WWW - Earnings call transcript Q4 2020 | Wolverine World Wide, Inc.

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Operator

Greetings, and welcome to Wolverine Worldwide, Inc. Fourth Quarter Fiscal 2020 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr. Brett Parent, Vice President of Strategy and Investor Relations. ahead. go Please

sir. begin, You may

Brett Parent

Good morning, Year quarter full our welcome conference Call. to XXXX fourth and and

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

These statements securities exchange and the outlook reserves the other If inventory related changes. disclosures, call the recoveries, remind body forward-looking fiscal also which describing the projections, XXXX the tables and pandemic, predictions release. certain plans, you reconciled at call you and year you related cost adjusts, call conference copy today's would COVID-XX during I'd prefer release to include Malkin made to laws. comments and of U.S. have Company's directly, like made related foreign costs impact and news within to attached rate disclosures that severance, costs non-GAAP a were other of today's XXX-XXX-XXXX. expenses, net statements credit costs, Allison for press loss earnings including for of example, those to the release morning's as during under the for are This expectations, such Company's sent of regarding environmental please and

from in forward-looking turn risk identified filings the result, to number our to Company's Krueger. differ are in cause and important results I'd like a of described factors releases. we factors that that the materially could a the now must With actual being over there These press call are SEC As Blake said, that to in statements. you caution those

Blake Krueger

million, all $X.XX we share of fourth incredible joining and well. thanks entering quarter morning, expectations highest finished this operating morning, Good Brett. quarter. and safe and effort reported and QX, of everyone that change we per everyone, approximately our adjusted the $XXX Earlier exceeding year call an million, the hope is the us. of earnings for $XXX revenue flow I focused on of agility. cash Thanks, on In

During for which time, we cash drove future remained of record communities. helped financial We've and and near for growth. set take stage business, solid also the open our results flow care accelerated

product led product continuous capabilities, the at Specifically, digital we invested design marketing development powerful new our We content. Sperry and aimed in franchises DTC-first to and brands, and digital to flow by Merrell, reoriented by product in This related consumer biggest of all supported all stories. our while leadership, a model, market to digital marketing insights platforms operating for product sets go-to-market launch prioritizing around compelling Saucony, globally. XXXX, mindset innovation, our tools, their innovations digital bringing brands Wolverine and stage our marketing

the revenue e-commerce grew XX% up XXXX. QX, XX% full for Our year in

even more We talent an shifted our investments this far, to of QX so XXXX XX% accelerated And added area has digital. elevated over marketing towards leadership in growth. and in

dealt to key realize to and XXXX. global XXXX, with unprecedented in venture exists in for of the with barrage thanks enabling sizable challenges to that our up constant team continue to Saucony strategic market. our also ramping who We joint in a initiatives, this behind Company on focus China heartfelt A the invest opportunity a jump-start growth Merrell successfully

clear we categories retail sight have increase brands are demand partners. distribution our line a and well and positioned Our from channels, and in DTC of to trending business

call. expectations in priorities, the drivers growth XXXX later strategic share We will more about our and

to Wolverine our Michigan XX.X% The for and on revenue a provide and basis. Boston outlook and basis share constant quarter, XXXX, detail will Group's currency constant will was XX.X% Group's initiatives. on reported Stornant on growth the XXXX revenue our performance. our I'll QX our a XX.X% currency basis major additional a speak however, In a Wolverine Mike down financial First, some the results insight reported and down basis. fourth Then on down down was XX.X% on Brendan

quarter, Let starting major on shifts across digits with key me grew of product out Saucony. planned in all brand QX, Despite focus categories. product performance, several launch mid-single revenue Saucony growth the with

increases brand and In We this channel saucony.com points. XX%, XXX of the than about and throughout QX XXXX. by very deliver XX% to accelerate growth expect QX, continued grew expanded margin to more the over in and basis in momentum brand operating strong

some quarter. drive grew ingredient running JV running which product growth collection, key which contributing featured growth in innovative new also double-digit business, the the the heritage retro collection opened The category. helped top-tier brand to the the stores lifestyle QX XX Pacific by Asia road traction, represents fashion China by brand's accounts, led delivered Originals in success, also is Saucony's the in gain as with Spectacular began to Endorphin year-end.

hub markets Italy, its will leverage for U.S. on key Europe. Saucony and building strategic like and Looking across roll, to big design that's franchises, the the trend-right Peregrine to and start of Endorphin Ride Greater expand Kinvara, Originals along integration its geometry into series. in the the just positioning power elevated Saucony product first and will anticipate to year. with XXXX, that continue to advance a launch award-winning marketing products We and pinnacle of including expansions biggest fast will with run its year its new product the business, success Guide, Saucony. further technology. The China, for speed And brand franchises, half cushioning design Italian midsole plans in a the of many of

performance mid-single digits Revenue QX, we North of XX% in only up down of The expectations, XX%, down new significant Merrell growth QX over largely ahead merrell.com traffic despite QX, both focused brand the high in franchises across industry to cultivating and related low declines compelling on product stores growth in digits In mix Merrell delivered discussed nicely due to remains the and single-digit inventory consumers. the of America strong right-sizing lifestyle leading were thanks a category. which with pandemic. iconic along position Antora selling the collection Merrell's new with expectations, quarter. QX Merrell. new in with as over delivering top Moab our to of to over were X Cold the among exceeded last performance our meaningfully to double growth style. boots Moving well, and partners some international the contributed for weather XX%. Nova

XXth this brand story. marketing maximize to year XXXX, powerful a marks its and slate moment Turning product has with and will anniversary campaign the future global XX the Merrell's

Thermo brand Moc Rogue are Explore Jungle expected of fast to Moc bolster strength faster and flip-on its X, Light, sneakers. with Moab materials introductions behind the the with in and to Hydro beginning The growing new brand the that the easy on-off compelling The launch its Speed the the the Hut the QX. back-half to launch two styles several year significant new and off light the will hiking biggest category. the on in also new in on and with QX. Moab In franchise innovative and momentum Speed with the Moab in hikers trend athletic-style Jungle Moab We Moc expect award-winning franchises Moc Merrell to feel the Merrell the capitalize have colorways collection, more plans capped a winter Thermo strong one plans market. build introductions Merrell and lighter, further at patterns and launch number

full the in years. a points Turning U.S. an all-new in all than boat and helped that to now the Gold like Launching and Float shoot boot March, for the boat younger biggest wholesale has ranging Banks revenue accessible elasticity affordable The planned price and several saltwater consumer better the to sell of improvement QX, ability the the prior fashion, nearly with brand brand of deliver been authentic culture just and Collection of in are throughout QX. Sperry's a two genders, XXX John shoot to series, colors Sperry's Ice-cream. pop to be leveraging premium especially the women from icons and entertainment Sperry down fun with product Legend, XX% across late version and is possesses in the very Outer Boots over its price collection. margin for in Good categories revenue points the points price collaborations injected and including versus one way expansion it's expected hit Sperry, the was expected gross in with year significant to the to business capsule Product Netflix original strong, Float in Rebecca launches silhouette, channel demand. diversified offerings expansion unique mark Cup Humor the Minkoff, contributing sequential products quarters. mix new boots for basis

going I'm review quarter it financial more to I in on results and our to insights Brendan priorities full-year share Mike Before the growth XXXX, strategic Mike? additional detail. off some fourth and in to hand

Michael Stornant

you us. joining Thanks, Blake, all and of thanks for to

coming additional me XX% prior and Company's Let the quarter. Fourth to year our the revenue projected quarter of providing touch finish into full insight start results with than for $XXX compared on on higher nearly fourth was quarter more outlook performance, year, by XXXX. we then detail meaningfully the on million down briefly but the was

business e-commerce XX%. a key up remained Our driver, growth owned approximately

and business, XX% to a prior selling incremental the led to inventory and on over our and million significantly, DTC spring a offset Pacific prior XXX our for which from of Saucony North result in from Better to digital in in discrete EMEA, stronger of administrative the inventory higher distributors third-party down single-digit As impact quarter our region, our over launches impact product by basis of business, general were of and and Adjusted timing increased and product in XX% sales year. were was gross million about up carryover year closeouts expanding Latin the revenue mostly full points by mix reduced the to the from several expenses than Adjusted America adjustment price including collections expected, mix partially key due shift quarterly marketing. more Merrell. margin negative the gross included America million $XX by an some the range. all high investment negative revenue issues, mentioned XX.X% the e-commerce international of selling, of impacted lower $XXX.X $X.X FX. of Asia million included certain high $X above related DTC strongest margin of was the inventory, planned were lean were Saucony portfolio. carryover across growth

continues noncash related footwear evaluating impact to the the Sperry on name. $XXX the Company potential quarter, a casual of goods, During pandemic impairment consumer the retail These and were pressure trade The the market recorded impairment soft has in put million quarter. global during pronounced considerations key Sperry's many including customers. to a have the main on the

taken market measures the conditions liquidity for Adjusted lower affinity quarter. tax includes authenticity, strong prior loss bright. currency Our million the outlook adjusted margin basis, compared remains our year. the was for was on time. result at of was in the to XXXX. than basis constant the QX to to entering retail XXX brand expect and noncash QX up operating share expectations rate $X.XX, $X.XX will we partners diluted last Consumers heritage previously the alike uncertain year the a to in revenue, per proactive brand. of mix share of due values, more Sperry With effective our Sperry expectations better but discussed favorable quarter. up in XXXX a our to earnings X.X%, the response its $X.X for charge. $X.XX per growth a Net down geographic and a of share return interest double-digit reported adjusted expense points as impairment year-over-year of The XX.X% deep exceeded The due

to the certain with XX.X% we year, shift balance versus XXXX a inventory lean position, down me categories. particularly Let was entered last inventory Year-end sheet. and in

growth adjustments significant our global to the will and quarter continue first in made of improve chain for needed XXXX. supply However, has balance to the support

of expected. QX significantly year, hand growth. We at $XXX.X cash revolver Cash million finished year insight with incremental confidence the the year million backlog on Our activities total least capacity. and this more businesses, $XXX million was our of to than debt of of million invest of current than generated $X.X approximately liquidity strength in to from give position, $XX less in $XXX and operating valuable inventory and $XXX billion, million, last coupled global support us with DTC including

defined bank at continued leverage ratio times. very improve, ending to a Our X.X healthy

from full XX.X% COVID-related operating the year. $X.XX our Adjusted of The of down of summary X.X%, brief reflecting billion Full in decisively. a per provide I'll due to Now than XXXX, In XXXX share during adjusted $X.XX, Company and QX were and quickly results. the Company in impairment year year was to margin for global impact disruption only the down lower the on loss XX% the an revenue incurred business, year reported and was the revenue. specific of pandemic's face more reported per share X/X noncash despite prior earnings unprecedented year. taken $X.XX, the acted costs our

Our positioning operating our we nimble us our to growth. prioritize allowed for while delivered cash $XXX cash flow environment to liquidity business million future the year year, exceeding significantly and Ultimately, flow model prior expectations. adjust of brands for the and the most bullish and

our us through interruption, continue without consecutive to reaching XXX throughout XXXX, to dividends of to shareholders dividends. addition, balance to enabled healthy our capital sheet In returning quarters pay shareholders

will I'll next these second position at challenges, the with trends operate, believe expect impact of XXXX. our initiatives. resources now to in now we The XXXX for global strengthened half poised accelerated are improve in least Despite and business has invest for positive will changed that outlook for that growth year. to it global the continue in we and the recovery XXXX. way our pandemic macro turn business enviable We the in our an we in ample to XXXX in an

performance, Our categories, the athletic, and to momentum, way. brands Saucony in build continue and leading those particularly Merrell outdoor with work

growth the key of end demand XX% to high to revenue billion the Company priority for from year, Company, fiscal of very for range the Our currently a future. has is strong year, versus range. retail and the prior XX% global partners e-commerce accelerated foreseeable growth $X.XX strategic start our DTC The approaching business, expects in the XXXX $X.XX in XXXX, to billion revenue at the of this

at and be expense an costs in reflect XX% $X freight includes million. to growth margin a higher will XXXX. structure normalized Company's and incentive will The more in continue e-commerce to increased and least logistics increased significant pension gross our costs expect headwind despite the We and DTC cost be that compensation of

expect be XX.X% of in $X.XX earnings $X.XX and per are in range operating earnings $X.XX. Reported margin of to be share adjusted $X.XX. rate XX% diluted expected to And We adjusted of effective the per to the approximately are to share tax XX%. an to of diluted expected range

year. Before handing to it team their would thank for over like this to our I briefly Brendan, efforts past extraordinary

was growth grit every glad over proud of behind a to be us, of insight XXXX hand that, is something more us on Brendan? we year all for that are of. With to While determination to share get I'll our the and drivers. team member strategic it Brendan to

Brendan Hoffman

In my of day months Thanks, responded team confident have by of has they portfolio in the their year. and our tremendous making growth every to biggest and a front to are progress understanding more the growth and the Company, direct-to-consumer I we continue and good prioritizing challenging for Mike. six connecting are energized successfully on Consumers business as unique our and have with more our time our a my with cases, by have even great be in The opportunities appreciation in many brands focused digitally I gained a directly us. me of potential brands. and favorite spending largest accelerating meaningful and brands. focus global we e-commerce our more attention

product closely digital on our engaging Our storytelling. platforms with more richer and capitalizing brands this are with brand consumers on by

and We inform real-time we product are benefiting test interpret our from across consumer lines. data intelligence to as investment newness inventory

continue We digital runway significant ahead our see to businesses. in

our beginning content digital, mobile spring. focus investing our brands, digital apps experiences investments leadership, including majority user launch later Merrell of through to shifting conversion, our increase mobile optimizing are We this the developing with of for enhanced the on digital a and to in marketing

develop two approach of aggressive to in half testing nearly demand of our and to brands, revenue of destiny. brand product functional with expect authentic they in and on account our trend-right channels these digital and will Consumers brand accelerating, in its positions Merrell, us for is we this and partners, high-end brands continuous expansion coupled landscape, more are for us process, direct fashion with choosing the or international are Saucony and our and our our will opportunities with In believe scale of fortunate to third-party take prime this footwear big the implement running $XXX All growing sneaker XXXX fashion own Saucony comfort help I and are real of to particularly of The distribution and skills, advantage examples, as agile I'm XX% our million benefits, well of validation momentum basis. categories to anticipated of brands our achieve target the fast-growing revenue current in digital go-to-market X/X positioned expansion business, accelerate by are controlled well accounted control the largest our be improve Saucony's our XXXX. trends. planning and controlled a lifestyle poised is ultimately the for categories. a The revenue XXXX. Originals opportunity successful in do maximize of distributor roughly the boutiques. DTC owners we Coming excited global is in background, XXXX. about to from we Italian direct-to-consumer

hiking category. about the also the and we in XX% most Merrell contribute anchored distribution. mentioned, foothold e-commerce to largest it to retail Blake silhouettes is established fast a portfolio is year. its a the own gaining will growth lifestyle share an As with the dollar brand outdoors expanding in easy in exciting is Merrell's on-off has solid The the XXXX. the business in within anticipate we market, leads very and start and where QX, growing Saucony U.S. it expect grow

U.S. with expected continues XX% to boot work QX in portfolio lead expect in Wolverine Merrell to healthy our XXXX. stronger beyond. over and boot The category. market share captured in brand growth grow the XX% And very We work by QX, even approximately

We with and we expect as past on injected into will leading we product and the pleased DTC product the double-digit in new driven in excitement QX return the that pipeline and brand the growth along in offerings, XXXX launches to Blake are approximately and in new expect refreshed year. this the a with overall. Wolverine new new its XX% year. growth e-commerce. platform The stronger by collaborations many drive business result and brand product launched than in to ever, start Overall, QX, throughout referenced grow its year, growth Sperry technology has will which and we focused we strong with digital momentum earlier, is are

have demand, order XXXX. concluding Mike this the additional to Blake related will insight our and We as expect into outlined, macro some Blake? before now strong growth meaningful remarks. expectations share on our translate in environment to

Blake Krueger

Thanks, Brendan.

We are continues our related to outlook somewhat pandemic. to global though volatile optimistic assume a even the environment

to However, this and as see consumers we restrictions vaccines activities, are social has year. rolled believe strong in U.S. already eased, are will and increase begin return in consumer spending, we fairly to will a meaningful which the out been

to mid-single XXXX. and remain sales a first signs the strategies have our of seismic grow profitable growth U.S. in brands our to investing through saw digits drive ability in manage we and and the sell-through our proven brands nimble, period We witnessing are wholesale already behind positive change post-COVID. some where Regionally,

believe pent-up pressure see delays global the by We over wane consumer year. some partially the and continue in will the course partially supply by bottlenecks this but pandemic chain, in to demand, the caused of

we deliver time like talent, to a innovation win. recovery. opportunity in will year in environment, deliver be million directly our Despite a and connecting these believe expect who of skill $XX For to with QX and and QX. are XXXX excited to their revenue In We brands still are macro for a of QX, related expect growth online companies our to but in digital new ours logistic confident some invested we this about delays, closely factors, ability sets, this consumers. poised have strong mid-teens to in shift currently product are

and and fast to what in laying their Company year operator. recognize for the With navigating are a our and every and I'll like that, setting exceptional I met They future focus and pivotal a the team the foundation prove along investments the I'd the a our Company's be pandemic, to closing, call with believe to thank the by order Our as In the members Operator? for history. XXXX. in now book work supporting working, efforts up start to witnessed way. turn global will and challenge communities back determination, focus growth over strong

Operator

session. from question-and-answer this At Stifel. first Our time, of with line a the question Duffy we'll Jim [Operator be conducting Instructions] comes

may You question. your proceed with

Jim Duffy

morning, guys. work... Hello. Nice Good

Michael Stornant

morning. Good

Jim Duffy

well. I wanted Healthy your families are the a your changing question on and to doing the comps. Hey, composition Hope of ask business.

a of Merrell the only if have is XX% XXXX and the Guys, the course mix but total a active as to we're brands, see you XXXX you for XXXX business? do Saucony down So thinking definitive portfolio or the revenue brands. portfolio shift now largest, the work revenue so, work and the then to still where Merrell, the baseline relative Saucony of percent second-largest,

Michael Stornant

that, consumers now of that for recreational Right is for brands great would I Yeah, would, still. our of other We've brands would for right activity-based increase portfolio, comfy plans momentum going home, we pursuits anticipate for certainly and to now, continue the in athletic, continue the that some got those to the outdoors, running, other -- some group percentage behind at but the of XXXX. Jim.

Merrell, As look of Wolverine, double-digit versus for our we from ahead, digit all would example, and expect for Chaco, XXXX, Saucony, of even frankly XXXX increases to increases for -- we compared XXXX. brands,

Jim Duffy

well. well portfolio as I the believe And performed work during XXXX

I feel about you and said Blake, in, or Brendan If you, combined business. Saucony two-thirds? the half we the up add think are work you around as portfolio I Merrell

Michael Stornant

now. Right less. Yeah, that. under little a Just

Jim Duffy

Okay.

Michael Stornant

work and just total the had estimate. pretty a that's work -- Wolverine you good If not portfolio brand, to But the

Blake Krueger

open of that tailwind. pandemic of distribution retailers and certainly surprise was was a Yeah. a XXXX A us. of lot a -- a bit pleasant the The and key other of some little the fleet that remained a work in frankly farm throughout for channels work bit and

Jim Duffy

the wanted have of follow-on may. one just the of expectations. quarter? some recapture on if saw guidance, business second-half a this international that question rebound to ask In market pressure you embedded fourth I the international in the for I you then And some

Michael Stornant

is good have the those of plan some those We in year are levels and markets growth where well. closed are particular, markets very almost of the recovery in down business to quite headwinds in of approaching a for But yet. Asia-Pac to tail some America, this some Latin in our as There going in XXXX QX nice not business still see international we're international or XX%.

So, and I throughout quarter, think which see. performance a good Jim, balanced to each good is

say good recovery for So I weighted. the back-half necessarily year, would a not

Operator

comes Komp Our of line Jonathan next question from the Baird. with

Jonathan Komp

quarter. now your when I here look you want some the in channel inventory some in today? product relative state sit commentary as availability strong are a detail and Yes. sell-through, broader finished ask maybe But shifts to sounds XXXX, of just the to you Obviously, bit more about launches it first sense product delays a for you the that backlog and of see. like at, little about you there

Blake Krueger

I there's right certainly Yes. feel see maybe wish, would vaccine we the at at all as of pandemic tunnel smooth Jonathan, but going light fundamentally, mean, as the We the of us light about XXXX. of the now. isn't It's, end end rollout the tunnel. pretty optimistic

best we that years. probably XX visibility of have brands. a have the into in I've We resilient seen demand portfolio future And very

different of Our backlog right to extremely That's factors. now number is a due high. probably

of it we paying the on and now. again talent going these witnessed is behaviors stick. are outdoors, content XXXX to down going tailwind. in actions proactive of period, years they're took think or in continue, We into right us to XX and think trends and to digital invest whether we five and changes us running, I we do some double XX-month some behavior and all it's trends believe think in for user So whether a we consumer that XXXX, providing some compression it's dividends of are We think the these experience maybe but was

Brendan Hoffman

in e-comm of some that as I like inventory e-commerce we knowing level would inventory think, I to the be next holiday, question. our your on we million e-com I to we we in exciting in a will things organization for just $XXX didn't tremendously about as most that the Jonathan, perspective, business and of impressed place add the was knowing circle mean, an for map is franchises of the have QX me key From out one XXXX. that's And was with the performance

Blake Krueger

And little supply chain then any number the seeing maybe challenges you. specifics to industries, now. a across obviously, logistics that of on quantify we issues those soft just tried right more and for including, that some goods, consumer I'm of

sales, over course QX. do see we any of the into $XX do QX transportation For see, of from improve us, we don't congestion port really those the lost end but of expect year. we the of issues, steadily the ocean shift see maybe a million some beginning We inland freight, to issues

Jonathan Komp

getting in know a margin. gross even higher And G&A you're XXXX close I by like that's margin, looks the operating XXXX on XXXX assuming much versus separately, higher back production, levels, to then And with amount. dollar spend Great. it good

shifts And the helpful? be of any the using more that detail in gross highlight to that? upside brands, would driving are the just in maybe reinvest some if mix you margin can that the then you're there, So business

Blake Krueger

years, operating Jon, off over absolute X.X in between we've growth, the leverage Both Yes, margin seen the a to it's of last also benefit benefit DTC accretive our a correlation growth. leverage there's but the expansion, tremendous gross investments. e-commerce as with there, that frankly, getting in terms e-comm And nice invested of we're despite we've driving margin business, business. bigger especially

supply some about costs promising. headwinds before, aren't that of just some chain different mix. anticipating that's be related And could as to that in technology while. investment some And and and growth. really there opportunities. digital talked make in guidance we a biggest for the when to, place advertising capabilities, that the investing So referring incremental that support 'XX, we look platforms at you for to of our It our It's really and most the XXXX, freight-related baseline that, that also e-commerce you're our as includes we're planning content investments growth towards in that going are is

revenues to see So out the XXXX operating we're delivering driver operating and that. would a despite on and expand growth margin margin that I behind into able to of e-commerce continue in as lower that fact pivot XXXX be like given the in us

Brendan Hoffman

from Well, been to year have in business. wholesale this so perspective, clean that in I would even the we any like maybe inventories past discount had think haven't the you a

me, all that now such some a see, promotional noise without exciting clean activity. the comes base so on build it's for the And to normally into of through business have to any

Blake Krueger

the the cleanup business, in the seeing the international have international that get a the side we royalty until business in too. we going still on sort as achieve the of of is which expansion did one much 'XX is to business of back Some to outlook recovery of the levels. side we help there, normal But of you're to XXXX margin operating not reasons in

Operator

Our next with the line Markets. question KeyBanc Degulis of Capital Matthew comes from

Matthew Degulis

shifts react So Brendan, order talk company, overall calendar bit, you the the about in a but more Wolverine the you DTC touched on how becoming Company? the this ability in of of is a to much that can given mindset

Brendan Hoffman

mean, lens in got I hopefully, accelerating first think was product, I'm summed I continuous means continuous having up, something what started a before this had just shift you Matthew. direct-to-consumer just here, to this storytelling. I Blake Well, is just of and that and terms it

issues through parallel the on we're better working building supply that that as also mousetrap. of a kind the things, now right path macro Blake two mentioned in a better, environment, are doing chain So we're working

partners we're directly our international and right the At have our wholesale by only this there, already business will brand of the as Wholesale, by out we wholesale. our assets we constant will benefit the almost same time, our flow is the ability flow. now you to newness. partners is XX% as creating speed my e-commerce to the power to I remarks, I past So they that organization we as our this can think really of And year, from quicker market a shelf to channel. in And have and in to say, sell of consumer. model the referenced directly e-commerce, embracing see it's all of factor idea benefit stores done continuous the when

think lens through our will of e-commerce. we that channels, So but the all this lift of

Matthew Degulis

healthier you one driving overall industry? which is sales my on looking can But inventory likely. outside curious keep seat Got companies the overall it. I'm and health how discipline the and on if price talk then is are your From in, short-term thoughts high-quality a now, landscape. right for longer seems the full of Blake the it about industry next And Can most term? footwear intact this

Blake Krueger

Yes.

the our and changed. we lot into bringing freshness on inventory future now. good, fundamentally, I And the bit have obviously, you have are is a our in like than today industry of example. good brands a do last I would design. driven we customers and to lot as the insight companies right lean has for rewarded the past greater get the look And marketplace. year ahead March, wholesale think A future, innovation currently. I we realized think ourselves say, little by had for and that Even

consumer much. order think one so hitting our and need their future a our the consumer into -- I business. backlog in stores. it's is And freshness, reasons trends flow plan we're constant DTC of to of seeing that certainly, up right e-comm They own why

as XXXX. And product, powerful doubled always product, comes product, we it stories. back fundamentally, focused coupled to on marketing that So say, We with I in down.

in benefits now. right as is to position we starting we're those a and to capabilities, that inventory of the in otherwise. talent, invest And reap think the We whole pretty certainly, digital But industry a now. continue good

Operator

comes of Our Research. Mitch from the line next question with Pivotal Kummetz

Mitch Kummetz

correctly, happened shift context the or the those me more you. as of maybe things? if biggest shape shape the also of it, even comparison given you you would maybe just sounds would QX I million that the QX be, I you like QX. year? there guess, with bit so it see XXXX And plus don't from I But was just shift recall know the shape a million let anything not, particularly else QX top already Mike, but to to mean, to, $XX the kind supposed on could the in referred but to $XX think, $XX if in speak that of the I like QX, rest to you address line? of you increase I start of shifting a million of be maybe, little QX. out Can the on the

Michael Stornant

Yes.

the confident. next growth the strong help well be at the And here between outlook. percentage more there's very balance deliver trajectory a into have came into year QX the that HX. a QX should which even visibility, lot growth more. three see that and quarterly Obviously, some or against million year. Blake us Saucony bit for large total QX Blake we've QX the some we've our or total, really as is a with launches QX year-over-year, I me but gives international quarters was drive of our the solid as little us would There's is growth Not But drive the of HX that today in first out talked $XX performance pre-COVID of anyway, the half that conservatism to a where only not reasons. really But frame of of you revenue There two we in a in start mentioned delays will Let meaningful, XXXX. when I quarter, might biggest terms a mean, the QX that pre-COVID, in to of yes, QX put already kind helping of flow but say, most time business. of that we for talked for each good look as it's the issues it the and shift order visibility this And mostly out. shape kind his of to about. got backlog and in kind definitely the going of obvious shifts, a definitely were up we're of business in quarter quite a of about a comments,

and in that the but balanced in seeing, start the brands, we're the not just year. visibility, strong us in a will think not be confidence really back-weighted give to of business kind nicely QX, a the a this and of year momentum then I the So health the e-commerce off business

Mitchel Kummetz

e-com as channel sort e-comm of Got just then there XXXX, sales landed versus to growth can the is confirm balance of frame a way want a could of from then guess, And it percent perspective, for XXXX? profile I where it. operating say lastly, you margin you the then in And expect I business? And outpaced any but the of sounds that? e-com like you just

Michael Stornant

Absolutely.

quarter as XX%. for the full in normal for typically our little year. QX, mix that's a that over baseline, mean for XXXX was In a and year. in E-commerce was e-commerce it just over QX, about I yes. XX% of a biggest XX% So about revenue was the and

When achieve So -- -- we're coming to maybe yes, $XXX meaningful industry our closer e-commerce that, when think XXXX more be -- year, represent well. we of there. that e-commerce as overall business. talk you XXXX in to from outpace the XX%, XX% growth that's we averages XXXX e-commerce certainly acceleration and growth against and million a about And think achieve above to And double little business have mix have target going that's global over do real a we the significant levels. going this about we than to we

I So stores. in say should e-commerce

right to the the and business, we even direction. in expect continue is that would headed XXXX. acceleration taking in That beyond we're So hold definitely

invested What the On row of mentioned margin the to business in I the of repeating the of mix out leverage for e-commerce a that can margin that for very side, we is I business. the coming strong we say, We've Jonathan, last have kind don't two now. give years heavily. what gory details all

investments investments. spend look the coming dollar at nearly all XXXX, is increase the digital from and from you to As there XXXX SG&A of focus in

to as more leverage channel, it's say that business. accretive continue grow to we'll leverage. and we We continue that think the contributor to get get forward, we So I would going that an

Operator

question next Erinn the comes Sandler. Piper Our with Murphy of from Piper line Jaffray

Erinn Murphy

Piper now Sandler, but anyway. it's And

So a couple of questions for you.

about differences or I seeing Any between new you green you're to got shoots on Sperry, in -- versus customers kind got a existing a bit I a would we patterns XXXX think know customers? younger launch more of new you And as any then March? in I've if say, from First a customer? purchasing love little then for should new maybe share brand, follow-up. the that have about And

Blake Krueger

Sperry haven't in pretty genders our I idea, infused whether is mean, vulcanized Erinn, one We we never last going leadership Sperry, starting we in we to love unique a a obviously Sperry just probably on forward brand. have we XX-year-old pipeline we in new brands boot of of of in talking think with matter those to a year where unique boat know, as the biggest the and a product Yes. across play brand. who fruits it efforts, different the shifts the pretty any frankly. introduction the significant in the Sperry know, the their who base. that to and think -- to across a the one be -- seen it's future. be given shoe really you the the I'm I loves brand will Sperry as brand have category. development ages. regarded category, has a brand XX-year-old for we doesn't offerings or of appeal big look loves some top When Sperry we're across the ever talent you marketing, float leadership product side several see big of the and in introduction, but in product category category. years, biggest consumers Sperry is number permission consumers

on So right we're positive Sperry now.

We year. double-digit XXXX deliver expect QX, Sperry and the full in growth for to versus growth

Michael Stornant

beyond, fruition starting working that's match really for and I'm for that. Blake to four brought they're with that constant product And what mentioned starting beyond. Float develop and I to it starting you with referenced to the also really but Yeah. with next I'm the and starting storytelling a the quarters to then flow Blake -- and talent really come we on will in. with see they're the as excited, be mean QX

the bit little a an Just the constant maybe authentic bit more we've storytelling in -- scrappy than and a past. more done of way little in

future. Sperry's energized combination about product is the making with very us referenced So storytelling Blake think that I the of

Erinn Murphy

first think delays could be from late the seeing. all that Thank remedied? timeline they summer. be that I follow-up you. is way And then of just are and to And the the sorry just margin? a heard gross at the it a then And Thanks. congestion We've Great. you're that different on could into the you there will port margin? kind spring, how that you or if could product needing guess, be companies half I impact to first through some of it, the gross translating ports of then quarter to airfreight that avoid missed

Blake Krueger

a you that I into for freight plan gone our as we have built we've Yeah, air freighting also XXXX. cost of know, mean up, lot are air

been When and on a We have quarters. airfreight. lot comes you're judicious very other next you extremely airfreight it the of over predicted footwear demand strong now the airfreighting we to when hand, historically and several air, have

Mike avenues available talked using us, frankly, to this going we over for be a time. yet. ball -- I We that's boats I by think into congestion going and several strategies and going cadence crystal some built the when it's different the earlier. minimum fast is our get implemented going to to that but built using been several We've plans for tell exactly it's all think a We So of port had And while itself. think situation we've last could you and to ports better kind wish address to of about a into to relieve other months. around quarterly it's

Brendan Hoffman

I would Erinn. also add

that the brands Because let that and we're right have preferred, a opportunity that invest opportunity, what we space get by. need need this is never the a us of now as pass there the as not if shelf going it's demand the While to can soon opportunity we do is couple to year biggest we do them. where we share our with to to good we'll market obviously get

year, Company. that in had go couple of containers of At different containers damaged the events this two we're had water before, to been that with we the had trying but happened magnitude, our years We them conservative to be hard significant XX full and of into this a had had terms been vessels unusual quarter. either that QX. the where So lost two predict one number will outlook. We in in in we on or I've in that's never

demand And But So very reason way moving great event. in doing shift here team They're front that we QX to to line. from right unusual it, as is just is to we're goods our can costs this the a we of we're managing the a meet seeing of in fast now. dedicated part just job of keeping QX as these have.

Operator

Our next with question Group. Dana Telsey comes the from Advisory line of Telsey

Dana Telsey

Congratulations nice on progress. the

Blake Krueger

Dana. you, Thank

Dana Telsey

and you think it? wholesale on CapEx the return going are in you you the What are as about you flow then targeting the operating new for talked you mid-single at past first the XXXX, What mentioned quarter do for forward, looking what in business, growth you're how so the in brands. you foresee? far wholesale digital? in that there? are As CapEx about players see seeing And on given digits think in cash opportunities investments the that I you And

Brendan Hoffman

as of with for on wholesale, seeing wholesalers. We're with Dana, digital on bullish the new, reasons well I certainly our mean, in wholesale resonate product our said. we're I these, some the

there's penetration business, increased So digital their big most e-com with within certainly an where of titans. the

maybe said what So I'm you're new clarify not we accounts. referencing, sure wholesale have if, you to

Dana Telsey

operations new customer that newer digital also. it's younger I new into you're capture, thought or you the interacting you're retailers whether that seeing? were accounts wholesale customer going in even to there with a with going with Are

Brendan Hoffman

but we well services think Well, our footwear fuel new as shelf that. we hasn't and but the in that well. business opportunities our the certainly that get the mean be are And might want and models some I of I I think looking presence that competition subscription advantage dived to digital out 'XX all on the their of of of they're I shift transitioning other locations where poised brands on trying of workspace. we're we space sure from brands, of forefront deeply outdoor into, some as there, taking they're with mean, Wolverine that expressed making seeing to think their and how some product the to like in expressed and distribution like athletic, we're we're to have we our the at some wholesale and have partners big some the advantage shifting of how some heavily take mix, digital into other

Michael Stornant

the and of sporting And penetration And our at really wholesale much today I pure-play become percentage We retail and healthier a That's our that's and our obviously, penetration. the our with we're think overall. shifting look goods total channels I bigger leveraging digital also and outdoor portfolio business distribution in think channels. retailers critical.

environment, base your e-commerce, go here with of retail is ahead think the before We curve always I the set because CapEx then in place and just and able of So accounts customers, think emphasize over And we are in a necessarily the up. when the out channels of digital to we've about new environment. ones of I prioritize but we've can. to to best put we in We, a were tools real kind platforms that had particular, business acceleration on the question the years. been the this on good the performing partners partner broad began. this the invested those one. It's, investment and get we've in we best think require side us we don't that But this

resources. our creation other business it e-com supports specifically our total. global But some in pretty a we look to entire small at It's our platform, when people. in everything certainly CapEx percentage it's demand there the else. through the So e-com, performance and There too, It's as Dana, relates the and in it's marketing. is and investment chain distribution supply which of optimizing

Operator

Laurent BMP from with line Exane Vasilescu next of comes question Our the Paribas.

Laurent Vasilescu

I follow-up on Mike, to question. wanted Mitch's

for I revenues? just Saucony growth terms will XQ about FY China you extra to out from growth? about And the that think partnership up called would parse XQ, how be of shift how first think quarter. the An much it out we underlying into in can was XX% contribute do the then 'XX

Michael Stornant

from And Saucony global scale and growth really coming for the But for that for double-digit up strong moved accelerate performance the we through to continued first and easier that's to consistent the business Saucony Saucony that's, the I the growth in as a share. course there the QX we even frankly, on talked to for they're think that But year into on pipeline very can quarter. flow comparisons. also to was we Saucony. that, the product that of that growth obviously into benefiting Yes, keep go momentum Again, is split of going. new market the the e-com QX in channel them, going tremendous be QX those talk launches QX. would strong of going there excluding about against XX% out full

Blake Krueger

a would point. Yes. entire there the double-digit got I at increase year we to very we've respect a for China, anticipate China. say strong this Saucony With for foothold in

we Saucony the by expectations probably not for with brand, there Our The the bump joint significant at the with point but end road pandemic. the stores venture are meeting the this opened. is even Saucony XX dollars in did caused year overly

our So kind a program China's China. in opportunity great in it's, best great But product, we front a in view apparel presentation us. China, frankly, of of

Laurent Vasilescu

about XQ? follow-up, where, in of very you that? you on adjustment $X.XX how costs margins? terms did us the in guide? of the EPS think on can question. sorry, question we Very FY million $X.X first then gross But if 'XX clear. missed would about just That XQ. you as a the then had think be here. Erinn's color on How And give we freight Anything that housekeeping Mike, this quarter And driving air guide, think just I a do about I color in for What's give helpful. if

Brendan Hoffman

Yes.

about On we kind on the litigation are with at for XX%, and then of at other that some costs have years that to rest end or almost managing say, all of expect. year. what to QX. give an guidance the freight the predominantly where operating we the in And ongoing as be there two to on on manage issue. continue have, still variables the, to the latter be is component that's for didn't margin And point, of the year report the mention, we I look sits we'll to and environmental that's But going we'll able things, rates street would that currently, margin we ongoing for the to us the through did on legacy related the we we line as quarter. would there's the next

Operator

Our Alec Riley next question B. the from of comes with Legg line FBR.

Alec Legg

the Merrell on website. a Just question

online? that? new Or And mentioned either You Any mostly from a consumers XX% brand? that on additional to mix might through Was growth new in that consumers. there large growth online of details details large consumers brands to then on moving have were and acquiring other customers? the seen new any meaningful in-store

Brendan Hoffman

it And was online are so full stores migrating I remember, outlets. stores our price online them really was business. don't because own from think much this our all

maybe site. customers closed, So being was went stores It I probably bought with a to was new think our of have lot customers. elsewhere it and that right Merrell

be us. this my to exciting was we're as that mentioned mobile on with in later for And app now going I Merrell launching spring. So remarks, a

within And shop sure continue are they we however and us to that brands learning can to going we're want portfolio they the are other as our well. us. have shop So that from investment making certainly, there

information, and in our -- yes, and all brands customers the of all that Merrell but new they're for give and it's of we exciting -- not it's So we're terms KPIs how and Saucony going online. migrating, really see to to trending so

Blake Krueger

recipient Park hiking flood a some looking Yes. in of in outdoors, right? National a the that And Merrell I uptick tremendous new camping or consumers Whether of increased trail. the to backyard on also I consumers or There interest. outdoors. the to related was it's And just the of the think is this the think was at visiting

Operator

Brett Ladies have to reached would closing for I call we over end back of like remarks. Parent to question-and-answer turn and gentlemen, this session. today's Mr. the

Brett Parent

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

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

Operator

This concludes today's conference.

your your at this You the enjoy participation, time. and for rest day. may lines of Thank disconnect your you

Wolverine World Wide (WWW) 27 Feb 212020 Q4 Earnings call transcript