a just see was the started down we wholesale June higher were saw in and after in trends that. improvement, side as again, reorder the more and but month, – was the the quote of or I we by to July were would just especially opening I as won't July, more say open. progressive come stores

good the occur trends the gate talking So quarter. overall, good trends same than I month we're confidence what bit in in of of were of the consistent better slightly the little overall about – trends In ballpark same for us we're gives a for and line, not full but think July kind than better the out July. the as and that that, the because some saw in quarter, we for saw look providing the if

Mitch Kummetz

of the just there is quarter? or it, so you're seeing that that the cautious suggests what the over that Got kind of something – – the Again, balance deterioration explains expected is deterioration being

Mike Stornant

in will sell we certain again, dose just No, of Mitch when also the – on I that just I good – quarter. months. We there's for what it think just and weeks of far at last caution timing this we're the – point, where last of so about phasing know significant fairly product think new here hold we we the happens relates the or And in what deterioration, and know are in quarter based the the there feel a just the not don't this in few to uncertainty, but don't there's a there's months six outlook there's sure. all quarter as we

Mitch Kummetz

better in made on the back to cost understand million Got that QX. it you in that just that margins, trying on I come and comment SG&A then XX think

So SG&A from are saying standpoint basically be higher QX a to other there or like are that QX you consider than million dollar that XX should there? factors

Mike Stornant

the warehouse about of in the like the that's costs commissioned variable marketing coming way much that, quarter is back right, to yeah, we revenue about. related mean, not and new but wholesale fixed cost customer brands. and sales with demands way that's the it. I of versus the in, business right variable obviously, about teams as think service It's essentially No, in QX. million to serge spend the costs this all QX But things up think with XX that wholesale infrastructure, our our part to of and more though,

Mitch Kummetz

success. Got it. and continued Thanks

Mike Stornant

Mitch. Thanks,

Blake Krueger

Thanks.

Operator

And our from Vasilescu BNP Laurent final Please is Paribas. Exane with comment proceed.

Laurent Vasilescu

Thanks be wanted if right, think heard but XQ? to it Mike, I sure taking morning. question. projecting improvement I – follow you on I XQ are my for I'm up through not sequential Good of to called maybe into on XQ, XQ. million you XX would any from pull helpful? revenues you XQ color forward very forward to from that about pull out just some Are XQ anticipating

Mike Stornant

don't shift. there from Europe, that of we nice in case this necessarily customer any specifically into that at end to any QX tend outlook QX. business timing of some we point, point, tends see where the in to view European quarter, And QX But International strength we have it opportunities have is was in this quarter. the us to some second the Sure. the to that the Business really And our that in at that particular demand not we pulled QX. to the strong of we contemplate for shift be in this significant – the be demands some of No, major have wouldn't at

Laurent Vasilescu

strategy, inventory. $X.X million Okay, you with as very helpful. forward you new morning, parsed in in And filing your this push your then I out DTC noticed store

year? open plan the Just is full do curious for many and to know how or you is XX still what your store – count to currently, stores it

Mike Stornant

rest planning the any open stores the of not to We're year. for additional

I wouldn't stores, and position coming a We've state-by-state whether count now. it's in quarter, of otherwise, aggregate think in store the between operating they're a our opening but the and or actually good mentioned, reasons as we Merrell, year. over stores into low stores plan be at what for lease the little levels the seeing And above Blake naturally. is multi-brand just pretty today, all XX% the Sperry third were the the to any XX in in but at environment stores right the plan we're couple XXs off had come stable their new for

but were normal, higher level much return that a at many performing conversions than ago not about in now. So being with XX% to right year they complete a plus cases

Laurent Vasilescu

as should Very a mix just think that downside anything following mentioned Chris's we on helpful as for the that gross know last XX% curious margins, we think range XX% I think you cost question, briefly a impact, might margin? is be and XQ. up FX on question about to I then should to understand about to an gross but

Mike Stornant

come on margin compared from really the open, for – wholesale are suppressed mix really weren't of we and that weren't the as More expect just open to the shift some to kind QX. gross and well to in there closeout demand and that just drive we stores QX some in common mentioned the QX back Not as I QX QX. retailers Laurent, it's will

Laurent Vasilescu

Very helpful color, thank you very much.

Mike Stornant

Laurent. Thanks

Operator

turn We have I would of the to question-and-answer end for comments. closing Brett reached the over conference to like the Parent session. back

Brett Parent

worldwide, joining today. On of thank us behalf Wolverine to for I'd you like

replay have a call you Thank September will be good at our available The day. is our website a As and XXXX. until conference replay reminder, wolverineworldwide.com. X, on available

Operator

today's concludes This you. Thank conference.

and your time this participation. disconnect for you at may thank You lines your

Wolverine World Wide (WWW) 6 Aug 202020 Q2 Earnings call transcript