Wolverine World Wide(US:WWW)2025-11-05 14:30Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $470 million, exceeding the guidance midpoint of $455 million, representing a 7% increase year-over-year [27][28] - Adjusted earnings per share (EPS) grew 29% to $0.36 compared to $0.28 in the prior year, reflecting disciplined execution and improved profitability [31][32] - Consolidated gross margin increased to 47.5%, up 240 basis points year-over-year, driven by product cost savings and lower promotional activity [31][32] Business Line Data and Key Metrics Changes - Saucony revenue increased by 27% in Q3, driven by strong growth in both performance run and lifestyle categories [29][30] - Merrell revenue grew by 5%, supported by market share gains in the hike category and strong sell-through at key accounts [30][17] - Sweaty Betty's revenue declined by 4%, but this was better than expected as the brand executed a clear strategy to reset its business [30][20] Market Data and Key Metrics Changes - Global wholesale revenue increased by 11%, with international wholesale up mid-teens and US wholesale up mid-single digits [28] - Direct-to-consumer (DTC) revenue declined by 5%, primarily due to lower promotional activity in the US, partially offset by international growth [28][30] - The Asia-Pacific region is expected to be the fastest-growing market for Saucony, with significant expansion plans in China [15][16] Company Strategy and Development Direction - The company aims to continue scaling its two largest brands, Merrell and Saucony, which are expected to represent nearly two-thirds of total revenue in 2025 [6][9] - A focus on responsible brand management and reducing promotional activity is emphasized to enhance brand positioning and sell-through rates [40] - The company is investing in product innovation and marketing to strengthen its brand portfolio and drive long-term growth [40][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategy and path forward, despite challenges in the Workgroup segment [27][35] - The company anticipates revenue growth of approximately 6% for fiscal year 2025, with adjusted EPS expected to increase by about 50% compared to 2024 [9][34] - Management acknowledged the dynamic macro environment and evolving consumer preferences, emphasizing the need for agility and responsiveness [39][40] Other Important Information - The company changed its accounting policy for inventory from LIFO to FIFO, aligning all warehouse inventory under a consistent policy [4] - The impact of tariffs is being managed effectively, with expectations to offset the majority of unmitigated impacts in 2025 [33][34] Q&A Session Summary Question: Contribution of new distribution to Saucony's growth - Management indicated that about a third of Saucony's growth in the quarter came from new distribution [44] Question: Balance between lifestyle and performance footwear - Management noted that lifestyle footwear is growing faster than performance, but both segments are gaining share [46] Question: Expectations for Saucony's door count in 2026 - Management anticipates an increase in door count for Saucony in the first half of 2026, with a focus on responsible brand management [50][58] Question: Sell-through rates and performance by gender - Management reported strong performance in women's and kids' categories, with men's also performing well [87][90] Question: Merrell's distribution evolution - Management stated that Merrell's new door expansion will not be as aggressive as Saucony's, focusing instead on evolving existing distribution [96]