Wolverine World Wide (WWW) 8 Nov 172017 Q3 Earnings call transcript

Good morning, and welcome to Wolverine World Wide's Third Quarter 2017 Conference Call. All participants will be in a listen-only mode until the question-and-answer session of the conference call. This call is being recorded at the request of Wolverine World Wide. If anyone has any objections, you may disconnect at this time. I would now like to introduce Mr. President for Vice World Senior Hufnagel, of Wolverine Strategy Wide. Chris Mr. may proceed. you Hufnagel,

Thank to and XXXX morning, you, Good Drew. welcome conference our call. quarter third

viewed Chief or our and The on On our Officer at Financial Vice of from Officer. call today XXXX. morning, Blake release can for Chief our the many wolverineworldwide.com. we the this announced quarter are President and available and results website news Stornant, Mike Chairman, President; be Earlier our financial sites Senior is corporate Krueger, Executive third

our of If you accessible posted Webcast reconcile that non-GAAP copy entitled a earnings today's XXX-XXX-XXXX. website, is document link disclosures of on Tyler release within disclosures QX is clicking news top the include non-GAAP tab Relations the This at wolverineworldwide.com, Tables will directly, non-GAAP the call disclosures. page. these corporate body There with Supplemental and by Conference at of disclosures, you please the will our on additional release. would prefer reconciled at XXXX Comments Deur under included a Investor website sent tables corporate were to the The Call during release GAAP. some these morning's the document press WWW attached call the to

over Before on our to and information. some call Blake turning results, the provide comment to context I wanted additional to

from fiscal quarter first speaking fiscal quarter three businesses performing adjusts first impact underlying Cushe primarily XX- company's quarter and earnings the closures, fiscal to for our We any global underlying store XX-week versus call, reflects the the the brand quarter growth revenue, during quarter foreign in and for revenue When or to XX-week exited licensing fourth for are operations, and quarters three XX-week revenue, of communicated of a and Mike the marketplace. exchange, a refer and the of best Rite to prior XX-week is excludes the how Blake Stride As the comprised or will additional week XXXX. company's XXXX business. of quarters the XX- which year believe fourth

results, divestitures, related addition, be costs, includes of through results, In will exclude incremental constant which non-recurring the adjusted of restructuring the impairment of currency transformation the week organizational which XXX stores costs, additional XXXX markdowns providing the and quarter to second and operations. closed impact we financial

regarding its tables and that also You these I'd you U.S. disclosures release operations our on remind during like can reconciling in projections forward-looking earnings predictions and our statements laws. are and corporate Wolverine to Worldwide conference call under made find today's website. securities

are that, that a in differ materially. prediction the we filings the that our SEC number As to could With or Blake? call These any being factors factors you projection, are like Blake result, to must Krueger. cause turn results there a in company's said, press with risk and caution releases. identified to as important of over I'd

currency focused momentum the quarter last year This margin XX% over third adjusted over results for Chris. for our morning, we has representing operating underlying attention revenue share continuing constant X.X% These of on second goal. to $XXX the $X.XX. first our quarter, interim thanks Thanks, the represents everyone, growth million, of of joining pleased the see from earnings and exceeded quarter to our this and Earlier Much consecutive morning, reported we were underlying half the QX. of year in the us. per growth. of Good expectations been of

focused innovation WAY transformation increase brands the which and flow to initiative, been of the FORWARD, very is Our our ahead wide is here on put also We've of has our good holistic enterprise speed and plan. considerable company into the WOLVERINE evolving progress effort and and growth. strategic

more growth become all intensifying the sustained to and organic evolving category consumer-centric, the delivering new environment. innovation strengthening with and efforts are pipeline, of geographic the around in and our goal our company expansion normal product and We retail consumer global

We revenue of these quarters. reflected of the performance momentum the in efforts last are pleased progress our business. couple WOLVERINE better-than-expected FORWARD the just transformation results for We're our the see with WAY in and beginning the to on obviously

the third today's will and the results, operational Group. Mike around our of quarter a posting Merrell updated performance improvement up grew and then call, the on update For growth, our groups to the provide Cat strong FORWARD. our outlook in starting performance, every provide Chaco growth, slightly, double-digit digit. and Underlying world. in-depth Outdoor prior quarter for with on down from brand revenue Puppies group's business I'll & a very additional brand Stornant solid mid-single digit Reviewing with compared high-single region XXXX. Hush Merrell X.X% saw The remainder WAY growth touch the broad-based our on WOLVERINE then Wolverine detail Lifestyle year more the the delivering of financial

in second for with quarter. Our over digital continue also business the consecutive to XX% investments drive result, e-commerce up merrell.com robust and the

which previously our digits When the business, the FORWARD grew Moab by territories: to sometimes mid-single gym; hike, primarily the viewed describe five Lifestyle. in which returned Encouragingly, core and quarter, brand life; nature's Active work, of Performance Nature's prior Tactical was expect lifestyle used digits. to brand the we initiatives through launch categories, continued up WAY the ramp double-digit active consumer outdoor growth growth, driven our quarter part performance fueled category as cross its in initiative, over urban the trail; product-driven descriptive can distinct collection. another As on the to Gym is categories Merrell's of product Chaco business, product outdoor and the X focused category across part QX. and Outdoor the we saw e-commerce the into its during and fueled which growth we Overall, double quarter. territory, grew momentum to program build Work this five-consumer this in in success by XX%. strong Canada the product line particular in and quarter, with up Merrell The offering, a strength men's

digit in better product the to to down the in the product in with boat the the The to revenue continue markets. digit, Saucony its as a realignment Saltwater Boston casual franchise premium year-to-date distribution vulcanized Collection. strategic mid-single and Sperry start Asia implement boot than footwear anticipated category and Group. is exceeded XX%. X.X% up The Wolverine brands shoes over down Cup the outside the Sperry brand performed diversify site offerings efforts for versus to the grew brand quarter. its Both with quarter entering women's up a to as Latin Sperry plan. continued year, up digit, the the group sell-through Boot revenue XX% Sperry a consumer and e-com accelerate this And performed mid-single sales Sperry All with as the footwear for offerings expanding very high-single of Moving America strong category, and Gold Keds double-digit responded on Pacific favorably expectations team as and pace declined Underlying own well Sperry strong boot to offering. well. at has our off prior

including world. guide, North brand becoming core to quarter, in delivered Heritage gain by to the digit line franchises, American closing the ISO, and the growth product driven a The technology and running across cohesion award-winning businesses. Turning Core the drove the continues Saucony Saucony. from wholesale the growth its in increase. with Freedom revenue e-commerce system and mid-single cushioning around the The advocates Group. is In proprietary EVERUN Wolverine double-digit

comprised digit and Momentum was the and group underlying nearly up teams; WOLVERINE was in WAY four our Excluding (XX:XX): sold strength FORWARD to portfolio businesses, on new posting was as Coast growth; in is well. brand also revenue in people very the strong despite the compared and to business for our product over XX%. Bates West FORWARD the retail year, provide double-digit. up have sell-through the of and and during introductions our transition new WAY WOLVERINE accounts a innovation brief now with Harley-Davidson its double-digit key both up Sell-in Wolverine Department and low-single transformation. of excellence; quarter, Defense product transition quarter, the distribution brand update commercial of The was core mid-single growth. the I'll up and across mid-quarter prior key grew business, operational center Wolverine management. which especially apparel X% digit HYTEST work performed continued with robust The strong and e-commerce link

work we of in started Our the as and team our half has and the been moving with execute incredible pace transformation, back on critical from benefits to year. this harvest urgency this we

the Our drive in us future confidence investments and strong beyond. our remainder accelerate growth XXXX in of year year-to-date performance execution to meaningful enable and should to for the

expanded aligning finally, brands on position key growth all correctly. against is to initiatives, with will our growth certain in well connections stronger consumer in We in our today. more players team our retailers capabilities lead the significantly and enable and consumers infrastructure our retailers engage deepened the deepen to and speed and first-ever reduce transformation and On believe our The and than to market the obsessed concept-to-market become I continue in market and front, our distribution to continue drive we've digital Wisdom, digital programs. to exposure has better insights social our who the wins, unified global by times prioritized we proactively brands consumer investing with that both brand and members growth us focused in understand with database, We've goals. efforts We've product talent by e-commerce portfolio. growth important U.S. to team and new and leveraged never existing And for the been best channels better intelligence. We've and teams investments and it consumers. our most initiative team across company's perform analytics reduced our to consumer our

did is objectives, meet On the and addressed to believe what We've biggest less resources agile more we've more time, complicated. on and strides operational tremendous long-term strategic organization highest allowing the financial our businesses that us we energy or opportunity. are efficient, our front, our not ensure focus valued and to made

a drove during the us more I now that Defense in our medicine cost with QX, offense. are goal. out allowing we've go-forward portfolio of executed closed in excellence, Specifically, more we've good margin largely a the I us. the distribution and and the Sebago brand These this profitable and business. production confident critical as rigorous vendor efficiency original Stride to more U.S. company. with focus have the management on achieve foundation contract enforcement completed our are our strategy. productivity FORWARD the were improvements after target in in made ways, of we profitable on XX% and and The transformation, We're to front sale Rite subpar XX position operational operating map energy consolidated is expected a a for reduction we're by our it couldn't will business. of believe of WAY fast-growing, further enterprise. well speed-to-market improved in our will through finally, We a highly factory we've behind to we protected invest tough base. us. And focusing through brands to e-commerce we costing fleet accomplishments very think We've and domestic front global the I year us growth our licensing the SKU our many leaving in Department comprehensive including our the across additional allow faster, on marketplace around we profitable more progress transformation. stores, brand, our this to We sale stable established company's be us, product the the pleased and many opportunities year, now ahead with now In stores, innovation of some that of the stronger, closures of relates in recent to initiatives pivot

quarter, into the With addition the benefits over the drive on our now Mike call the profit Vice that, Officer, expect Stornant, Mike? WOLVERINE improved commentary I'll results, our in WAY brand Financial the provide our sustained we for will turn very that to as meaningful growth. details provide capacity the expectations and year. more performance regarding specific Senior well who'll of FORWARD as provide In investments Chief to President to initiatives balance additional for

the Thanks of us today. Thanks, on Blake. joining you to all for call

excellence the in were better quarter as underlying consecutive that delivered persistent schedule. operational retail expect some that the our financial market. challenges and second proactive position benefits been excited brief a normal. we WOLVERINE But to from benefits ago financial opportunities the on quarter of to of the reflects third expected from had the despite and in results we approach have QX global we our initiatives review we've I'm acute achieved started provide growth the especially U.S. the transformation. than Year-to-date, compete future our Our initiated share FORWARD XXXX first, executed new WAY in months company this XX portfolio our I'll results. transformation and we can to This of

Third brands particularly saw quarter. of met $XXX.X e-comm than entering especially million plans in We delivered quarter results. better were strong momentum good or revenue expected, pleased most exceeded as revenue Merrell from quarter the was portfolio in and Saucony, with the and the both and global growth their

We transformation completed did well months. the that in With of global Department late a the to forward business grow our initiatives. job a this are of portfolio matter of completing our quarter, a portfolio in we great of move of of positioned strong divestiture contract team The believe brands XXXX. with we Defense in work our management portion

million and $XX.X Working our were in share abnormally store to than the And key store of $X.X due gross last despite benefits, inventory $XXX of the reported, couple of Including a and for Adjusted adjusting certain currency cost capital XX-basis incurred XX.X% operating basis strong these results nonrecurring store margin XX.X% to has which incentive lower The year costs, been performance which mix $X.XX, were represent the to recognized of cost million healthier efforts Adjusted been brand prior a portfolio year mix the that inventory This pension recently an margin As the of the prior down incurred over over a in have quarter. earnings for and of $X.XX, currency margin Accelerated quarter last revenue cost changes fourth were point $XX noncash. XXX will than gross operating impact end and These better quarter, QX normally share and higher basis execute $X.XX. of benefited the compensation We points reoccur third XXXX from product was the of is the the costs and per At closures XXX compared would management share contributed offset reported rate per in nearly quarter. basis than from on quarter. more XX% incurred in and impressive. basis tax improvements very negative improvements implement XXXX. a timing to company costs earnings improved days. diluted Adjusted closures next gross $X.XX. markdown of inventory adjusted items stronger to year, on earnings to resulting discrete points further during all currency the be million days other that the were activities. exposure is constant constant not and and related compares closures. sales XX transformation better QX, priority years. were the approximately million margin year. discrete transformation the per low of

on including a We execute productivity. well initiatives, continue on new inventory focus SKU efficiency to management and

our at relatively addition, clean entering important inventory season. is the pipeline holiday In selling retail

our Our and priorities drive pay debt; down global engagement, product organic return cash repurchases investments value-enhancing remain consistent for growth, through through pursue shareholders and innovation, to the primarily e-commerce share value distribution dividends; consumer acquisitions. initiatives; same: in expanded and

million During we shares repurchased for million. the X.X quarter, over approximately $XX

$XXX our million recent under repurchase approximately have We most plan. stock available

generating the of into run operating practical then, At XXXX, marketplace XX% map a began drive we our worked FORWARD. the launched strengthen the the to by In like margin transforming we aggressive then the normal. in additional that shared XX% interim early improve benefits our we of meaningful end it firm fundamentals operating eliminating mounting, of focused November this for XXXX, goal portfolio while low-growth cash improvements a and some to and for ground challenges initiated proactively that were an improvement These global foreseeable and In company. We WAY of business losses be initiatives But XXXX. stores underperforming to from the strong been new a has progress the provide are foundation and profile and the WOLVERINE improve that profit flow. In transformation March model set XXXX, margin. reducing the very in stake and that made and even actions rate April I'd future, improving mentioned from we operating Now regarding global achieve step goals. time, bolder our towards we our Blake the our on in of of put operational a have of adjusted operating assumed develop team year, infrastructure. pursue of we we achieving the we publicly. supply costs, road chain excellence operating a margin to to Since took would our of our insight operating our beyond the work. harvesting go took has operational our fundamentally, to environment position

and brand growth of last encouraging, enhancing and original goals. of on schedule. the our by proud for identified global for over past to over infrastructure, of innovation the and line to the profit focus, organizational progress SKU chain, deliver to FORWARD us the also product capacity XXXX, interim with months accelerated has very work, margin our especially our and profit opportunities now e-commerce deliver channels: While now of structure. incremental give sight will Even remain over ahead has I'm we've the growth encouraged primary efficiency baskets, coupled opportunity our growing additional full $XX and fastest XX XX% WAY international. key These that made timing XXXX meaningful support year digital more our invest across related portfolio, supply company engineering, the capabilities incrementally operating to within the million core initiatives in our

Our team has has outperformed. assignment and successfully taken out a tough

are you results on would our three We good what doing I XXXX year With behind do. said us, outlook. quarters of update we would like to full we

key operating adjusted of XX.X% year the resulting improvement currency the We company for $XXX are top FORWARD, growth reported fiscal WOLVERINE of result of an year to billion. over store and Full performance of range. in range billion The at range now and revenue and the $X.XX margin a early and the assumptions revenue upper expected XX.X%, by recent to year is narrowing by two benefits last including the million the incentive of in underlying year, in end expect our from XXXX despite to years, of actions our $X.XX end impact $XX revenue XXX updated closures outlook portfolio, the million, to the again, incremental in benefits taken compensation. basis range top cost the WAY strong of to last changes full the X.X% are our at XXXX end expected points related range. The the pension of approximately the of is prior over

We expect shares XXXX net outstanding. diluted weighted million, expenses million $XX and interest average and approximately $XX other of approximately

$X.XX to share currency the As basis, share. a impact per XXXX are expected the expected per now year range per negative foreign diluted of in includes $X.XX $X.XX, XX%. to growth to are of On adjusted constant earnings earnings XX% be of $X.XX fiscal in approximately adjusted share the result, a to full of from $X.XX, currency which range

the million XXXX. initiatives transformation costs of with strategic will nearly Our $XXX discrete related of store efforts million include to closures. approximately $XX end continue These through

for range are earnings Given the $X.XX. in per to the expected of reported $X.XX these year adjustments, share now

the company business. Associates to done our have from on promise improve of delivering job every of the an fundamentals amazing the part

our brands strong Our including diversified excellent continue in e-commerce progress strong, double-digit brand and is growth the portfolio our to make on biggest front, growth business.

and Our our of operating advantages. partners than remains our strategic one platforms ever, network stronger key are of global

morning. our position growth, are line return we are believe top generate value your persist, about for shareholders. Thanks headwinds this time earnings innovation and we macro healthy cash and enthused to growth, and our poised accelerate deliver flow to Although

now Operator? will operator. call this We to back the turn

now the will begin We question-and-answer session.

Duffy question Jim first Please comes Stifel. The from go of ahead.

Good guys. morning, you. Thank

Good morning, Jim.

investigation I hoping a questions. of hope Where you start, how preliminary comment you're former date? on this your investigation contamination to can are Are I'm have locations. for the And you own expenses well. liabilities you handful guys on at in into do any environmental this? to of and any potential you future To there tannery the I that? thoughts have might related reserve

Yeah.

as this possible, keep as me Let short Jim.

know, XXX than manufactured of for in in West have a we we that you and used no businesses in a Scotchgard of leather from operated of XM other the of years. for number We really other difference XXXX Michigan tannery As around a years, we used closed Scotchgard. that portion consumers thousands millions

a a pervasive of they're XM's learned this foam, would years. now, regulated guess, water State of this PFAS, our science from I emerging years, in I any including environment. P-F-A-S. And contaminant. remains was three family stain It said of get in for environmental be some health is studied PFAS, fast-food microwave not firefighting Michigan that For right considered, and products inconclusive. people carpets, substance have the or not industrial study into it's treatment, U.S. over But popcorn, won't One wrappers, number consumer body. contained drinking well It's the It's the of used XX% for term impacts, that Scotchgard their over a decades. This host in the we've an of – most or just in and chemicals. best water-resistant the stain-proof and chemical uncertain states. of still behind been about

very the conservative. they've drinking advisory One has called irrespective only. issued So a issued But advisory water level a water EPA that, in of XXXX. expert drinking the

sites. PFAS around disposal the groundwater have detected We in tannery several

a a non-detect transparent. very be neighbors, supplied and their are people sources might that conservative local and Frankly, We've proactive working even these have conservative possible and been closely water of company, proactive to house. our we've and As as and a point in agencies. our alternative We're all approach. taken affected that or we've our and state families, as friends our of with from people view,

think, the on And the some reporting been the local of irresponsible reporting I some sensationalized. local local fair. this, been has has of and But reporting

a and the some by them proactive that relieve safe make of calm, water taking we're to more reasoned to So anxiety everybody's considered sure exists. approach drinking is

far as As cost?

Yeah. The $X.X in on proactively cost that third again, in QX, Jim, work very based of kind expenses done, about we've quarter. all out-of-pocket were million the the

we've really as and research appropriate residents mitigation, know. as up Blake the with where conservative. public As and and on we another the we learn fourth impact, that's $X about taking action, million relatively spend we do incorporated engaging to continue keeping here, very can. here. to $X this, them speed to guess, We million the said, to opportunities engaging the don't And I look for quarter, in expecting public more about learned we mitigate other things to guidance probably been work on with proactive with But residents any as the to we're into really that's

right So of impact to extent that's the now. sight that financial line of have we the

sounds appreciate delicate quarter? Can couple of It the questioning, the international I perspective. third situation. a speak to businesses the other growth in may. direct-to-consumer you Thanks. if of and the like A lines I Okay. of the

was XX% business e-comm our for nice high a Yeah. the We growth our business saw teens, in nearly quarter. e-comm – very

the everything footing. go-forward closure the of the continue and kind reposition Our work down continue we else. But through to are scenarios fleet stores stores obviously store on were and store good as to slightly

you the end As going year with fleet XXXX. stores owned about we're to retail the entering know, in XX into

So our good. DTC business was

slightly every region, better was in really EMEA saw Latin And frankly. On in growth the international we side, expected but the strong for quarter America. down than a

also and really some to it between saw some with our most business timing But of respect QX. to We in Pac. Asia QX shifts declines frankly due

plan QX better our the not stronger to than for a regions. plan and international on be overall, So across expect if little bit business

the of which I positive a positive. A but quarters. time the was growth the less in of the than performance that would positive quarter say, (XX:XX) one little in for overall, X% was U.S. number first Jim,

in our which up the from was including core in Yes, U.S. the brands, over Merrell, X% quarter.

Last margins. one on for the me Great.

tracking objectives. in investment continue ask I on to are to guys with margin the XXXX very drive and You to beyond, to business? that of you balances can then opportunities how suppose, nicely Mike, important in comment I and areas

Yes.

able that little I we've initiatives Jim, last of benefit A than started middle we the just to a bit lot think, as been from year. we'd earlier you of know, planned, originally than the of inventories expected. the a momentum the in in and a little It's way year. earlier gained of the has frankly because just sort improvement of bit business that we earlier

work that carrying over kind having kind supply So a coming we benefits chain crystallized I another the from through to of would XX%, been of into XXXX. say into XX% early that helpful. certainly over has standpoint, came XX% XXXX with of fruition

of with And future. the from a transformation partners more some the easier row our so through work our to behind chain past. them in I the of We're negotiate over we're as spending value we've business, much partners to suppliers we've comments, the because continuing consolidate our spill done, to work and little hoe that's a and simplifying the in time us. mean, supply have continued as our continuing to already the my mentioned factories. we'll an in that frankly, We're complexities given I giving handed source creation look at So we've primary

forward. done model the we've margin that FORWARD. and going businesses of we've kind have some divestitures some through were us of for then and and So focus lower-profit portfolio additional that on part year some and gross uncovered WAY And lower-margin the eliminated changes helped just chain next of benefits margin supply operating

like we So the there. momentum

meaningful in as made We a year progress those expect things. improvement next result to gross on see of some we've margin

at it leave that. you. I'll Great. Thank

Thanks, Jim.

ahead. comes go question of from next Yruma Please Capital The Markets. Ed KeyBanc

consumer core for guess, cycle? taking to the to responded of of of the And the start When we are product? we the guys. quarters should see to some organic starting product growth, kind I guess, that? how Hi, new development Thanks Two of this I faster question. has some see benefits of

that say and already you've programs on benefits the beginning. several brand. your And would your see this just speed. you protect But to I Maybe focus the that. got brand police started of in to Yeah. today's environment, very of we've got to and in

to But product dialogue steady you have marketing segmented consumer. stream of that strategy. You the with have a fundamentally, a a got need stories distribution

so the So growth and primary want our been that as front, been soon it that's can they Retailers something innovation and focus. has do get new on as consumers. – our fresh and

Got it.

we're some sort And I think Merrell model been really, when our key They've comes and about WAY on it's product. initiatives pilot early so from some think more adopters and our certainly of a is the robust brand example. new benefiting you of the of new to growth these year a this ways and perfect the Merrell, through of speed-to-market pipeline growth it just business approaching when FORWARD, initiatives. of of from some

Got for two quick it. me. ones Maybe housekeeping other

of potential First, line And and some that then just restructuring tannery bit confirming talked that contamination. you. cost for the liability dumpsite? little guess cost cost, of that there. kind trying any maybe a understand other for to a Was cash or the than may legal of finally, from clarity was I'm you other or I fourth the cash Thank just the And that's reserved flow, you guess that that stem there cleanup kind have at I quarter? about

all some the that for now the way. of be disposed related specifically right have we'll been That's many may byproducts talking were that area sites accruing impacted. any concerns years cost No referring the the that lawsuits to of mitigation – And residents to about are any we're by of, ago, active yeah, for. where that in we're

The closed XXXX, perspective. site landfill primary put in to a in was everything that state-regulated site was

in statement? line other the And the flow cash

That's a few and of combination restructuring other of but those some costs significant. a small nothing items

Great. much. so Thanks

Sure.

The next Jonathan ahead. Please go of question comes from Baird. Komp

to key type Yeah, quarter wanted ask and to maybe drivers the hi, the growth, thank assuming what look some to revenue of you get in you. to terms just wanted of of underlying brand I fourth there? you're the I when growth clarify

off of QX. pressure to with quarter. comfortable was some We're in QX Yeah. obviously, and the the still I take confident strong mean, our the performance helpful of

sort October. hit the that and both QX. of of until the terms Cham to really of driver introduction acceleration mid-single-digit didn't work their also Merrell really And business. be that the their of growth then to new for in low A X big We going market product for is expect underlying Merrell's

So Merrell organic double-digit good is strong expected But us to level delivering have high that confidence good quarter a results, the we're fundamentally, performance which gives very seeing portfolio, of growth. across in growth in QX.

organic single about that into talked mid get XXXX getting how to target you Okay, you up great. geographic in digits? about, building performance and you've mid towards growth kind more terms that the And about do then revenue to think of single-digit to when think and of channel

the first of I in Well, e-commerce in accelerated international it's in – own our the growth many think, all, business. international space, like in and our people and regions DTC

time. of at also But robust those fundamentals As of the about excite our States. the the many to our brand consumer. product-marketing which goes would outside I that is of current the very it pairs XX% markets are are initiatives marketed across portfolio, back you know, think United And

quarters next hard we've what of momentum irrespective or which some to those to the worked market. speed be increase Certainly, year, three like. the the flow able so also here two of deliver comfort in gives XXXX and And is environment increase macro to we're to having that us going hit the at

think already last last improvements, I Okay, the Maybe disclosure margin me, if XX% week one with And great. on Mike, it you And the opportunities. then imply are no XXXX just how going I'm close be level but you're about gave kind in thinking follow-up that to you're of just on additional I'm curious you correct side. pretty would new to identify the conservatism that. like not margin hitting continue operating XX% in year. of sounds next tracking wrong, to embedded

be remark, mid reinvestment XXXX. critical right, accelerate that It's going growth kind last pro have my to Yeah. mean terms you're strategy, but mentioned thing information that of on spot in support really would XXXX the we I what just in really underscore, to think that which beyond we as I I forma to not for said. And is of single-digit the targets provided indicate week, other a to XXXX. for you

initiatives and really also for which the opportunity invest the into so margin assumption. our kind the operating key infrastructure, in of And business meaningfully is over deliver to and target that us on into embedded in XX% and

important that's think to year. about next an thinking I be component the way of

okay. right, All Thank you very much.

Sure.

The next Kummetz from Pivotal question of Mitch comes Research. go Please ahead.

I them. Yeah, thanks questions. I of guess a my taking few have for

see. let's So

delivered bit. and your did of And the low-end a comes guide on On range of by kind pretty take but like quarter it kind the up QX the revenue little the amount of you does a appear earnings. you it default down quarter, over substantial like looks

or on and coming quarter? So I'm we fourth like, shifts you just are a default to conservative there are do kind business down the QX think just of drove what why guys being wondering the that, upside, in about How to any bit? speak if the is more

brought a fourth little be here in with happen. we've fundamentally, quarter. very an comfortable planned. obviously, I quarter. pretty certainly that the to I had And a were position distributors we retail do we're to was There's we earlier position with guidance than brands a in has some – QX more there. at fact products, put business ship mean, momentum globally now. of guidance customers And inventory an practical the I and there maybe was that we'd and good or strong. in a our were the and kind cautious the We out the we little appetite the provided But relatively over say our stayed we're and them of we the it's we had a our certainly make lot of when than in given. with for be more right think the the would would market inventories But I the think dynamic had to buy probably I comfortable would to Mitch, say originally early. they pleased, little that the kind our to news business support mean, a goods open We and when I still the third were guidance timing done that – were ago. that of a good really a quarter of maybe delivery

was of finger talked warm your does the I a pretty weather looking warm cancellations? the sort you any You a quarter kind kind pretty the weather in Like mean, is of that of of terms lead fourth schedule, November inventory that on standpoint. impact season do in And put good does kind about is October good walk some weather weird of about did to the retailers And retail. can get a do of behind weather ago. for cancels, channel time through just U.S., turning thoughts was think inventory like really is a when the all itchy trigger that really like of hits the warm kind all then and like the you how if now left you cold like expecting year that's at against but and in there just the retailers how that? we're guys, business? your from what because

businesses than central as our rest on really a some not down excuse country weather the We probably impact of I had seeing again, And impact bit. asked. in normal. know in but significant helped we've here Probably I'd weather. result some has we weather underlying of or much had storms a markets, shifts and business the us. swore Well, little That's as not the conditions. normal upper our helped of in a warmer never It has been those you hurricanes mid-west of South boot use any frankly. an since an we're the But know little

the Mitch, don't or us, to I I of upside business, the the warm in – a I retailers impact to mean we your obviously, typically unseasonably I think where good. it's mean downside. good have weather it's going terms in on from important fourth come our out, we we read retailers But would weather never most if them. don't factor but on either size to That's any have for major business or pretty remains the And way But in whatever. specific quarter. think point,

lifestyle is now that? side? And point business kind hit that? sustainable, lifestyle that of does And drive was can And it. said mentioned and talk active the too that's double what you Got you a you heard that digits, on was you Merrell men's if could that around like women's coming Blake about bit active an sort inflection If I drove case, the of in if up then think think you little growth I the that you correctly.

there Merrell ourselves Yeah. can team old brand we're focused categories some some coming of and five really territories the And product five describe under and wean regions across on performance under women's off quarter. The around performance, that up entire we're digits territories, the still new well casual but pretty slower. trying side uptick definition, line, is men's had as old Merrell tube was to on to to across We we Women's of some the The our But drive active in much as the the some lifestyle side. business, know the consumer footwear focus improved. And growth. those double more in new be pleased. viewed old can in the the down is were definitions. yeah, really was seeing an as be

All right. guys. Good Got Thanks luck. it.

Mitch. Thanks,

The next Chris comes from go of Wedbush. question Svezia Please ahead.

thanks questions. about Good the getting first mid talked past – for I single-digit growth just guess, morning in taking on in the organic XXXX. and my to everyone Blake, you've

curious you relative Just guess, been, to far about XXXX. how what's that feel so in underlying I outperformance

some softly is Sperry? brands these kind you feel maybe takes think want of – I Chaco, first, rank if more think about walk through about to should going you could we about Just we it you color on Merrell, the and into some or about and of of any XXXX? confident So just puts how talk how that,

Yes.

growth really looking portfolio. the across at we're Next year,

at a portfolio are brands more like to but few bit across grow – that smaller the portfolio. have have annuities in a We we're as growth brands our opposed stock, our looking of some

business, serve our which delivery international bit of confidence conditions good the in Our has about really here momentum We international retail has feel the be on going quarters for years. XXXX in business serve three helped built the over to now. what's of our helped XXXX. of couple U.S., is Despite in a and a

our is sight by line product initiatives are forward place. – and internal great a Our brand. to of marketing e-commerce brought then, it's bringing business fundamentally, the each portfolio growing across at the And product that

on more So we But any we of things give in now have normal factored quarters overall here us macro the ago. have a we confidence for new improvement sure. number level in consumer in that or States a the than had the retail couple that not United conditions even of

Okay. puts woods talked deep to into guess, don't but revenues, takes some you given want too EBIT you've on Mike, for about and you here you. the XXXX I go and know And I margin.

that the call some in we're to X% out so of if imply, million, you're take about is the there this organic about but when Just roughly not? you anything X% all business we Are it, revenues $XXX the and that we're down we in ballpark baseline thinking else as thinking next sort correctly? Or should a year. think growth of or for correctly, – about about

disclosure kind we and next of thinking behind rates store the specific hopefully provided right else. a was help, would and give I numbers. – a everybody are plenty changes again, it that's closures year, And without now us, baseline be the generally, I about last right, year. the or this to everything think giving that portfolio behind to of we're But week mean, there for way I that's think any

Okay. Final two things.

FX just FX about down going You're do does XX%, should we into XX%, just think about how going play – how we how and forward? that Just forward inventory? think

Remember, on from in up for translation, would our pretty very we'd we're go that early FX impact purchases I on the it side be and little to on our a the modeling of a translation slight things have of our say earnings what far way be. currency the is it's contracts today a mean, we the benefit to topline think will advance impact sort neutral. get right inventory. now on FX small, I of contracts,

for quarters. well. benefit get The So we quarters is a we couple get there, and couple worse, of for true, we don't impact the things of same that a they protected – don't improve kind are as when as of maybe from obviously,

predict the any it earnings XXXX an So from currency. that. early a of from will be to before standpoint benefit real see too half we little second But

Okay. And inventory?

the benefit But I improvement listen, sorry, core would portfolio the inventory, of half going But new quarter give at I in reasons. good in in a sure will over invest stores the of XXXX over grow keep to obviously businesses. not for changes. arsenal We're in focused weapon the core from two capital productivity that any significant I'm some realistic in helpful. closing On now. the reduction going working was that yeah. third and line, saw time, the right Yes, from business, and the our business, can think and a pretty make is half we got product. which We're spot reduction we're of SKU we we to on of We and to the right kind from we're came that same as our say, in will mentioned, kind efficiency, expect us right? be

there, lot think harvest still I at But a more to lot there more. same improvement. time, a probably the is not So there's for room

thank Okay, very it. best. you the I All much. appreciate

Morgan comes Stanley. from go Please of Jay Sole ahead. question Next

fourth quarter. the Thank Great. outlook you. your in gross just for on My question is margin

versus could on fourth land the Maybe last range You're going year. give margin you in think year-over-year as gross up Do a against you us you you can a end grow quarter? a XQ? you will margin about tougher where basis gross think compare

quarters, confident gross in we've improvements strongest fourth been into the And very to despite I that being QX. as supply we that true. our still that's able win. would that We're we've grow our all along And benefit, of the quarter say strongest chain to assumed fact will some in talked cost accelerate able margin the about Yes. be earlier always

through also and for levels. on got fundamentally, lower spring just, our early inventory some and the business obsolescence So in from cleaner merchandise for that two QX. just reductions, And cost and flowing inventory ship markdowns benefits reasons, then we've incremental closeouts things and benefits will some product less exposure

margin we QX. We good. improvement QX we what similar in would in gross in So saw to very feel expect

Mike, So XQ, in I – points basis mean roughly it up you XX words, in XQ? about XX basis was points another other assume in talking if

Similar improvement, yeah.

in then the in Can where into FORWARD Similar is shifts was talk maybe what you distribution now some you business just for and right changing improvement, that fits of there okay. that sort WAY There's business walk that the a particular? Keds the about the model. And brand can quarter. been little bit down

view we business a us. Keds Yeah, as for the high-growth still business

our bit store bottom year this come of have – kind that well, the to We line, at was impact was of knew value to economic As we on to a count chains to national you a earlier tough have Keds' business. know, top the going a late that knew it fruition. decision material on reduce all a going line early made but terms. we year negative also and change for benefit And last and of has two

strong So we growth especially still a view in great Keds vehicle, Asia as Pacific.

to well know, you trend Sperry vulcanized continues for category. as for Keds a very and As

right it expected So to moves. we're it's the high business. Keds these the we on where with be very is business right, And

Okay, much. got you it. Thank so

Hey, Jay, real quick.

the right, margin, in we to a good basis on improvement XX had would on numbers. more gross than year by Just restated checking we had say I my the way notes. compared last basis, apples-to-apples really – points QX

would XXX be points, more points So maybe basis expect I like in basis XXX QX. that would improvement

bps had was... You that XX specifically mentioned and

a – it could maybe clarify bit. we you Then little maybe just

not in gross Just like margin XQ? on terms will adjusted you pure, do an in the a basis, margin gross a pure a of – just think but where a reported be

in Yeah. mid XX.X% Right XX% the in to that in of – fourth the quarter. sort – margin

Thank Okay, you. got it.

question next Jaffray. from Erinn Murphy Please comes of Piper The go ahead.

Great. morning. A couple of questions. good Thanks,

Good morning.

Just sporting on Are been would on love kind America. what guys you of of channel in significant some in seeing you're that change in XXXX? you into see order channel context potential bankruptcies concerns just some First, starting your patterns? on you There that how the goods curious North concerned channel? just some has further overall. athletic on peers any approaching I'm Are currently.

have than more of this at America, channel. we we're in any don't important less in I our Yeah, anticipating that to bankruptcies point, significant that But see we – North not less that it's than XX% appreciate conscious think be any business the adjust of across Less department than we've has to portfolio decisions and where with that the stores. just lot in made years is channel. a And over is several is. been – consumer last XX% the

And so sporting to concerns we don't goods channel. comes it have any undue our when

that in staying about in something just Can launches? bit it digits what you to Is maybe have timing? about it you different vein, done? a hear love then that And was that? talk Would drove America. that brand it was North guys up Is Saucony Or double new Okay. more.

of Fundamentally, great and Saucony, Yeah. it's quicker new introductions. product new product, product with new a probably pace

earlier a maybe it bit simply an might fundamentally, product So of bit. the simple we as it's little new to down blocking there Saucony it for tackling and little and in some But appetite a product stuff new historically. comes from what have it's get And great a stories. to than marketing was – done

see improved U.S. the time, really think was Erinn. EMEA world story, they're business have benefit. is But important strong, bit. that too, outside of in they right that around At it Their the growing a businesses now. also how other the same brand it's they've and I markets U.S. a QX, for U.S. good much got particular so to momentum has the

to (XX:XX) know growth okay. QX X.X% lot the the underlying me. it, X% been flat moved I revenue for on to revenue of Got the And to then us up a just full-year particular. year? just for But question to flat again guidance, up from last in why conversation remind is full there's

currency. All

It's all currency, okay.

assumptions – translation just kind has It's in the before. had the that from the itself the of plan we adjusted strong Yeah. as dollar and

the by change flat, And really way I that. could from impact. $XX looking think we're a it said at of it kind impact FX, – at was of million end looking more slight like it about we're But quarter. the FX today we the it's so of

other The changed. haven't components

that purest your currency would But you've or there? because be wouldn't exclude always revenue underlying included the currency form

underlying little which get that won't yes. have it adjusted, a and that, talking right. it is a out, of guy, is we so as underlying about When always adjusted much bad a We've be would for to we're currency why to guy, bad lower. adjusting the If was growth we're out

you. Got it. Thank

question The & Marotta go King Please next of comes from ahead. Steve Associates. C.L.

I've or review Mike. next the next apologize I roughly exact Good be morning, regarding underlying digit $XXX And and headwinds just year, million discontinued of mid-single expected it missed this is if Blake number growth range. you in I year year is and to operations. know for please? had could What that the about

I that. I good don't a right it we'll mean, information think, give exact to at of and sort get Steve. we to of a leave provide numbers, I baseline lot

you. Thank Okay.

Buckingham Krasik We from comes have Scott Group. more one last time The Research question. question go for ahead. of Please

my job. everyone. Nice for question. taking Thanks Hey,

Scott. Thanks,

have Sperry shoe picture to then question. Just the to what the a the does next be if to – to year? have a total bigger for do be year, shoe it If up of boat business what up next the question. sort quick one non-boat And one with on other over is I then Sperry business do in expected and brand

me, in Sperry. I operating I and but not resurgence of now, we're anticipating any boat preliminary don't exact year front say, business would plan have the for shoe in Right the next

product of at So at and now quarter for when really expect in point and look crossover the in year. new right next offerings Cup, growth we we second Sperry, come boots, when that we loafers to casuals, the look Gold in

Just an And non-boat as continues of the to brand overall give to flavor the some you timing. percentage on sale. climb

in? Would have you percentage up that

have don't to right in it front I me. couldn't of XX% Both get it now. I under you.

under pairs Okay, then And national. alluded your to of okay. are XX% you still

you've now versus wondering what your made, go model? come the in then the percentage percent of we reported what international? forward all is now the international, versus with will distributed U.S. as still from licensing And Just sales changes old

XX% mix still The this because forward. from of Well, rest – did model with of XX% Department done the the of will and the we the U.S. little Frankly, basically our of was out bit new it'll coming a Defense haven't of the U.S. from Rite of the business. going divestitures U.S. business some world. year, that shift like that Stride around of right the math and I new mix. of the the XX% kind revenue on be kind XX%,

reliant base, to on reason a base. about the of less about it to And as little So as guess, the shift think question kind another other another the your will on quite side. right? U.S. which fact, think international about year, to Not for think growth I be next U.S. of is on was good kind reliant good or you

kind we changing royalty a change or to We models, and Scott, different joint again, I the particular frankly ventures a in number front me, but between licensing. mix top time don't it's as have of have market versus XX% little a still of between of that going unit, the it all because, and part diverse. of models of line go terms exact still it's the And to would be is pretty on the XX% – of royalty licensing though of sort in mix that changes guess it's a market, it particular in and I of kind business. bit.

done? What have last you on your not EBIT sort percentage do go-forward now And to one. of come a from basis then just you of international expect

about half, half. About Yeah.

Okay. Thanks, luck. Still Awesome. right. guys. the Good half. All

Scott. Thanks,

Thanks.

session Chris now you. proceed. over I like has to Mr. Thank to Hufnagel, ended. now call you The Hufnagel. may would the question-and-answer turn Mr.

Wolverine of World I'd joining Wide, today. like you behalf for to thank us On

X, XXXX. available website call our day. conference The will at on December our is reminder, you, replay available replay until a As be Thank good and wolverineworldwide.com.

Thank for presentation. attending now you today's conference has The concluded.

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