Core Insights - The rivalry between NIKE Inc. and Wolverine World Wide, Inc. highlights contrasting strategies in the athletic and lifestyle footwear market [1][2][3] NIKE Inc. (NKE) - NIKE commands substantial market share in the global athletic footwear and apparel market, with a presence in nearly 190 countries and over 40,000 distribution points [4] - Despite a 9% year-over-year revenue decline in Q3 fiscal 2025, categories like Running and Training showed strong momentum, indicating potential for recovery [5] - NIKE's strategy focuses on five "Win Now" actions, emphasizing digital innovation, brand distinction, and local engagement [6] - The company faces challenges such as elevated inventory levels and margin pressures due to markdowns and discounting, which are expected to persist into the first half of fiscal 2026 [7] - NIKE's fiscal 2025 sales and EPS estimates suggest year-over-year declines of 10.7% and 46.1%, respectively [16] Wolverine World Wide, Inc. (WWW) - Wolverine has shown strong momentum with a focus on growth and profitability, supported by a diverse portfolio including brands like Merrell and Saucony [9][11] - In Q1 2025, WWW reported revenues of $412.3 million, a 4.4% year-over-year increase, with Saucony achieving 30% growth [11] - The company is implementing a "fast and bold" strategy, focusing on cleaner inventories and full-price selling, which positions it well against macro headwinds [12][15] - Wolverine's EPS estimates for 2025 suggest year-over-year growth of 15.4%, indicating positive investor sentiment [16] - The stock has outperformed NIKE, with a total return of 41.3% over the past year compared to NIKE's decline of 31.8% [19] Valuation and Market Position - NIKE trades at a forward P/E multiple of 32.5X, above its 5-year median, while Wolverine trades at 16.31X, also above its 5-year median [23] - Wolverine's valuation presents an attractive entry point, especially with strong momentum in high-growth brands [26] - Wolverine's operational efficiency and strategic roadmap position it favorably for future growth, contrasting with NIKE's ongoing challenges [27][28] - Wolverine is viewed as the more attractive stock pick for investors seeking a blend of value and growth potential [29]

Core Insights - Wolverine World Wide, Inc. (WWW) reported strong first-quarter 2025 results, with revenues and earnings exceeding expectations and showing year-over-year growth [1][3] - The company's shares increased by 10.3% following the announcement of these results [1] Financial Performance - Adjusted earnings were 18 cents per share, surpassing the Zacks Consensus Estimate of 11 cents, and significantly up from 5 cents in the prior-year quarter [3] - Total revenues reached $412.3 million, a 4.4% increase year over year, and exceeded the Zacks Consensus Estimate of $395 million [3] - Direct-to-consumer revenues decreased by 9.4% year over year to $96.4 million, while international revenues increased by 16.4% to $207.8 million [3] Segment Performance - Active Group revenues rose by 12.7% year over year to $326.7 million, beating the consensus estimate of $298.2 million [4] - Work Group revenues fell by 17% year over year to $74.8 million, below the consensus estimate of $84.1 million [4] - Other segment revenues dropped by 28% year over year to $10.8 million, also lagging behind the consensus estimate of $13.1 million [4] Brand Performance - Merrell's revenues increased by 13.2% year over year to $150.6 million, while Saucony's revenues improved by 29.6% to $129.8 million [5] - Wolverine's revenues declined by 9.2% to $37.4 million, and Sweaty Betty's revenues fell by 15.9% to $38 million [5] Margins and Costs - Adjusted gross profit was $194.8 million, a 7.3% increase year over year, with an adjusted gross margin of 47.3%, up 80 basis points [6] - Adjusted operating costs rose by 4.9% to $170.2 million, with the metric as a percentage of revenues increasing by 100 basis points to 6% [6] Balance Sheet and Cash Flow - The company ended the quarter with cash and cash equivalents of $106.5 million and long-term debt of $565.8 million [7] - Net debt decreased by 12.1% year over year to $604 million, and inventory was down 23.6% to $271 million [7] Future Outlook - For the second quarter, the company expects revenues between $440 million and $450 million, indicating growth of 3.7-6% year over year [9] - Projected operating margin is 6.7%, with adjusted operating margin expected to be 7.2%, suggesting an increase of 90 basis points from the previous year [10] - Earnings per share are anticipated to be between 17 cents and 22 cents, with adjusted earnings per share expected between 19 cents and 24 cents [10]

Core Insights - Wolverine World Wide reported revenue of $412.3 million for the quarter ended March 2025, marking a year-over-year increase of 4.4% and exceeding the Zacks Consensus Estimate of $395.35 million by 4.29% [1] - The company achieved an EPS of $0.18, significantly higher than the $0.05 reported a year ago, resulting in an EPS surprise of 63.64% compared to the consensus estimate of $0.11 [1] Revenue Breakdown - Active Group revenue was $326.70 million, surpassing the average estimate of $298.16 million by analysts, reflecting a year-over-year increase of 12.7% [4] - Other revenue was reported at $10.80 million, below the average estimate of $13.10 million, indicating a decline of 28% compared to the previous year [4] - Work Group revenue stood at $74.80 million, which was lower than the average estimate of $84.09 million, representing a year-over-year decrease of 17% [4] Stock Performance - Wolverine shares have returned +20% over the past month, outperforming the Zacks S&P 500 composite's +11.3% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Core Insights - Chaco, a leading sandal footwear brand, has partnered with Fishwife, a female-led tinned seafood company, to create a new sandal collaboration inspired by Fishwife's vibrant color palette [1][2][3] - The collaboration emphasizes sustainability, with Chaco using recycled materials in their manufacturing and Fishwife sourcing from sustainable fisheries [2][4] Company Overview: Chaco - Chaco, established in 1989 and a division of Wolverine Worldwide, Inc., specializes in premium outdoor footwear and is known for its repairable Z/sandals [5] - The brand's sandals are recognized for comfort and health, having received the Seal of Acceptance from the American Podiatric Medical Association [5] Company Overview: Fishwife - Fishwife, founded in December 2020, is based in Los Angeles and focuses on ethically sourced tinned seafood, aiming to popularize conservas culture in North America [6] - The company offers its products in three-packs priced between $23.99 and $32.99, and individually priced between $7.99 and $13.99 [6]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $412 million, exceeding expectations of approximately $395 million, with a year-over-year growth of over 5% on an ongoing basis and nearly 7% on a constant currency basis [9][35] - Adjusted gross margin increased to 47.3%, up 80 basis points compared to the previous year, driven by a healthier sales mix and lower promotional activity [38] - Adjusted diluted earnings per share improved from $0.05 in Q1 2024 to $0.18 in Q1 2025, above the outlook of $0.10 [38] Business Line Data and Key Metrics Changes - Saucony achieved a revenue growth of 30% year-over-year in Q1, with strong contributions from all regions and channels, particularly in North America [10][36] - Merrell's revenue grew by 13% compared to Q1 last year, with significant contributions from core product franchises [15][36] - Sweaty Betty's revenue declined by 16% in Q1, aligning with expectations, but showed improvement in gross margin due to a shift towards full-price sales [36][22] Market Data and Key Metrics Changes - The company's international business grew mid-teens year-over-year in Q1, indicating strong performance outside the U.S. [30] - U.S. retail sell-through remained strong throughout April, with similar reports from international regions [27] Company Strategy and Development Direction - The company is focused on transforming its culture and building new capabilities to compete effectively in the market [24] - Strategic investments are being made in brand momentum, with a particular emphasis on Saucony and Merrell, while also addressing challenges in the Wolverine brand and Sweaty Betty [19][21] - A diversified and nimble supply chain is being leveraged to mitigate risks associated with tariffs and to optimize product delivery [28][31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's prospects despite uncertainties in the marketplace, particularly regarding tariffs and consumer sentiment [26][49] - The decision to withdraw full-year guidance for 2025 was made due to the dynamic nature of the operating environment, but management remains confident in the current order book and DTC trends [39][40] - The company is taking a proactive approach to navigate challenges, focusing on profitability while continuing to invest in brand growth [31][44] Other Important Information - The company has initiated a search for new leadership for the work group as part of its ongoing strategic adjustments [21] - Significant investments are planned for Saucony in 2025, marking the largest investment year since its acquisition [15] Q&A Session Summary Question: Insights on Saucony and Merrell business for the full year - Management indicated that sourcing diversification efforts have reduced reliance on China, and they feel good about the momentum for 2025, with no material changes since April 2 [54][56] Question: Details on price increases to mitigate tariff impacts - Price increases were implemented strategically across brands, with mid-single digit increases for specific products, but these are not expected to fully offset tariff impacts [65][66] Question: Demand planning for the back half of the year - The company is closely monitoring consumer demand and adjusting inventory levels accordingly, with a cautious approach in certain areas while remaining bullish in others [77][79] Question: Promotional activities and margin improvements for Merrell - Management acknowledged ongoing promotional activities but emphasized efforts to reduce them, with a focus on improving gross margins over time [81][82] Question: Breakdown of international business revenue - Management directed to the investor presentation for insights on regional revenue dispersion, indicating a significant portion of revenue is generated outside the U.S. [86]

Financial Data and Key Metrics Changes - Revenue for the first quarter of fiscal 2025 was $412 million, exceeding expectations of approximately $395 million, with a year-over-year growth of over 5% on an ongoing basis and nearly 7% on a constant currency basis [34][7] - Adjusted gross margin increased to 47.3%, up 80 basis points compared to the previous year, driven by a healthier sales mix and lower promotional activity [37] - Adjusted diluted earnings per share improved from $0.05 in Q1 2024 to $0.18 in Q1 2025, surpassing the outlook of $0.10 [37] Business Line Data and Key Metrics Changes - Saucony achieved a revenue growth of 30% year-over-year in Q1, with strong contributions from all regions and channels, particularly in North America [8][35] - Merrell's revenue grew by 13% compared to Q1 last year, with significant contributions from Asia Pacific and EMEA [14][35] - Sweaty Betty's revenue declined by 16% in Q1, aligning with expectations, but showed improvement in gross margin due to a better mix of full-price sales [35][36] Market Data and Key Metrics Changes - The company's international business grew mid-teens year-over-year in Q1, indicating strong performance outside the U.S. [30] - U.S. retail sell-through remained strong throughout April, with similar positive reports from international regions [26][27] Company Strategy and Development Direction - The company is focused on transforming its culture and building new capabilities to compete effectively in the market [24] - A strategic plan is in place to mitigate the impact of tariffs, including diversifying the supply chain and implementing price adjustments [31][32] - The company aims to enhance brand positioning and reduce promotional activities to improve long-term profitability [22][80] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's prospects despite uncertainties in the marketplace, particularly regarding tariffs and consumer sentiment [25][26] - The decision to withdraw full-year guidance for 2025 was made due to the dynamic nature of the operating environment [38] - The company remains committed to investing in brand momentum while managing costs effectively [41][42] Other Important Information - The company has initiated a search for new leadership in the work group as part of its ongoing restructuring efforts [21] - Significant investments are planned for Saucony, marking the largest investment year since its acquisition [14] Q&A Session Summary Question: Insights on the order book and momentum for Saucony and Merrell - Management indicated that sourcing diversification efforts have accelerated, with expectations of sourcing from China dropping below 10% this year [54] - The order book remains strong, and there is confidence in the momentum for 2025 [55] Question: Details on price increases to mitigate tariff impacts - Price increases were implemented strategically across brands, with specific examples provided for Saucony and Merrell [64][65] - These increases are not expected to fully offset tariff impacts, necessitating additional measures [66] Question: Demand planning for the back half of the year - The company has established a new integrated business planning group to better manage inventory and demand signals [75] - There is a cautious approach to inventory management based on brand momentum and market conditions [76] Question: Promotional activities and their impact on Merrell - Management acknowledged the need to reduce promotional activities and improve gross margins, indicating a transition period [80] - The increase in Merrell's revenue was attributed to improved sell-through and a cleaner inventory position [81] Question: Breakdown of international business performance - Insights into regional revenue and unit dispersion were provided, with a focus on the significant contribution from international markets [86]

Company Performance - Wolverine World Wide (WWW) reported quarterly earnings of $0.18 per share, exceeding the Zacks Consensus Estimate of $0.11 per share, and showing an increase from $0.05 per share a year ago, representing an earnings surprise of 63.64% [1] - The company posted revenues of $412.3 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 4.29% and increasing from $394.9 million year-over-year [2] - Over the last four quarters, Wolverine has consistently surpassed consensus EPS estimates and revenue estimates [2] Stock Outlook - Wolverine shares have declined approximately 33.3% since the beginning of the year, in contrast to the S&P 500's decline of 4.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.24 on revenues of $443.98 million, and for the current fiscal year, it is $1.09 on revenues of $1.81 billion [7] Industry Context - The Shoes and Retail Apparel industry, to which Wolverine belongs, is currently ranked in the bottom 16% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Wolverine's stock performance [5]

Financial Performance - Q1 2025 - Adjusted revenue reached $412 million, a 5.5% year-over-year increase, or 6.7% on a constant currency basis[13, 42] - Adjusted gross margin improved to 47.3%, an increase of 80 basis points year-over-year[13, 42] - Adjusted EPS increased significantly by 260% year-over-year to $0.18, or 300% on a constant currency basis[13, 42] - Net debt decreased by $83 million compared to the prior year, reaching $604 million[49, 50] Full Year 2024 Performance - Adjusted revenue for FY24 was $1.75 billion[4] - Adjusted EPS for FY24 was $0.91, a 507% increase compared to FY23[4, 13] - Net debt reduced by $246 million in 2024[13] - Inventory lowered by $133 million in 2024[13] Segment Performance - Q1 2025 - Active Group revenue increased by 12.7% year-over-year to $327 million[44] - Work Group revenue decreased by 17% year-over-year to $75 million[46] Future Outlook - The company withdrew its 2025 guidance due to uncertainty around tariffs and related macro-economic conditions[52] - The company expects Q2 2025 revenue to be in the range of $440 million to $450 million, an increase of approximately 4.9% at the mid-point[53] - The company expects Q2 2025 adjusted operating margin to expand approximately 90 basis points year-over-year[53]

Revenue Performance - Total revenue for Q1 2025 was $412.3 million, representing a year-over-year increase of 4.4% compared to $394.9 million in Q1 2024[5] - Active Group revenue increased by 12.7% to $326.7 million, while Work Group revenue decreased by 17.0% to $74.8 million[5] - The company expects Q2 2025 revenue to be approximately $440 million to $450 million, indicating growth of approximately 3.7% to 6.0% compared to Q2 2024[11] - Total revenue for Q1 2025 was $412.3 million, representing a 4.4% increase from $394.9 million in Q1 2024[25] - The Active Group revenue increased by 12.7% to $330.2 million in Q1 2025, while the Work Group revenue decreased by 17.0% to $74.8 million[25] Profitability - Gross margin improved to 47.3%, up from 45.9% in the previous year, reflecting a 140 basis point increase[5] - Diluted earnings per share for Q1 2025 was $0.13, a significant improvement from a loss of $0.19 in Q1 2024, marking a 168.4% increase[5] - Net earnings for Q1 2025 were $12.2 million, a significant improvement compared to a net loss of $13.7 million in Q1 2024[23] - Operating profit for Q1 2025 was $19.7 million, resulting in an operating margin of 4.8%, compared to an operating loss of $3.1 million in Q1 2024[32] - The adjusted diluted earnings per share for Q2 2025 is projected to be in the range of $0.19 to $0.24[11] Inventory and Debt Management - Inventory at the end of Q1 2025 was $271 million, down $84 million or approximately 23.6% compared to the prior year[6] - Net debt decreased to $604 million, down $83 million or approximately 12.1% year-over-year[6] Guidance and Economic Conditions - The company has withdrawn its full-year 2025 guidance due to uncertainty around tariffs and macro-economic conditions[8] - The company expects Q2 2025 revenue guidance of $440 - $450 million, with dilutive EPS guidance of $0.17 - $0.22[36] - Adjusted operating margin for Q2 2025 is projected to be 7.2%, up from a GAAP basis of 6.7%[36] Brand Performance - Merrell and Saucony brands drove growth with revenue increases of 13.2% and 29.6%, respectively[5] Asset and Liability Management - Cash and cash equivalents decreased to $106.5 million in Q1 2025 from $169.7 million in Q1 2024[23] - Total assets decreased to $1,684.5 million in Q1 2025 from $1,853.0 million in Q1 2024[21] - Total current liabilities decreased to $551.1 million in Q1 2025 from $730.3 million in Q1 2024[21]

Group 1 - Analysts project Wolverine World Wide (WWW) will announce quarterly earnings of $0.11 per share, a 120% increase year over year [1] - Revenues are expected to reach $395.35 million, reflecting a 0.1% increase from the same quarter last year [1] - The consensus EPS estimate has been revised downward by 9.4% in the past 30 days, indicating a reassessment by covering analysts [2] Group 2 - The average prediction for 'Revenue- Active Group' is $298.16 million, showing a year-over-year change of +2.9% [5] - 'Revenue- Other' is estimated to reach $13.10 million, indicating a decline of -12.7% from the prior-year quarter [5] - 'Revenue- Work Group' is expected to be $84.09 million, reflecting a year-over-year change of -6.7% [5] Group 3 - Wolverine shares have increased by +27.8% in the past month, outperforming the Zacks S&P 500 composite's +11.5% [6] - Wolverine holds a Zacks Rank 4 (Sell), suggesting it is expected to underperform the overall market in the near term [6]