WWW - Earnings call transcript Q4 2024 | Wolverine World Wide, Inc.

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Operator

Greetings, and welcome to the Wolverine World Wide Fourth Quarter Fiscal 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Alex Wiseman, and Vice President of Finance.

You may begin.

Alex Wiseman

to quarter welcome call. XXXX and morning, our fiscal fourth conference Good

corporate morning, press sites the Hufnagel, for in Miller, for on and This Chris today the available Chief release is fiscal can issued and Officer. On be website full are viewed guidance Officer; fourth President quarter call at year financial announcing on release our wolverineworldwide.com. Chief and and Executive our Financial year news we results Press a XXXX many Taryn XXXX.

release morning's page the earnings measures the financial the This or release our including non-GAAP made call to include and Investor GAAP of wolverineworldwide.com. website, to press comments financial in on our during attached non-GAAP ongoing references on These reconciled comparable today's business, tables were financial Relations within measures. most body measures, the

statements to expected forward-looking performance for company's such today's are those statements regarding that I'd the and conference securities made growth under also and plans, you XXXX, projections outlook describing company's laws. like call future predictions affect year the opportunities as the company's during remind U.S. expectations, to fiscal trends

materially could a are a that releases. the in that and result, our you results filings forward-looking in cause These described those there press actual factors we to factors of As are identified in number must differ statements. from risk caution important company's SEC

now I'll that, turn With to the over Hufnagel. call Chris

Taryn Miller

year all business the increases the end last to quarter us line model a to for more revenue X joining was was basis pivotal by XXXX, thanks morning, good to result on for morning's a It Saucony, inflected was quarter Alex. expanded year, Thanks, quarter compared prior earnings by global our The record. and X and Merrell, Wolverine when growth than the what to top measure, fitting everyone almost XXX margin a conclusion exceeded Wolverine of regions of that call. expectations. new Worldwide. this Gross Good posting our fourth achieving our changes, company a compared with points adjusted year. In any final

year We expectations the the pleased our finishing company ambitious Last financial of second delivered. XXXX. the update this plan completed Today, our successfully for the corresponding the position strengthened company and and inventory pandemic. balance stabilization an to report XXXX the of around provided level fiscal debt had shared and that our our cleanest our since since I'm we on turn quarter we've to team on sheet, lowest call, with

the and to growth the guided full profitability, improved also we share year. gross finish And last as year. last the record meaningfully achieving year per finally, margin company reflected nearly February, business' greater We delivering Xx earnings than the

trends, shareholders, in for delivering amazing to awesome our we new driving model, stories better our macro underpin building stronger and the of to solidifying capabilities with In our addition and on focused results long-term align transforming financial We our brands building products, to for developed made consumer Worldwide brand improved business. telling and good progress and the simplified portfolio future. Wolverine foundation we reshaped

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grow still it's sure our positioned and biggest this straight, perfectly be growing our company our While path won't early inflection meaningfully brands are chapter, in year. I'm the again.and to is

our additional on build we to detail in Miller, provide Financial the Chief momentum we've fourth to call performance insight quarter results outlook, some handing Taryn more share brand's plan XXXX the to our generated. like Before over to I'd our on fiscal Officer, how and

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trend-right to continues brand archive the with with lifestyle growth. On the the side, cultural time the and Minted leverage social collections to Paris, has dropped Starcow enjoying The continues Jae of Last into newfound is of led by meaningful York, Homework period these heat team very powerhouse job its translating various styles Greyson. brand and this Triumph deep collaborations New marketplace, authentic the Omni, Tips, the now discourse to to fuel thoughtfully line on ProGrid others, Ride up it done short and Millennium, Saucony of product and likes in remarkable the energy deliver a quarter, and ProGrid platforms. a

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performance the lines and unique culture, intersection the A special. bullish credibility macro tremendous on today, year brand's was trends at I on its into doing believe and its Leveraging running something authentic routes, ago, the lifestyle. of cusp I position the blurring is prospects deep performance to said between benefiting the running category very and, the of a product Saucony I leapfrog and

category, basis again In brand Moving it hiking health eighth resulting its of in quarter, done grew continued the the to during gross XXX Merrell. in gaining the share well, points Merrell running. nearly the simultaneously quarter U.S. its the up once to X% consecutive posted compared fourth on of time quarters, expansion In so the growth, in the as improve market while and business year-over-year. The trail of year. X took has margin to significant last share quarter, second prior

As lighter through material hiking, the modernizing X and versatile more in focused Speed Merrell on products the and leader like Agility Peak X. remains Moab faster,

with the last also to their brand This key with its the and brand themselves as product both QX, consumer begin several revenue to In athletic establish retailers and marketplace. partner year of performance important brand. in enabled for adding franchises the over floor in assortments fueling more the evolving key has collections perception to the the of reshape continue accounts.

the launched month, Further ISPO of disruptive SpeedARC franchise new BOA It return. float flex stabilizing uniquely SpeedARC comfortable for its including ] plate with exceptional pro an all winner. to Merrell award one platform, XXXX supercritical Invention and modernize New the [ brand's new energy a employs highly push advancing foam Best ride advanced its last and Surge Times materials a of and plus

point. in selling Later at in MATIS. nearly quarter, through collection, the follow has this SpeedARC brand the $XXX it expectations So the up this a far, introduction a price exceeded will quickly second style with our

X, demand younger [indiscernible] an franchises, the specialty Agility consumer steady side make doors innovation lifestyle and quadrupled actively traction key well, lifestyle of business is Moab double to X including as key modernize Merrell's strong to and its the on around grew continues counts Moab the QX. the of strategy nearly demonstrated in last U.S. Shipments real the a with quarter. the year revenue of with progress driven X in category, accounts Speed world. digits and driving and independents this gaining Merrell performance expansion have trail the Peak

outerwear, alignment top our the its Sweaty to of versus significantly but last brand its mid-layer over digits. improvement was gross business grew line improve Sweaty collection. leggings for continued Betty. margin our with softer in notably single The than strong sell-through basis the down with flat e-commerce strategy, was Nimbus Switching points expectations quarter, year. nearly profitability year-over-year brand the revenue to Betty's high was and XXX along most in with in Store

its campaign. Year Damn healthier place. a venerable and iteration we the Betty Wear launched plan foundation follow with weeks It The brand in which to strong campaign shortly entered the Sweaty team New of Shorts the ago, a new few Don't Sweat with the next a

revenue print brands with encouraging. in closing the for And quarter performance the brand. is Wolverine Wolverine The

marketplace. However, supply chain the on patterns, and our order trends footing remain overall inconsistent based timing in

bolstering on result, launches pushing into collections, return. focused is points are and starting including several price brand with premium its product as technology superior the new a on Rancher Vantage Pro XXXX, innovation the forward, new Going energy built [indiscernible] the and brand's more new which cushing and for in

broadening by to launch plans In apparel footwear capsule with also that superstar, later addition along Wolverine conference this to we're during programs brand's the a new few music trades Jordan just Davis product celebrate to collection will focused year, and including this a fall. and high donate school country Wolverine the weeks with improved custom trades offerings, his the Jordan in reach. Davis, on partnership

are we well firmest financial in years the its on positioned. XXXX, page to the brands believe company and As footing is our turn

to continuing sharpen Our marketing the in drive on and teams are forward. our focused dial business our product,

of the next is chapter focused everyone growth. heavy the the chapter new stabilization behind a on excited for for lift us, company, the With

to our through With Taryn like to that, and in walk results for now call detail fourth you to Taryn? outlook over hand I'd XXXX. quarter the

Alex Wiseman

welcome, Thank you, and everyone. Chris,

exceeding As our am XXXX, delivered share of initial all key across the we successfully that first turnaround financial metrics. expectations to pleased our reflect we phase on I strategic

have Our our brands optimize efforts improved our performance. enhance to portfolio, our and the revitalize operations

cash in In debt. reduction and addition, a our strategic in improved meaningful sheet resulting balance strengthened flow the actions have

for growth and As these forward, we sustainable value building creation to committed our remain long-term we shareholders. achievements . on to move ensure

inventory of of a represents model XX.X% billion Fiscal timing of liquidation, driven for business business year, prior ongoing a of by XXXX discrete end-of-life shift versus in and $X.XX primarily items quarter, XXXX Performance changes to our revenue an fourth decline related success XXXX recur the that distributor initiatives to in in inflection international throughout the did of XXXX. strengthened strategic not team. growth execution with dedicated and our demonstrating the shipments our

reduce year and versus brands. the Full product inventory company margin supply costs. past year mix result XX.X% adjusted These increased levels, to full chain XXXX improvement basis of protect over actions taken savings, This to improved is gross of price of measures sales XXX actions and last the points and transform a cost healthier year. encompass our

strategic Lower included Adjusted operating by made X.X% partially selling, investment basis business, compared adjusted increased incentive restructuring innovation management London and XXX investments building points margin line talent offset and hub our tools, product inflation. and savings, in We first brand-building in sponsoring general including additional and brand to Saucony capabilities. XXK to XXXX. model, normalized modernizing of our with awareness, Boston incremental strengthening elevate in the administrative the expenses compensation

to Full per $X.XX earnings year compared diluted in XXXX. was adjusted share $X.XX

year. headwinds. our active fourth Revenue Shifting of revenue the and end quarter performance. above ongoing was performance the Group, prior sales. business than wholesale high quarter for a direct-to-consumer with business. in in margins $XXX DTC quarter, Work by fourth more Strong in to was we decline currency full-price offset as the offsetting focused on versus the distributor grew both partially growth of Fourth and million our In significantly improved foreign outlook better-than-expected channels more international our X%

grew Saucony Moab including to X% Moab joint model Jungle franchises, the X, quarter and and X% declined business Speed. in China in due Kids revenue with venture Merrell core changes. product growth the Moc

challenging in this a Excluding original than grew environment. to actions well items, quarter, declined profitability expansion. Saucony trading expectations better and which X% reflecting strong X%, performance due these taken demand to discrete is run improve Sweaty as lifestyle revenue strategic more as U.K. Betty

supply trade the hand well originally fourth earlier orders certain the the of was a quarter of as the the The chain growth in quarter. as disruption shift XXXX timing recovery as from third than rancher of core demand strong revenue between and Most Work The for by such first driven increased wholesale resulted quarter shortfall. amount XXXX wedge, remaining XX% expected. and franchises of Group quarter shipped floor as

supply basis of saving a points, with a cost the increase margin year-over-year our our of of XX.X% Fourth operating operating mix XXX of the cost XX%, stronger outlook chain quarter quarter reflects revenue expectations on line and for adjusted Adjusted driven in by and margin exceeded performance. sales the gross healthier benefit was initiatives.

and As a our per quarter the result fourth of margin, revenue the improvement earnings adjusted above high in was share guidance. operating $X.XX, diluted of end

was at the and improved year of solid balance made last sheet. approximately progress benefits realized strengthening $XXX XX% in flow down million, optimizing We as we from our end planning cash the Inventory the fourth quarter of and execution.

we still close more inventory, be fully the to Although that level for there future work near-term is done coverage growth. to have business' adequate our the overall optimize ensuring we to current consider target,

timing. working net or profit key improved and free $XXX of We lowering expected million XXXX $XXX versus capital. in a a higher operating due enablers to profitability capital flow of lower better million and to result reduction cash delivered These were XXXX, and debt than working XX% to million, $XXX

recent website. impacts tariff we continue a our headwinds we currency found to and reflecting strength focused on our A closely. our in profitability. a outlook momentum the This growth strategic these the and XXXX, takes XXXX the is the foreign initiatives. dynamic to potential a changes. of account our XXrd look not brands presentation outlook from and also investments of impact situation support As does builds highlights investor include factors It return to gained outlook monitor be can the into The that in This and portfolio breakdown week. to improved of future, of

is plan China, take February to to As the the from X costs. believe to higher XXXX exposure on we our we and U.S. given manageable it actions current mitigate impact the tariffs relates to imports

full For grow XXrd be X.X%. estimated week, expect currency billion $X.XXX range currency year a to an is year. to of of the prior revenue to X.X% increase we X.X%. X.X% an expected the $X.XXX to excluding the in XXXX, $XX and includes to constant the headwind revenue to billion, On basis approximately million This

basis. grow the on digit Active single a revenue expect Group to constant We high currency

expected New growth city the focused and drive initiatives product go-to-market Active are launches, in lifestyle activations to key including expansion Group.

to following digits, growth outlook outsized is expanded a is new on distribution. is launches The reflecting products expected in basis. mid-teens, to constant and currency drive half of momentum, building both and expected performance second grow Merrell brand on category lifestyle Saucony XXXX gains. mid-single

line is on focus our We expect and the key top drive sales. expected low profitable footprint will single-digit X Agility XXXX growth overall continue actions including products, and in to SpeedARC further Sweaty Moab deliver refine collection, product Betty Peak offering as Speed category. to more we retail take X to the to

revenue Work Wedge constant in We on new currency Work Group basis. Trade single expect franchises as strength Group products such and the in Wolverine's from a grow Rancher. low the and gains digits core to Growth reflects

the the be range, an sales expected increase basis gross is at margin range, product to from growth. approximately Adjusted expected cost market driving for investments presence. innovation, more Adjusted expanding in expected benefit investments from full-price our margin Product we XXXX. fuel and are is midpoint SG&A up outlook outlook and at our as and of from continue approximately be savings costs These edge crucial points to competitive midpoint enhancing XX.X% X.X% for to the year savings. last offset future and of XX of X.X% are to operating the

fluctuations. is over The interest of in rate, down approximately our are XX% to the between affected interest the in be more year, $XX rate less rate we and debt near-term million and than now $XX With effective be debt from projected fixed million are $XX to expenses million, other reduction by XX%. a past net at projected tax With XXXX.

expected of to key basis. growth constant result currency diluted represents an a the is As earnings of per per $X.XX to to share $X.XX, XX% foreign $X.XX in This diluted these be adjusted range currency headwind. of including share adjusted earnings assumptions, a on XX%

flow prior million free year and Operating million approximately cash range to of over $XX capabilities incremental is the earnings reflects expenditures. This fuel modernization. of capital expected $XX range investments growth, and technology $XX million in with to brand higher

addition, be XXXX. we headwind this a anticipate capital modest as to working In normalizes, in

quarter. Turning to for first outlook our the

to to did As we phase expect sustained stabilization it the in from we performance profitable 'XX, growth, XXXX. transition accelerate throughout driving as

of of and approximately X.X%. increase revenue expect Kids the revenue May of X.X% model XXXX. impact quarter model change, currency business We growth approximately [ basis business is ] change constant the XXXX. This excluding a the $XXX and foreign headwinds million, On of an first first reflects in quarter versus the projected currency

First to discrete XX.X%, to last change. benefit which business quarter is be a a included margin, gross flat around gross model to margin expected approximately year's related

We per to be adjusted currency margin roughly flat year X.X%, be first prior earnings on share Adjusted expected constant quarter expect approximately basis. operating is diluted $X.XX. approximately to a to

which be expected lowest with quarter first The is historical consistent of the trends. quarter revenue to is the year,

over expect as margins, step-up As the key we of in year, leverage balance in operating be revenue sequential up demonstrated operating the to the a in driver ramps XXXX.

to In will and on anticipate growth. phase foundation this summary, We transformation plans in begin drive that stabilization with build XXXX turnaround, is our well XXXX, the completed the we sustainable, profitable to of underway.

critical thoughtfully the cash reinvestment technology. balancing capabilities our We modernize demand with earnings to need creation, build flow accelerate improvement for are and and essential

encouraged dynamic this to work of can lies environment, are drive growth more investing focused and our that positive deliver on acknowledge new operating in technology our capabilities, we In remain the brands, build value team we what our we we and shareholders. business. ahead, by control, to our Although momentum

up the for me before we with to let Chris back hand And call questions. open that,

Taryn Miller

happier more Taryn. people's healthier, and focused Thanks, making lives better, productive. on We're

our efforts are results, direction attractive will we're they and tomorrow. Our and, and and begin leaders that strategies. aligned to brand-building where significant believe We with giving we deliver importantly, now markets where brands are of better our believe confidence are today potential originals seeing we consumers our investment are in in believe us be the brands

be on noteworthy, biggest Saucony. XXXX, prioritizing approach, that the those a our In most focused growth we opportunities most we impactful, taking initiatives believe are will thoughtful

consumer accelerate executions, Given brand event London plan expansion in with and activations, trade media investments tailwinds new and we collaborations first in key lifestyle with trends, brand including city momentum, in and marketing, brick-and-mortar the combined to Saucony's brand's and concepts traction Tokyo. performance

to innovation plan product we As merchandise to improved design. and elevating capabilities tools with new and talent, a strengthen our company, and continue trend further right

notably systems In to addition, brands. to we platform update enhance needed our digital consumers' business, plan the our the e-commerce to with experiences drive

With growth, our platforms business while, profitability we're moving our the the close to on managing approach value balanced sustainable brands to the the planning returns chapter, and building of forward, investing more at long-term the a stabilization of same and drive further time, shareholders. to and expanding focus maximizing all

like forward. winning our on direction, know close and I of is team moving expressing new validating remarks their stronger company speak better of different improved my more agile work and our proof organization to with hard We're One but proud Thanks brand satisfied. Wolverine. financial of a gratitude by as I'd emerging every much building and say culture intently points a to the making for I done we early Worldwide when team. day are to sincere a work, we've capabilities a together working my prepared footing, the Wolverine aren't with focused today we're global I

With us your and that, with to thank Operator? morning, for taking time this questions. the take to be you happy we're

Operator

Anna Sandler. from Piper Andreeva with [Operator Instructions] comes question First

Anna Andreeva

first XXX Congrats. any Or build to these digits year? Really double quarter? at least ones doors throughout that Saucony And quick in the brand year. Two Are to for something year. to that's going the hear 'XX. nice slated for talked new on you end is Great us. the of the from this growing about

the specialty opened? accounts reception sure this should retail that you've to you question Merrell. guys And new and for if doors some the more shared on brand many we the brand similar how then just female-leveraged Not has but how been of expect year, a curious,

Christopher Hufnagel

made doors, Saucony the mentioned brand Appreciate think are I We Thanks, pleased for progress stronger, expecting the piece, heat very piece responsibly We I both product in last as doors short in very has And and yes, test period online. retailers mean, we're we've have year we're the grown did the a and gotten the time. XXX beyond last lot with with pipeline has that. of comments. performance in Anna. Saucony in year. those the count. middle the this incremental growing expanded part A time lifestyle of that door of and

open to will And in but Saucony the we from that grow in sell-through on and the and more the At business expansion. up, same we're demand for So long certainly going work seeing. very that do over encouraged driving expect the to time. that intently haul, we're that door But progress obviously we're to in focused time, business. this responsibly benefit by we're

each Merrell just at broader outdoor how shows U.S. day Merrell. sort opportunity for with worked engaging on time, the job, reposition distribution up the opening landscape, work trail. not great hard and think, the to and taking successful wholesale focused team to on story that resetting and Same sort We've both of every and lifestyle partners our new very really so of done the business. a floor, I And long-term, up has same sales the

the female consumer. great got Saucony quite with pace brands. especially opportunities. worked So record and has there opening We've a underpenetrated as for up on new Chief really some new at the brings of and doors returns track She the her focused opened, very product line. a at early pleased Product which Officer. evolve not for to the work but great hard working we're her. Merrell well, that But broader and We've is is for

made very you progress going we for encouraged are brands brands I'm and what to So in the 'XX excited 'XX. brought glad up those X those by for do

Anna Andreeva

of you up think above I That's terms margins. what just a of gross now business Taryn? gross awesome, inning you the strong XX% for at roughly on follow you Do about Chris. Can Can the the we're product over that margins. are long-term think guys reaching And in, talk XX% is Really low savings? that range time? to I goal to possibility end in

Taryn Miller

the we're pleased we've and question. the gross results Yes. sorry, expansion our expanding terms gross with gross look On as think that incremental the with we're well past as are for margin, not Thanks X margin. XXXX, years guide last for giving margin you we at X of where the XXXX, progress in in years. When at, I -- made the

with the performance. pleased So

results, a As savings in inventory, getting in healthier full both of businesses. our terms we're the less as as the from cost price promotional, well more

XXXX, I we aspirational reach to the and at say work when in beyond, there you what to done. we're XX% think looking goal, the to need we've continue work with

see sourcing our both opportunity in of We continue of to business more terms the of the product in costs. terms part

both XXXX. terms we're XXXX. for we're So And for the investments continuing look of SG&A in planned That's in as growth fueling well those to have the those opportunities we savings. and of get of our in in our how results part as

Operator

question, with Laurent Asset Vasilescu BNP . Next Management. Paribas

Laurent Vasilescu

intriguing top margin, gross on inflects, growth, from where #X of but the the XX% to slides calling to this percent. wanted mid- very up I your business aspirations for high line to single-digit in of terms to Chris, follow see It's the as Slide long-term operating you're margin XX% XX morning. mid-teens

First, around parse years? it margin, X time of looking could to the then is operating what that frame Is to next the potentially kind over SG&A And there if maybe part cost at. currently to out is from divest? want business really have? a base leveraging underperforming operating it you Or that an perspective the you that's you're margin that like you get of

Christopher Hufnagel

I'll that. add to and Taryn begin let . Yes. I'll then

Taryn Miller

mid-teen we profit date for the a to Thanks It's question. on set the aspiration objectives. for too provide early our that margin

as about have up the encouraged, guide shared, XXX in in another 'XX, are XX. And I basis progress points. the 'XX, We would

that years. And close includes, includes XXXX, to from point headwind a for in X Laurent So that XXX points basis basis XXX -- currency.

thoughtful So brand-building I to really optimize say That to 'XX. we're just a to years investments top for we and in that's cost that line grow to that the why performance the plans the few ago. we're the and is make continue minutes path the pleased spoke mid-teens seeing to X with

Christopher Hufnagel

think that, we we're chapter, done work We've as focus think the which growth. now can obviously highlighted organization. and to I stabilize lot on the largely about specifically, we a we've talking XXXX next is about of turnaround and finishing

has historically, invested certainly in And investments, year, are that enough potential think the At we invest because in we seeing in doing platforms with this the certainly some same and just our need that momentum. think time, in with and platforms. we as the Saucony haven't that we're our most greatest We is the organization. of tailwinds as leading well step-up think got brand the investments to within behind brands Saucony And a category. I those portfolio. an we've I tools

So long-term those it and shareholders. year. do we the we're end thing to is certainly, think best our We drive our the brands investments organization, to sustainable in for the think of right and stepping the for day, it's this up growth interest the of at

Laurent Vasilescu

then modeling. some clear. Very question And on housekeeping

for for further margin shift margin, evolve XQ XXX guidance? you can was there mentioned line any And a how from for XQ, number? Maybe there gross basis in what's revenues the on XQ to that up we roughly should does And quantify you to that into expense consider think work. of XQ? year shifts the points? I gross interest in the lastly, get this terms Are

Taryn Miller

Yes. Great.

I sure in I so there's So get make think them all. questions for there, three

in that that of shift Group, would the saw. Work we highlight one the terms For is that we

three remain the quarter in I revenue the were the his the remarks, is opening chain is the patterns, on inconsistent second timing our brands and Chris say supply One would As in encouraging third the of trends the performance Work for shared the fourth the factors. is overall Group, order results while based market.

The -- first we first you'll quarter. the of quarter we the timing this a a decline expect revenue, digits is currency. About to the between around and a shift materials half of in double fourth provided, million, constant of low so see is $X decline approximately Work half that about decline result Group result

Group, we we the do key to across start our think into for think go brands. to our So expect new year improve inventory the in and starting performance and quarter a the the the as on I -- is this Work slow market while replenish second products the products I meaningfully

So that's on Group. Work

price it we the in product in inventories market margin, that savings continued more better, in I've is and full is as well on that the XXXX initiatives performing. the really the the innovation gross previously. what we're cleaner that of as from we and to price terms through shared seeing have full In benefit as really started get is is the marketing cost It going

in gross benefit are really those the margin. So continued

relates your interest As to me? expense, on question remind specifically that, it

Laurent Vasilescu

assume the item, for much how Just we line year? this should

Taryn Miller

Okay. Yes.

from and debt. So million driven we to expect net in interest reductions million and in $XX down is net This other around a to the of $XX XXXX million that we've be XXXX. expenses in $XX result really

terms of I Yes. was quoting And a was said I clarify. a to basis when do point margin, operating terms impact. to I to on headwind of . point on talking talked I really want about in EPS XXX clarify FX, impact earlier I the in It's -- the FX.

Operator

Williams Next Poser question, Sam with Trading.

Samuel Poser

you mentioned independent for the specialty you identified positive here. that Merrell. vehicle handful One, a growth -- retailers as have I a

If you women's week between the Saucony you're And quarter see of. type and give speaking going, of retailer XX the without XX? you as for men's where wondered do some of that of split example what -- the value percentage was. week you and And And for could up me a I then tell the were

Taryn Miller

XXrd week. the XXrd the be with Thanks in for will question, start I'll week XXXX. Sam. The

we not XX of basis We'll So approximately growth. 'XX. see expect it The it week, to provide was points it XXrd 'XX. in in

period shipments the So holiday trading the big and a timing it's last of not us of for it. the year the given week -- is

XX full our it's going revenue points is in basis the terms growth say, week given minimal cost SG&A a is the as it small And we full of I year it. So for and that XXXX. would through have profit,

Christopher Hufnagel

And the I first question. Sam, part, appreciate the

sort lifestyle At obviously, worked the significant in reengage. and accounts outdoor space. outdoor we've Merrell time, up we're by. one-off fastest as share performance encouraged sort And piece. of been We we're the to headwinds lifestyle expansion. rate specialty our that Merrell are of tracking, hard piece we well the the encouraged have Specialty a there's of progress the by new been the lot as anyone, with we've both in at there in which have same as know team really you is certainly And gaining doors, opening seen

are to going years. and begin You're haven't see to up perspective a mall been from we seeing Merrell in show a where for lifestyle

a So of that reset really landscape. wholesale U.S.

by. and X has and resetting and dropping very core Moab has moving for, products beyond both good encouraged the known years the new then engaging that done I whether it's for Speed business we're the Merrell Peak job think a X them Agility with really team the products, really been in or the

in So quarters wholesale news X EMEA. And for Merrell. both here of encouraging consecutive on Merrell the U.S. nice the as steady in well for progress, as channel growth

Samuel Poser

to then in do And Betty, have add stores the are there And lastly, many on how Sweaty you stores U.S.? currently? plans

Christopher Hufnagel

planned XX approximately this There's stores for new XXX Yes. And got today. stores we've year.

and really currently Chicago, positive We Georgetown one in those a U.S., markets. the have one doors. Early X testing stores those to open in are reception returns in

open We are or the stores specific We're metrics, whether U.K. checking plans more new key the U.S. of to XX fleet. sort doors seeing all But store No are are. ASP. where conversion The the some this in really U.K.-based. with that's year. stores it's

Operator

Securities. question, Next Seaport Kummetz with Mitch Global

Mitchel Kummetz

guess a bit I is housekeeping. the first one of a

brands don't your Merrell, X I presentation. in main sales Sweaty that On the you Active Betty? the in the can us guidance, Groups: think and by your Saucony give expectations QX was

just think an it. gave active you I number, I overall maybe but missed

Taryn Miller

miss you didn't No, it.

our guidance I our our the detail level. the we think meaning basis. a level them we to but as for year we're -- 'XX was transformation, details believe brand external But I quarterly it provide of for full guidance quarterly we're closer -- segment, In segments, providing work. guidance reporting to and line to active by the Mitch. on shifting will This not revenue means terms continue of that on at to provide we believe not important progress that brand

Mitchel Kummetz

couple things. And particularly was I'm where XXXX? a other Okay. of standpoint, in And marketing going that maybe from then -- in about is talked what a Chris, in rate Saucony. your you from marketing investment a 'XX? curious

Christopher Hufnagel

in 'XX. Yes. versus up be It 'XX will

the finished year. it as this up was right at well around X%. again 'XX 'XX, we It company. be below think even X% I And will then

XX-K Covent invest So that that brands. around Investments brand lot investment up think the open which include concept the of again, category We're think for Saucony and has to good new in because all wait shortage for is back store and associated well a second run be can't clubs as year. year time to with the life to Paris along the events. this bring part our London we The behind will of the strategy leading We'll first Saucony ] will those things ideas. in the activation those tailwinds Eiffel a XX-K sponsorships. year and momentum, year be for the I sponsoring Garden, that. in with Saucony, for this activations XXK with I May, this [ and

win specialty, -- then allow us a investments And nimble also platform, on and competitive brands our be to more up more And the branded help our on show both war us we end. on in the in in well. in in is goods, needs against the invest provide frictionless day which to experience, the how very floor back experiences a then of e-commerce sporting to our updated, in in better the the in ground -- marketing as here down doubling and investments sort boots day how company set. We're to be and going U.S. to investing out other consumers run

in needed. financial about about for excited able our to we're for been we months to brands through to mean that strategy. ultimately that's over I'm to going our brands. So get all glad It XX the our what and back the past invest I'm shareholders. the for work is our our investment team, for have the give meaningfully wherewithal to begin company, excited and us

Mitchel Kummetz

curious, maybe going then impact lot a we've early it for seen like rate cold And the that, how you to the even year? business, XX of XXXX. final much having you Saucony say the overing [ then follow-up as is or a possibly on my the a can weather that I'm question, headwind Is business? a boots any of And a tailwind quick just bit basis Are that on up? on running seeing in that ] points

Christopher Hufnagel

styles a the and running No seasonal to would winter business Saucony Yes. there on boots, report. I headwinds say I say would is benefit.

we have at-once ] e-commerce as we [ order get We to obviously new year. And every a eye the turn are book. our we on own orders close the day, results. seeing good obviously, some And

cold hurt And specific which it's not not we're year bit, has stay but year. the weather, giving the guidance like here So to versus last up certainly little think marketing, I this looks it will organization. a on be for

Operator

question, Next with Jim Duffy Stifel.

Jim Duffy

relative a continuing of share? the to of the Are share to me. the Chris, strong you A any really category channel, couple health And of of for of questions indeed moderation you speak seeing you then years gain Saucony's just after state speak could there? specialty growth? couple that within about category. run Are that

Christopher Hufnagel

really and channel U.S. running to brands. Yes. specialty and is the run the special Thanks. in U.S. important Great certainly important a question. channel The performance

report the relative beginning share by and the by like really our of collections, Guide, both is And a Saucony for: market Endorphin And up the I driven Hurricane. I has to Triumph share. brand sort And really Running innovation quickly on good on right. gain increase to years. our on mentioned, strong time, focus for of Elite losing seeing after a we're that been pleased core really again a a at You're and sell-throughs. think ride positive focus share same catching number I'm product and tear. And a is to that

the be a to as lags a I Obviously, It channel, We're seeing not you is but weakening. sort little think know. And that data That to trend make healthy. our those going significant we continues. Saucony ground and appears doors very to investments still going game. competitive any are of bit year benefit in this invest brand focus team's the some as in in we're of

able demand we're out has has the the up why momentum now creation we're pleased really the we seeing there, get by to best-performing which across product innovation. 'XX, is the healthy. stepping So Saucony and marketing to investment channel then Obviously, have brand. been one categories, business been really the and to that the led we're And reset be category continues of in appear the to

Jim Duffy

Okay. And on inventories. Taryn, the ask I wanted to

inventories. that are so rate done managing great where back of some you tight sales need have as super into are sustainable tight. inventories . line to They're the you a make you're job missing there this because levels? places item? Or Do see investments the a guys You inventory

Taryn Miller

my Thanks modest made cash The reductions guide as I XXXX as last we've -- years. the for in a for to the X inventories, question, in healthy remarks, and would target In I Jim. as provided, investment we that close assumes that levels. the inventory prepared meaningful in our inventory characterize in would called Yes, had normalized. overall I say, they've

XXXX a very We to continue thoughtful healthy. we But But I'd to a chase able more say, to it's support Saucony. the and are investment in be growth. so, modest investment, in there opportunities -- are overall, making disciplined

Operator

question, Next UBS. Mauricio Serna with

Mauricio Serna Vega

with maybe bit in if QX. but just on think cost like like could Sorry Could update DTC And are Also like what like fiscal maybe caused to early I an deleverage seems talked a that? more bit elaborate your in little guidance implies savings, elaborate the decline some how you the maybe modest you too provide this, about maybe, you I that reconcile little in that how more on a about missed on but -- you thinking in year you 'XX? it expenses. do sales

Christopher Hufnagel

cost DTC to then Taryn the I'll and on hand Sure. take I'll it the question over piece.

top issues to which the inventory portfolio We But QX, put doubt. there's were inventory tried promotional line. promotional. were across no think 'XX of line, the we're piece. year, in we on less in tried top the put Obviously, working we through really to pressure be I promotional, brands earlier the and pressure as some through certainly we've less working on in be really the

I in think the basis an tracking. we was year, which this higher in points that than last it metric important penetration total, quarter year were our full was price is XXX

do can same I we our direct-to-consumer think in time, the better At channel.

have what have I think as would brands relates it quite is but Week that the brands to some do But to Black channel. some the brands, say, than was of there. weeks the go in more about. expectations business accelerate work expected. performance fourth inventory less closing specifically, to of which some overperformed couple around Cyber direct-to-consumer our Friday, we did that a there we didn't our do we have had we I Encouragingly, to had actually certainly We quarter, the year, and do we see. challenges, we did are in positive think meet expected Saucony I our the specifically.

had stronger a could the Saucony think just I -- great for fourth demand quarter. the have was we so But product.

it's So across And we all to manage and I wants think I think in DTC. thoughtfully do to think partner consumer as important the our I have Again, and owned. and company moves channels. then is distribution our own channels the necessarily shop wholesale focus. our in not brands responsibly an forward, manage DTC

give the piece. those to I And tools excited time, think It's have do easier with consumers we're they'll better So updating and give the the in navigate, own faster, they important a experience. our same will the friction. consumers experience. think come planned branded investments about there opportunity e-commerce be where can will a brands. better we They'll our we to platform better their be there. tell It's about stories. it's engage And I be less to At consumers learn our an where where products,

Taryn Miller

that savings XXXX. coming really I And took are performance actions is of margins well that better in gross relates getting margin margins to We're expanding deleverage. point are as top the both at operating we we margin, mentioned midpoint the gross the cost to taking incremental Both -- expanding. of result basis as in actually line see relative points Operating you in this that initiatives had and And think XX a XXXX our leverage. XXXX. through, the is it to as to guide XX continue the operating we from

to marketing and SG&A capabilities, is the as we the margin, building line, around modernizing investing are we investments model it in the business talent the around in thoughtful our In basically, business, the taking build our brand are operating tools have investments as Chris well for compensation. our further spend those that savings incentive to the normalize we as well of we're that earlier, and XXXX sight offsetting as spoke to inflation by line as fueling

business. the expanding. healthier So the we're savings, margins inventory, in carryover invest that We're are benefiting using from to better, and

Mauricio Serna Vega

on on follow may make Great. this maybe up first sure the just quarter. didn't I provided. presentation And I for if you miss the that just to sales want guys I

like by from outlook first anything gave can that by tell there Is perspective? quarter us you You that brand for brand.

Taryn Miller

Yes.

Group. guidance moving the guidance we our shared, basis. to is not trajectory provide basis can an I We're see to annual to we're As that quarterly are not -- quarterly and We're going which we're at brand how you basis. active so reporting, Work providing on continuing a and business over brand on on growing but segment the time, the

Operator

Next Jonathan question, with Baird. Komp

Jonathan Komp

Maybe bigger just question. picture a

any back uncertainty on growth single-digit to revenue there? As from it are high currency, and and at I'm what maybe guiding constant aspiration, mid-single-digit you're the some baking back just curious, payoff? it more Is factors Is in? holding growth? macro the Just XXXX, initiatives factors mid- you step of look you long-term broader to the achieving the perspective new main

Christopher Hufnagel

very across the question, hard The year. time. what encouraged our I'm continues outlook to Merrell at and And same company Saucony in progress of deliver for what for the really get very at same I tough well you're looking said every working exact the total in this I encouraged to portfolio category. made appreciate growth. Jon. can it's the equally Saucony brand a mean, can by we've by be Yes. Obviously, brands, a be

biggest could time to growth. thoughtfully very profit gross the those Probably to time, sort and, we've sustainable worked get the margin, in same drive on long-term be distribution. hard trying expand of reset growing be levels. to done of at way business, the to tremendous faster, we're responsible Worked short good X in at very growing our think I work importantly, a brands, meaningful brands So period a

same At been time, very we've the open.

then with continuing we're -- really it Group Work then sort as results. our Group. working starts of Betty, need hard really driving relates then the that business products thoughtfully the compelling Betty pleased of in portfolio on into each finalize we And better Sweaty And and the every get Work that Sweaty profitability to to by and business, Our and which to the the of integration day.

where at certainly, same At I conclusion. our standpoint, think to biggest weren't lot gives to corporate faith the at are we're headline, to they that to So well categories the deliver outpace sight of able the book, can time, us those the draw order brands, that it you think, year. are of in line going a their to numbers. this be I they their And have we where going

this work going fuel And to really in we're perform why where performing that's we're not -- work to going -- which to to So hard to accelerate investments, those get talked at pace, we're those and continue we've places then those year about. better. to teams

Taryn Miller

you week. the And Jon, currency we I revenue on would at do of you build you provided, when XXrd exclude exclude constant -- -- the to what range benefit when and said, Chris just a that guide it's look

guidance is a putting -- of aspirational are targets. to which We the X of at those X.X% X.X%, really midpoint

to what move Chris do we continue to look out mid- high as the we the the laid to to the grow businesses. how think I high, is to

Operator

[ question, Dana Telsey ] Next Telsey Advisory Group. with

Unknown Analyst

'XX. the achievement in to Nice targets the of see

to full-price And newness about newness are shelf. comes to percentage think the you've forward? get the China. for the you in about Any from where, products, exciting talked to in you Chris, about on lastly, just this And any products last the Merrell you thinking particularly your sourcing about I areas How are AUR always going biggest And As know have big that compared and mid-teens place manufacturing have year? from? 'XX you change Saucony? where how you percent earn year and of your thinking other

Christopher Hufnagel

to China. Thanks. further It to we're the And paying question year. daily. China, seems tariffs X today. the the and announced Dana. I'll right and obviously reduce sourcing guide. this that attention situation, the that we it hit But changing to think We'll reduce within now, is in first. tariff with navigate be the mid-teens questions, continue Good announcement, current February can We'll we Yes. volatile

to going all business of lot begins took I is the And a we innovation our grow that product was newness In and not thing. And the coming closed the took And right. win it the we thoughtfully right most out had suffered business, think really and and with and And pandemic, We that products. And of you're again. inventory our weren't inventory important product. lacked. compelling bringing look 'XX I'm we've moving glad that that. through -- on. to to that reset chapter we And was

it's entrant. I XX. [ Triumph As as and think just we core Saucony it new Ride product in and to focus ]. Guide continues newness, dropped the is pipeline the a relates The to been. our Hurricane X, is check good new on Merrell as

the Endorphin super I of going shoe couple a we're a here business the best going changer. of in in game to is in shoes X think X the be I that weeks, to Elite think and launch

how they into piece, making in best of the collaborators some door lifestyle and brand archive I translate job has that relevant with and on to that expansion. are take and business we consumers, tapping brand styles record then a heat those the great we're drawing brand of think growth, the sort meaningful the resonate in done with I Saucony for partnering think a along heat century-old seeing and really the which

I'm too. for looks So and Merrell. like innovate, I team product be said to Same the lucky pleased really in Saucony. I'm the eyes And pipeline by progress I'm we've encouraged that can think 'XX continues because what that I've by made. into very

the color trail great to they're same really way. everyday X, when wearing fast Moab I well people with collaborations beginning of had lifestyle to styles we're sneaker. very great takes extraordinarily be compelling the see in resonating that a an both can Agility at very think really really really It begin But going We're us. and I for partners enough. that long X big take are rates The that weren't outdoor trail to and root. trail as outdoor time sort shoe and those critically her said. businesses. X some were And please products and long they're check to think and Merrell our a wearing Peak and to Speed important we sell-through really of bridges a in legacy new innovating that to material it continues hike,

point, And looks then I'd SpeedARC to point fundamentally BOA, just the price that $XXX we Surge disruptive a shoe dropped which different.

Best expectations going we're business and New ISPO is to it shortly with the of last One Invention award point. with well year at dot-com at follow outpacing SpeedARC thereafter our price winner an that own Times $XXX our And MATIS.

moving are pace. So I think teams with our product

think was 'XX a to in new year, And very I think I good bringing 'XX been development introductions. the 'XX has great.

talent. new to brought also We've

now. her And a on season's for been a she's ground by the couple thinking -- reviewing on Merrell. and that has of the about product opportunities have had the the have. months I the encouraged business a with of way sort really She just meeting Officer Product next I'm we in line. new We Friday Chief

very the pipeline, and by reset had and going mean it's I'm in what that encouraged really I'm So opportunity and to 'XX 'XX beyond. the company product pleased the really we business the in to for

Taryn Miller

expect to our see the amount to with effort year-over-year selling a the promotional regarding cleaner of well inventories over levels in promotional average concentrated spend your prices, time. as taper decline and question And we on continued back

Operator

Ashley question, Markets. with Capital Next Owens KeyBanc

Ashley Owens

Great.

the guidance XQ. I margin just operating wanted on to quickly, touch for So

more if what's guidance this all marketing increased driving that And year little scale SG&A just little kind and a get that X.X% a is within last stemming it's gave. to color or bit year. think Can the through can the from than then lines, you on for you provide of just margin deleverage I that the lower how XQ?

Taryn Miller

Great. Yes.

for I'll margin. with So margin, operating the gross start actually

XX.X%, costs and taken supply of the actions guidance and gross to health our to strong level QX this improve to that take and reduce and a chain of margin we has the the inventory. reflects have So continue

revenue. As the year reflection it has margin, been lowest revenue relates operating quarter of to is of a first quarter the more for leverage this and operating historically the is

And at QX. and look this you QX would to level, than lower we operating through leverage is when expect what also see

a reflection is So throughout really leverage the grow situation, -- it's we level, anticipate gross margin operating margin more year. -- more while it as it sequentially of is will the is strong, on a revenue operating an which

We will continue sequentially improvements XXXX to as see as as we did in operating well well. margin

share -- to saying When I which full get I line any say, impact, on headwind even. think earnings $X half a would into in particular probably of And year. not I year But disproportionate, million the won't is per I think that's year. you the the it's do about total were around ForEx on specifics. on the us

year that from on about full profit currency -- So headwind is an even spread.

Ashley Owens

last then Great. just one Okay. And one. had I

union know state than a expectations. So was bit little of maybe the I softer it Betty. on a Sweaty of

additional and to doing and new And may broader have additionally, competitive your potentially thoughts to in market. you an categories perspective effectively products how color year can you're introduce space overall just innovation athleticwear expectations. one, underperformed what as a then from what relative this the on So

Christopher Hufnagel

a pleased than how we've I is, quarter Betty the think where the for worked year, really that pleased in for obviously, and by moving outlook forward. total made with Sweaty level, Yes. really that print the we've there integrate softer business we But progress the At and to team anticipated. then

So that of we've that hard business part the brand worked having profitability be really on portfolio. and really of improving the

very from in way to message a think empowerment. premium a I continue very a product very attack attractive a around category with strong So standpoint, female

so just to with up Don't week Damn Shorts going the Sweat we're And campaign, It or campaign, is resonating that a The follow campaign. debuted ago. with new it consumers, the and Wear

team last in continues as a quarter also Chief So encouraged year. that Product Sweaty team. There's by of the place the Betty new encouraged as But again, progress. of fourth that Officer group to by move, in

hard to product we'll this the forward. and is worked that business look grow pipeline think moving to We've improve obviously then year, I the profitability really good.

Operator

for We conclude Thank today's teleconference. thank you. your you does This participation.

this lines may disconnect You time. at your

Wolverine World Wide (WWW) 19 Feb 252024 Q4 Earnings call transcript