WWW - Wolverine World Wide Inc. (WWW) Q4 2023 Earnings Call Transcript

2024-02-21 12:29:07 ET

Wolverine World Wide, Inc. (WWW)

Q4 2023 Earnings Conference Call

February 21, 2024 8:30 AM ET

Company Participants

Alex Wiseman – Vice President-Finance, FP&A

Chris Hufnagel – President and Chief Executive Officer

Mike Stornant – Executive Vice President and Chief Financial Officer

Conference Call Participants

Jonathan Komp – Baird

Jim Duffy – Stifel

Abbie Zvejnieks – Piper Sandler

Ashley Owens – KeyBanc Capital Markets

Sam Poser – Williams Trading

Mitch Kummetz – Seaport Global Securities

Mauricio Serna – UBS

Presentation

Operator

Greetings. Welcome to the Wolverine World Wide, Inc. Fourth Quarter and Fiscal Year 2023 Earnings Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded.

I will now turn the conference over to your host Alex Wiseman. You may begin.

Alex Wiseman

Good morning, and welcome to our fourth quarter 2023 conference call. On the call today are Chris Hufnagel, President and Chief Executive Officer; and Mike Stornant, Executive Vice President and Chief Financial Officer. Earlier this morning, we issued our earnings press release and announced our financial results for the fourth quarter and full year 2023 and guidance for fiscal 2024. The press release is available on many news sites and can be viewed on our corporate website at wolverineworldwide.com. This morning's earnings press release and comments made during today's earnings call include non-GAAP financial measures. These non-GAAP financial measures were reconciled to most comparable GAAP financial measures and attached tables within the body of the release.

References made regarding financial results for 2023 and comparable results from 2022 in each case for our ongoing business exclude the impact of Keds, Wolverine Leathers and reflect an adjustment for the transition of our Hush Puppies North America business to a licensing model. The outlook for 2024 and comparable results from 2023, in each case, for our ongoing business now also exclude the impact of Sperry, which was sold in January 2024. I'd also like to remind you that statements describing the company's expectations, plans, predictions and projections such as those regarding the company's outlook for fiscal year 2024, growth opportunities and trends expected to affect the company's future performance made during today's conference call are forward-looking statements under U.S. securities laws. As a result, we must caution you that there are a number of factors that could cause actual results to differ materially from those described in the forward-looking statements. These important risk factors are identified in the company's SEC filings and in our press releases.

With that being said, I'd now like to turn the call over to Chris Hufnagel.

Chris Hufnagel

Thanks, Alex. Good morning, everyone, and thank you for joining us on today's call. To close 2023, we delivered revenue and earnings in-line with our guidance and our inventory and debt finished at levels better than we had anticipated. More importantly, we continue to make great progress in driving Wolverine World Wide's turnaround and transformation. With a clear vision, a common sense of purpose and a collective effort of our global team, I'm proud and encouraged to say that Wolverine World Wide is a much different company now than it was just six months ago, and I'm excited to share our progress with you today.

As we begin 2024, our portfolio is more focused than it has been in over a decade, composed of authentic leading brands, playing desirable consumer categories, and we're confident this will continue into the future. The organization is more efficient and more capable of building great global brands with new talent and key brand roles and new centers of excellence created to help enable our brands to build awesome products and tell amazing stories. Our business is poised to be much more profitable with an outlook to meaningfully expand operating margin this year as a result of significant gross margin improvements and our restructuring efforts late last year. We have the financial capacity to reinvest back into the business with $30 million of incremental investment planned this year for key brand growth initiatives and the tools necessary to support long-term sustainable growth.

Our product pipeline is stronger with new introductions already resonating with consumers and more great collections dropping in the coming months. Our balance sheet is much healthier with the company's lowest debt level in over 2.5 years, approximately 40% less inventory than just a year ago and a clear line of sight to drive further improvement on both metrics this year. And finally, we have a talented, aligned and motivated team driving the business every day. I'm extremely thankful for their exceptional work over the past six months and couldn't be more excited about the work we'll do together moving forward....

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