WWW - Wolverine World Wide rallies after earnings topper confirming plan to explore options for Sperry

2023-05-10 06:51:52 ET

Wolverine World Wide ( NYSE: WWW ) reported revenue fell 2.5% in Q1 to $599.4M.

Revenue growth in the Active Group segment (+15.0%) was offset by drops in the Work Group segment (-17.3%) and Lifestyle Group segment (-20.9%). Big months for the Merrell (+20.3%) and Saucony (+24.5%) product lines were offset by softness with the Sperry (-12.9%) and Wolverine (-12.1%) brands.

Adjusted gross margin fell 350 basis points to 40.0% of sales during the quarter. Operating margin was down 310 basis points to 5.1% of sales. EPS came in $0.12 vs. $0.38 a year ago and $0.03 consensus.

Inventory at the end of the quarter was $725.9M, which excludes $11.2M for held-for-sale business. Inventory was down approximately $19.0M sequentially from Q4 of 2022.

CEO update: "During the first quarter, we saw supply chain and working capital improvements in the business... Importantly, we also gained more certainty on current-year cost savings from Profit Improvement Office actions and we remain on track to deliver the earnings improvements planned for this year. The trading environment is challenging, but the diversity of our portfolio and its global reach is expected to help mitigate those challenges. As a result, we are reaffirming revenue and earnings guidance for fiscal 2023."

Looking ahead, the footwear seller sees revenue from our ongoing business landing in a range of $2.53B to $2.58B vs. $2.55B consensus. THe company also confirmed that it is now exploring strategic alternatives for Sperry while continuing the foundational work needed to position the brand for long-term success.

Shares of WWW rallied 2.98% in premarket action on Wednesday.

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