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Wolverine World Wide(WWW) - 2024 Q2 - Quarterly Results
WWWWolverine World Wide(WWW)2024-08-07 10:36
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Revenue Performance - Second quarter 2024 total revenue was 425.2million,adecreaseof27.8425.2 million, a decrease of 27.8% compared to 589.1 million in the same quarter of 2023[3] - Active Group revenue declined by 20.2% year-over-year to 305.9million,whileWorkGrouprevenuedecreasedby10.9305.9 million, while Work Group revenue decreased by 10.9% to 105.0 million[3] - The company expects full-year 2024 revenue from ongoing business to be approximately 1.71to1.71 to 1.73 billion, reflecting a decline of 14.2% to 13.2% compared to 2023[6] - Revenue for Q2 2024 was 425.2million,adecreaseof27.8425.2 million, a decrease of 27.8% compared to 589.1 million in Q2 2023[21] - Total revenue for Fiscal 2023 was 2,242.9million,withadjustmentsfordivestituresleadingtoanadjustedrevenueof2,242.9 million, with adjustments for divestitures leading to an adjusted revenue of 1,992.1 million[34] - Fiscal 2024 revenue guidance is projected between 1,714millionand1,714 million and 1,734 million, with adjusted revenue expected to be between 1,710millionand1,710 million and 1,730 million[36] - Adjusted ongoing business revenue for Fiscal 2023, excluding divestitures, was 1,992.1million[42]ProfitabilityMetrics−Grossmarginimprovedto43.11,992.1 million[42] Profitability Metrics - Gross margin improved to 43.1%, up 440 basis points from 38.7% in the prior year, attributed to lower supply chain costs and reduced promotional eCommerce sales[3] - Projected gross margin for 2024 is approximately 44.5%, an increase of 460 basis points compared to 2023[6] - Gross profit for Q2 2024 was 183.2 million, with a gross margin of 43.1%, compared to 227.8millionand38.7227.8 million and 38.7% in Q2 2023[24] - Operating profit for Q2 2024 was 29.1 million, resulting in an operating margin of 6.8%, compared to 46.1millionand7.846.1 million and 7.8% in Q2 2023[19] - Operating expenses for Fiscal 2024 Q2 were reported at 154.1 million, a decrease from 181.7millioninQ22023,reflectinga15.3181.7 million in Q2 2023, reflecting a 15.3% reduction[25] - The company reported an operating profit loss of 68.2 million for Fiscal 2023, with adjustments resulting in an operating profit of 77.8million[34]−OperatingmarginforFiscal2024isprojectedat6.077.8 million[34] - Operating margin for Fiscal 2024 is projected at 6.0% on a GAAP basis, increasing to 7.4% when adjusted[36] Earnings Per Share - Diluted earnings per share are expected to range from 0.53 to 0.63,comparedtothepreviousoutlookof0.63, compared to the previous outlook of 0.43 to 0.63[6]−DilutedEPSforFiscal2024isguidedbetween0.63[6] - Diluted EPS for Fiscal 2024 is guided between 0.53 and 0.63onaGAAPbasis,withadjustedEPSexpectedtobebetween0.63 on a GAAP basis, with adjusted EPS expected to be between 0.75 and 0.85[36]−DilutedEPSforFiscal2024Q2was0.85[36] - Diluted EPS for Fiscal 2024 Q2 was 0.17, a decline from 0.30inQ22023,withadjustedEPSonaconstantcurrencybasisat0.30 in Q2 2023, with adjusted EPS on a constant currency basis at 0.16[28] Debt and Cash Management - Net debt at the end of the quarter was 666million,down666 million, down 271 million from the previous year[4] - The company plans to reduce net debt to approximately 565millionbyyear−end,areductionof565 million by year-end, a reduction of 175 million from the prior year[6] - Cash and cash equivalents at the end of Q2 2024 were 148.3million,adecreasefrom148.3 million, a decrease from 176.5 million at the end of Q2 2023[17] Inventory Management - Inventory at the end of the quarter was 297.1million,downapproximately54.1297.1 million, down approximately 54.1% from the prior year[4] - Inventory for Q2 2024 was reported at 297.1 million, down from 647.9millioninQ22023,indicatingasignificantreductionininventorylevels[30]TaxandLiabilities−Thecompanyreportedaneffectivetaxrateof13.1647.9 million in Q2 2023, indicating a significant reduction in inventory levels[30] Tax and Liabilities - The company reported an effective tax rate of 13.1% for Q2 2024, compared to 19.8% in Q2 2023[19] - Total current liabilities decreased to 665.6 million as of June 29, 2024, from 964.2millionasofJuly1,2023[17]FutureOutlookandStrategicInitiatives−Thecompanyplanstofocusonmarketexpansionandnewproductdevelopmenttodrivefuturegrowth[22]−ThecompanyplanstoclosetheSperrybusinessandstoresthatwerenotdivestedin2024,impactingfinancialresults[38]−ThecompanyistransitioningMerrellandSauconyKidstoalicensingmodelin2024aspartofitsbusinessmodelchanges[42]EnvironmentalandOtherCosts−EnvironmentalandrelatedcostsforQ22024amountedto964.2 million as of July 1, 2023[17] Future Outlook and Strategic Initiatives - The company plans to focus on market expansion and new product development to drive future growth[22] - The company plans to close the Sperry business and stores that were not divested in 2024, impacting financial results[38] - The company is transitioning Merrell and Saucony Kids to a licensing model in 2024 as part of its business model changes[42] Environmental and Other Costs - Environmental and related costs for Q2 2024 amounted to 15.7 million, impacting overall profitability[27] - The impact of divestitures on revenue for Q2 2024 included 0.4millionfromtheSperrybusiness,totaling0.4 million from the Sperry business, totaling 4.5 million year-to-date[32] - The company experienced a net earnings per share impact of (0.11)duetodivestituresin2023[32]−AdjustmentsforQ22024included(0.11) due to divestitures in 2023[32] - Adjustments for Q2 2024 included 3.5 million related to divestitures, affecting the overall operating margin[27] Asset Management - Total assets decreased to 1,796.3millionasofJune29,2024,downfrom1,796.3 million as of June 29, 2024, down from 2,357.3 million as of July 1, 2023[17] - The company experienced a net cash used in operating activities of $(10.5) million for the year-to-date period ending June 29, 2024[19]