Wolverine Worldwide says Q2 results exceeded expectations

Worldwide
Published:  14 August, 2020

Despite the unprecedented global market conditions and significant retail store closures due to the Covid-19 pandemic, the U.S. footwear manufacturer said its financial results for the second quarter ending June 27, 2020, significantly exceeded its expectations across every key financial metric.

Wolverine’s reported revenue was US$349.1 million for the second quarter, down 38.6% compared with the same quarter in 2019. Owned e-commerce revenue grew 96% year-on-year. Reported gross margin was 42.2%, compared with 40.5% in the prior year, reported operating margin was 2.1% (Q2 2019:  9.8%), and adjusted operating margin was 5.1% compared with 11.1% in the prior year. 

“The Company's second quarter results were much stronger than expected, despite the negative impact of unprecedented global market conditions and significant retail store closures for much of the time period”, said Blake W. Krueger, Chairman, Chief Executive Officer and President, Wolverine Worldwide. “Our brands excelled online, with nearly triple-digit owned e-commerce revenue growth, benefiting from strength in key product categories that are resonating with consumers and the digital capabilities we have invested in over the last several years. The acceleration of our digital direct offense, together with our diversified and agile business model, enabled the Company to adapt to the rapidly changing marketplace and deliver positive earnings and exceptional cash flow in the quarter”, he said, adding that the Wolverine is well positioned to accelerate out of the current market downturn once the impact of the pandemic subsides.

Wolverine said it paid down its debt by US$665 million, leaving a balance of US$125 million, and ended the second quarter with US$423 million of cash in hand, total liquidity of US$1.1 billion. Given the strong cash performance in the second quarter, the company now expects to generate US$200 million to US$250 million of operating cash flow for the full year.

The company also announced the appointment of Brendan Hoffman as its next President and his appointment as a member of its Board of Directors, both to be effective on September 8, 2020. Hoffman is to report to Blake W. Krueger and is expected to transition over a period of time to become the future CEO of Wolverine Worldwide.