Wolverine Worldwide Reports Strong Double-Digit Quarterly Revenue Growth With Robust Demand Continuing Into 2022

Wolverine World Wide, Inc. (NYSE: WWW) today reported strong financial results for the third quarter ended October 2, 2021, and updated its 2021 fiscal-year revenue and earnings outlook to reflect recent supply chain challenges.

“The Company delivered strong double-digit revenue growth and exceptional earnings leverage, despite the increased supply chain disruption caused by Vietnam factory closures and global logistics delays” said Blake W. Krueger, Wolverine Worldwide’s Chairman and Chief Executive Officer. “Merrell was hit hardest by Vietnam factory closures but still delivered mid-single-digit growth. Saucony and Sperry both drove over 40% revenue growth. The unplanned supply chain disruptions resulted in at least a $60 million negative revenue impact in Q3. Demand for our brands remains very strong as evidenced by continued strength in sell-through trends at retail and a robust order book that extends into Q3 2022. We remain bullish on our outlook for the future in light of these trends and the composition of our portfolio which over-indexes on performance categories like hiking, running, and work. We are also excited about the addition of Sweaty Betty to our portfolio – a fast-growing brand that enhances the digital and apparel capabilities of the Company.”

THIRD-QUARTER 2021 PERFORMANCE
On August 2, 2021, Wolverine Worldwide acquired women’s activewear brand Sweaty Betty, a digitally-native, premium global apparel brand, which is expected to fuel growth and enhance the Company’s fast-growing eCommerce business. The following third-quarter results include Sweaty Betty during the period from August 2, 2021 until the end of the quarter.

  • Reported revenue was $636.7 million, up 29.1% versus the prior year. On a constant currency basis, revenue was up 28.2% versus the prior year.
  • eCommerce reported revenue was up 45% versus the prior year and up 126% versus 2019.
  • Reported gross margin was 43.2%, compared to 41.0% in the prior year. Adjusted gross margin was 44.6%, compared to 41.3% in the prior year.
  • Reported operating margin was 6.7%, compared to 8.6% in the prior year. Adjusted operating margin was 12.0%, compared to 10.6% in the prior year.
  • Reported diluted earnings per share were $0.00, compared to reported diluted earnings per share of $0.27 in the prior year. Current year reported earnings includes costs related to the acquisition of Sweaty Betty, debt refinancing costs, certain litigation-related costs and air freight charges related to production and shipping delays caused by the COVID-19 pandemic. Adjusted diluted earnings per share were $0.62, and, on a constant currency basis, were $0.61, compared to $0.35 in the prior year.
  • Inventory at the end of the quarter was $412.0 million, up 26.5% versus the prior year. Sweaty Betty contributed 16.1% to the increase versus the prior year.
  • Total debt at the end of the quarter was $1,024.4 million, or $147.8 million more than in the prior year. Total liquidity considering the October credit facility transaction was approximately $800 million.

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