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Oct 01, 2022
Wolverine Q3 2022 Earnings Report
Wolverine Worldwide's Q3 2022 results were released, showing revenue growth but falling short of expectations due to supply chain issues and promotional activity.
Key Takeaways
Wolverine World Wide, Inc. reported an 8.6% increase in revenue for the third quarter of 2022, reaching $691.4 million. However, both revenue and profit were below expectations due to supply chain disruptions and increased promotional activity. International business showed strength, with a 33% increase to $303 million, and Merrell's brand continued its strong momentum with 39% constant currency growth.
Revenue increased by 8.6% to $691.4 million, and 12% on a constant currency basis.
International business grew strongly, up 33% to $303 million.
Merrell brand showed strong momentum, with 39% constant currency growth.
Direct-to-Consumer revenue increased by 4.5% to $160 million.
Revenue by Segment
Forward Guidance
The company anticipates revenue growth of 2% to 6% in the fourth quarter, which includes a 4% negative impact from foreign exchange rate fluctuations. A heavily promotional environment is expected, especially in North American wholesale and global DTC channels, which will put downward pressure on gross margin for the quarter. The company is prioritizing the liquidation of non-core inventory to improve its working capital position in 2023.
Positive Outlook
- Revenue is expected to be in the range of $650 million to $675 million, representing growth of approximately 2.3% to 6.2%.
- Company expects its aggressive inventory actions to position it to reduce inventory at year end versus the third quarter of 2022.
- Distribution efficiencies will allow it to more timely receive and ship products at the start of fiscal 2023.
- New brand structure and the establishment of the new Profit Improvement Office to create great value through meaningful operational efficiency and cost reductions to be recognized in 2023.
Challenges Ahead
- Foreign currency exchange rate fluctuations are expected to have approximately $28 million (or 4.4%) negative impact on fourth quarter reported growth.
- Adjusted Gross margin is expected to be approximately 38.0% compared to 42.4% in the prior year.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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