Wolverine World Wide (WWW) 7 Nov 202020 Q3 Earnings call transcript

Greetings, and welcome to the Wolverine Worldwide Third Quarter Fiscal 2020 Results Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Brett Parent, Vice President of Strategy, Investor Relations. Thank you, sir.

begin. may You

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

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

you have directly, within news call release. the XXX-XXXX. If to earnings release non-GAAP These sent and Francesca (XXX) call the prefer copy of today's disclosures. release disclosures would a at made body press to please This tables will the of during include attached comments reconcile you morning's Filandro and

reserves we severance, loss are other environmental of non-GAAP costs related made COVID-XX U.S. I'd providing remind and the for forward-looking to of recoveries, its under also are predictions exchange you financial inventory laws. call and for adjust that and like projections rate example, changes. cost credit our the operations and related During today's Wolverine expenses, worldwide to conference including call, statements regarding and certain which impacts related net costs, other securities during results, foreign pandemic, costs

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

this and is well. the year. exceeding at earnings flow of per thanks execute million. third morning, in us. put cash digital for game $XX strategy Good of I share approximately Earlier place All significantly hope earlier to everyone, successfully plan the Adjusted safe everyone we the joining $X.XX of our operating million. revenue our this company quarter Thanks, and and reported The entering $XXX and and continues we DTC-first over morning, expectations outset of quarter. pandemic Brett.

our environment focused in growth agenda, accelerating it DTC consumers our enabled one, advance all has our of current and is storytelling; offense service growth and experiences, by in to strength. innovation of are which phase positioning global With Especially customers. the product our and team. from our antigens; compelling trends markets the dramatically with enhancing accelerating brands remains enter now consumers to deep a the ability aspects position global on: and by product our pandemic While digital recognize and us the brand uncertain product craving. two, pinnacle newness them Upfront, categories of I'd operational Thanks next capitalize three, on and like resources the business retail global to model. challenging, our we driving financial creation to of engaging dedicated consumers to

focus liquidity, customers. cash our generate efforts. for on the spend team inventories with am inventories to manage Over overriding with eight substantial on I an employees controlled focus flow, truly and and cash improve discretionary all protecting operated and months, last has their the protecting grateful generate all overriding substantial an flow, spend discretionary manage

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and robust nearly in business doubled up growth in QX e-commerce Our continued XX%. owned over QX, its

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are million more O&E target in We commerce revenue revenue. aspirational of our business to year, setting its doubling an achieve XXXX $XXX next global than

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Thanks, a QX on some Brendan. detail our now brand. performance group's recap additional largest I'll brief our and provide of brand

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plans include forward, start. build momentum response. hydro a its The mix focusing the lighter consumer on on Nova and exclusive mobile on which and end Stinger styles, icons At the newer the franchises. hut content revenue app fresh to devices. majority XXXX and elevate biggest accelerated pace of For collection the important the global will and Merrill expanding trail a also buzz, Moab strong current to Honey plans and Moab on in off the these and to and capitalize X, spend and and to a field is on franchise. digital faster, support on in content launches brand's quarter, Starting further To Merrell, product is to Merrell collaboration, launch equity launched Moc Moc athletic delivered the line, growth the like merrill.com pipeline execution, seeing most the harnessing strong Merrell of collection, experience and industry-leading Merrell guide the off strong two are sustainable The elevate new brand on date the and collection performance category consumer Jungle Moc iconic to mobile at offerings of due new delivered storytelling Antora of trend, behind And moving brand's is compelling digital collections. continuing solid the spring all more running growth innovating these of easy its the a which to marketing trend-relevant consumer-facing the full. its high-teens and exclusives, an

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and expand Hub, confident which profitable most Balcony markets, significant to right. using and in this Italian trend including the already U.S. size and we is of and world's product success in trend leadership creation and highly are and prominent large the European that opportunity China, countries. business capabilities and it's marketing global for Saucony, in includes early of originals days, Business is but the additional The market. fashion in lifestyle terms important other its One global is still lifestyle business

Triumph the for On XX fall. performance delivered was Saucony, is brand brand Endorphin the significant selling the over with price. another with the business average Saucony sell-through speed the launched fuel improvement Product the technology where The to brand the its and also in missile franchise's and QX. the in with run recent The leveraging fundamentally line rollout nearly added for XXX in success margin points a accelerating gross growth. continued side to launch the to of it and drive of the experienced increase has and growth its earlier brand, across the in in the quarter. in QX. Europe collection driving innovation in and with retail U.S. Endorphin during of the Saucony.com, opened power heat, China, for And quarter momentum expansion Triumphs as performance this continued QX, particular, outside success on brand basis XX stores doubled recently run product, brand's product brand's of technology success. well, continues power building its cushioning the roll

acquisition Endorphin Looking franchise updates launch and franchises The two the Sperry in half Sperry.com for a driven impacted the first like shipping of boot new new QX to across start QX, QX new paced of has Ride grew right products looks with trend media new by women's first and of the the of of and and consumer key the next offering for of with XXXX boot biggest partnership in by pandemic quarter Saucony exciting a ahead, the results branch Kinvara, with series. of high introduction Saucony. were substantial XX% in Guide delays in many including increase through from expanded the engagement. moving along innovation be teens blockbuster XXXX, will and will John iconic the year, assortment with expansions diversified brand's saltwater supported silhouettes, holiday XXXX which men's product. the its The some the and has a social ramp-up into Legend. brand's the ancely its

is with As the clear on and product focused this John boat including the leader reinvigorating market in market category, innovation, Legend, shoot executions. category collaborations, Sperry new product

float and a in XXXX, the response and the new example, from affordable collection, This For a is groups. already consumer Sperry shoe. collection boat receiving of very trend retailers launch will injected strong version fun

impact financial On Stornant detail. I'll of people recruited marketing the Sperry has in side, and hand to more lead Mike the to talent already review areas. off new creation product now seen the results the to Mike? it

all us. to thanks of and joining Blake, Thanks, you for

Let me results insight $XXX.X providing at trends. and finished year. the further our quarter on then exceeded expectations last start company's quarter XX.X% on an third update million, Revenue share by compared business current for to the down and third

Our with and own basis XX% margin of expansion XXX to nearly outperform robust e-commerce points. over growth business of revenue continued operating

QX also in were stores owned Wholesale key and a XX%. month well, up less relatively and quarter. at performed improving nearly trends, sublevel and retail XX% indicator reorder Our down in city of the each better-than-expected

EMEA, in highlighted our own Merrell improvement in a there. Saucony drive detailed, sequential Blake mid-single-digit and As by macro outpace business to environment helped and solid continued the growth

down interest in improvement, most less was product and despite by followed expectations headwinds of for $X volume changes million this the $X.X high margin market taken the finished to per drove year. of down from more the the year points and some of reflecting mix. royalties conditions. versus expense nearly higher proactive as will cost toward taken margin by XX% which has actions measures our improved million now digital $X.XX due quarter. last response of significant a $XX Latin the the of from down year. due rate operating marketing. earnings this general Healthy to million this quarter in versus impact facing basis our was from end elevated lower entering earlier diluted operational expenses versus revenue, $XX earlier our was liquidity redeployed by lower the shift down prior revenue closeout offset than our selling uncertain million reductions this the DTC Net Asia America, and ahead was of result exceeded $XXX.X last XX% were certain up last share more and QX to up XX.X% year lower and from gross from The from tariffs. meaningful XXX last I the resulting balance impact year. year North XX%. the well year in expectations in Adjusted of at management of and With items expansion administrative the and Adjusted than the America mid-teens quarter. geographic tax the regional to Inventory was inventory and year in pandemic expectations Adjusted both discrete than Pacific significantly reopening mix but margin Gross was been also an international last year, e-commerce channel entering sheet. effective from down business, in quarter, priority retail million, XX.X%,

We of are with as year and earlier for that inventory the commitments some made in stronger set. a lean projections QX QX a position result demand items when outpaced key were inventory entering and QX in have

in and this portfolio from operating during a costs most now $XXX our managing to exceed in during history, the the Our $XXX million capital cash testament supply our volatile demand quarter We the operating activities in availability of adjusted the over cash chain we quarters $XX.X last the We've disciplined as quarter activities XXXX. more for expect the time. generated in from was the has over full $XX two to operating diversified million expected and will already meet goods to nimble Cash strong expect improve and we challenging operations higher model. what than might first operating projected million company's be million, remain from generated much working year. of year for and quickly, a than

QX, million $XXX During off on our million paid $XX and revolver discretionary term loan a we balance the payment. made

million finished had on the this debt QX As a hand at $XX was Total million more than with of liquidity revolver million we at than year. including result, and last cash we billion, $XXX $X.X the of end capacity. less quarter time of $XXX

by finishing well facility. ratio ratio times two X.X quarter leverage continued times, to bank-defined credit the required at Our below improve, the our

trends continued start. owned trends last Many in In increase We are we to are a success and expect with the environment. better our consumers to DTC flat earlier in performance continue, to was performance. by to by our to revenue QX, we off result these partially wholesale selling order continue resonate store challenging an evidenced due also as remain and solid. this brands very orders, good encouraged season. of company's of other e-commerce business But sell-in nearly October and a holiday length a year, in

are XXXX shift impact QX XXXX. XXXX launches spring QX from timing factors there our to later in the in shift lower planned will including that spring to product distributors December for XXXX QX negatively a inventory However, and A from of key to revenue QX. of into carryover heavy the deliveries international for due franchise certain Saucony sales quarter, partial

distributor pockets reflecting global create has during to QX on lean a Based impact finally, due in of revenue the royalty last more pandemic XX%, demand U.S. quarters. mentioned. factors, certain approximately gross down markets Some started and of our We that from revenue for inventory international business. project than could the the for currently of And a decline lower to stronger-than-expected expect previously certain XX%. we two income headwinds be brands, these to the QX margin resurgence no

from fiscal $XX million more to related making to few challenging the conditions, market and of extra We consistent mix in a a is After quarter. to it entering in also QX. QX increase week expense a this new QX phase, DTC the the project mostly SG&A $XX to months million, pandemic disruptive of a now beyond higher sequential expect business bit

Merrell to we year-over-year franchise trends product other digital growing capabilities in business there. growth are meaningful QX introductions in continue Our in support that and Saucony invest and develop XXXX encouraging returning our for robust However, for are launches and QX. seeing confidence The our product very remains we and strong, to

and brands heavily the resilient global to especially to Wolverine, during be last relevant like months. customers are eight companies distributors wholesale more rely have Finally, and choosing on and who proven

to demand For business, a year. in increase to substantial order for has our QX this last global translated compared

are related brands Our for in of up now early dividends from our the are brands strong tailwinds to of to set proactive response pandemic. the and our challenges XXXX. paying trends consumer Many pandemic the growth now the benefiting and

of I'm provide to in Blake now have XXXX initiative. our us going We balance biggest conclude our in to capacity it to many growth sheet back to remarks. invest hand and flexibility a and opportunities front Blake? over to

Mike. Thanks,

and to like share the I'd our ahead environment concluding, some on macro to looking perspective Before XXXX. position

understanding much the the global stronger we attributable category the environment and shift handle in the part the consumer and While pandemic. a remains better uncertain, a tailwinds to have in on of marketplace

impact opportunities in of and and the but expect Mike brand we some perform the to emerged, also to start currently created environment strong expect We new behavior pandemic have The a into to shifting company mentioned, XXXX. as has poised XXXX, is persist that portfolio. the for trends consumer our

channel online U.S. expect this XX% in acceleration of XXXX. our the for and continue We could account purchasing to almost business of

the for in active from And as and categories. at our horizon. experiences home news of these been all the that will will trends We covet home product the by athletic is social eight newness, offer consumer expect especially continue have significantly product we in work outdoor, last distancing these also accelerated us This the great and to brands expect portfolio trends industry-leading and months. pandemic consumers These continue work includes categories. beyond of

in investing help move engage tools on We and digital and consumers deliver faster, us prioritized innovative have to our with more product continuously focus our product. consumer, our pipeline digital capabilities, our the

continue way, talent, has helping in our to company the merchandising also future forward navigate been and catapult to The work, be Operator? to it but I especially challenging, company for position and incredibly strategic the us an proud invested incredible over year digital past We our the has way. supporting which the operator. now communities and to dedication the that, product path. I'll on back and talent. hard growth, have has design in team while pandemic With the people adaptability, along their enabled all turn of responded

Instructions]. [Operator

first the Stifel. of comes Our with question from line Jim Duffy

morning, few Blake, the $X basis a from the billion some DTC investment, that by yet price business. understanding XXX expense selling? improvement? margin I everyone. then follow-ups. questions good correctly. and is base? Is margin have on of more behind more your Or the it but points EBIT full you Thank What's improved that just leverage And

A for increase primarily full our the higher-priced Jim, little bit selling the but some products price of Endorphin, demand of both, just like in increased for and example. consumer Saucony, from

mentioned And Okay. represent that XXXX? And share do strength you you've customer seen aspirational incremental I'm does DXC type million curious business, any communication of year, you're off what given acquisition DXC next planning specific then Can can that this in of audience. on making those for the the your then to improve goal DTC allocated then you $XXX those with files? have growth the you where statistics platform? about dollars more customer investments. how being are And for to year be you

of Big data, of we Those additional digital also with talent basically, broad to we're and when Personalization, Yes. AI consumers. content. The categories. is just use directly is of key look investment. kind at are digital marketing tools investing relevant. I the the Obviously, DTC, digital mean, ability in some a interface

we that coupled XX% we've respect additional our of significantly few from with areas engagements models investment. e-commerce about be follow-up. well owned be the for were across a a online They So XXX%. way in next the customers been aspirational in brands, social some regarding that year, for our years, I With as stats. some them And business, our of -- to Obviously, investing larger. would in continue And call e-commerce to there -- business. for owned that our our you goal had businesses would my of increase number plan Merrell, really we're and Saucony. of XX% have a get we to wholesale but can the statistics up don't of I

guys. you, Thank Great.

line next from Komp comes the question Baird. Our of with Jonathan

down And to assumptions I to just morning, wanted, quarter the then get thank October to a you. would just how should Hi. I see the mentioned balance close flat. you demand first, you much fourth that wanted quarter? I if might little for know we shift to outlook of international Mike, gave versus maybe more much the about quarter 'XX? Good think quarter. unpack revenue the some guess ask pieces? you I moving first of the is kind revenue the to the piece of lower in into one-for-one how how the Like about on of

Yes. Sure.

trends order John. good obviously saw that we the reorder in quarter, some start seeing been sure, future we've the demand the For the in in of that about QX. to feel very And and coming with -- terms both of

see new talking down in will, for $XX biggest coming it international third-party distributor we're The to quarter, that is in December. sell-in, So going about, the if about It continue. is, was shift is I'd good inventory December, overall, to million their relates just market quarter be that those impact you where to to related million have the but million of that They're say, need now. that distributors they $XX of merchandise into positions terms don't QX. to especially $X solid But of about, in just end shift right right strong demand, will carryover now.

it's going million to time impact $XX the I downside to So and to us not us, is quarter, million for $XX think, a that December. one about until hit

the that's shift. primary So

in our QX more as We chasing also a in -- above meaningful That's we're in very some launching QX, They've have better and really QX brands. the QX couple here running in more inventory shift them we relevant our some And franchise into like in Saucony. the to chosen to last done of then years. run of key updates as to season they've for opposed been QX, some intentional ahead of launch expectations. their

million a an part. issue, QX so or be inventory on shift not their into -- so $XX intentional much in That was the well. but shifts as that So that could

those So we're headwinds the order up major our solid. nicely, the New as of shift pretty QX the so really The Year. kind pretty poised Otherwise, are quarter. we holding meaningful. is business and improvement the book in for Those far into in super are are for a substantial trend

you've helpful. follow-up, when then about recoverability given digital the actions really both some need to then piece, you thinking the to more of margin the business had comments you XX% your you shift toward That's levels how your in business? how XX% about, past? the overall kind especially toward some side, might macro And mix should And the revenue broadly one get think back are operating on thinking of about about But of we of and you've your maybe the that taken cost your Blake. think Okay. the on that XXXX, the own

December. doing quicker down in wide the addressed not hard have we've have the appears Yes. separate I The markets Europe we're here Frankly, pandemic second can so mean, market, now, kind even basis. again, obviously now the though midst they're international when pretty U.S. XXXX that we normal pandemic the done that a U.S. pandemic. in right Europe at much we're snapped the we of be to market. right on but they the is a what country-by-country bullish, shutting to normal. in That's a of international what look the back with global respect than wave And

markets respect couple our over last with one Europe, quarters. hopeful of of has we're here the to which international strongest been So

have athletic the order feel of book positioned. pandemic. So We the bullish. then question? accelerated or that and by what was pretty tailwinds And created the overall, Certainly, other where is your from we're we benefiting our and been by some pandemic outdoor, like Active

improvements cost structure you the some operating was margin. DTC It made the the more not year about to of respect think healthier just the to brands. business, just Yes, restructurings we've in if through channels, the better, the profitable this improvements our done in also but with we've mix and

than to operating lower I modest think a revenue would we that margin back getting feel level, relatively revenue At so comfortable XXXX levels, Jon. XXXX levels.

get can leverage growth of seeing. out overall based and cost Just improvements some of the on the we structure the in we're that

comes Wedbush. next Chris Our Svezia line question with from of the

on of the Thanks when I into the first, was for you And the go kind by but two given your that -- my are the taking strike just to Good much also, regards expecting you process? week, specifically just and just what you Have guess, back It stores. XXXX that, just for are different. questions. I QX. morning, European to extra lockdown? thought I things, business, had business was quarter. factored job retail Nice everyone. the you guess,

Stores a very got you've improve. e-commerce Now to profitable business. continue

about in That's week think we extra question. the how first QX? Just the do

normal base, think store extra XXX impact online I anticipating for I'll to with question we now for shopping change but the in a top spread week, your week the another address it's going another material or mean, the circumstances, over of beneficial to stores, that probably -- not -- XXX week to to last under be under owned may we in exchange goods The our regard. is that's level to we're stores, isn't think have don't be Yes. going first. aggregate. obvious that on return or we going line. example, that's goods, this year, the going Most It

was... your of The first question part

it to cautious Italy particular. to markets Europe -- quarter, that QX, where think own the especially U.K., in, the in we're I the a given markets stronger related the start obviously, the in about we're little and Europe in

the our to of exactly reason have QX for So a cautious even really for start, business some been is the though good the Part Chris. of got sell-ins off good. that, outlook

far not But Still there. And so a so unknowns cautious very bit we're early. being given significant a impact. overall, seeing the little are we

November, some countries most in have hard can doing they're impact the they from stated that, so a European shutdown and but expecting during season. have the are holiday snapback We quick December

going the into just that, maybe and I it, into opportunity? the large us how Got year. next I'll Whether plays specifically, growth have And in you the moment, for I a it the call the fastest-growing do mean, potentially margin profile on obviously, you understand this good could you business just Okay. guess, into talk brand, what the your brand about Saucony -- it. trajectory originals for just just Obviously, could visibility itself. growth maybe year. Maybe be U.S. a help

play the next just of And with business thought on, the that into originals Just to assume how stands help today. quite it high us I where year? understand stocking process coming margin, that's

Yes. from hard years Saucony trends ran these done but it's current side, but believe, to on their performance not clearly XX models, shoes benefit they're product, but the it's new of originals marathons technology, just XX, under them, from benefit in which some fashion-oriented. to is work really going going ago, now the all people more industry-leading color, it's the also to

And having there's going business view it model leading throughout in Italy, business a and model far, We're rest comes obviously, the share. punch the And really expanding a originals opportunities. Europe, same to as the luxury. to throughout we X, that the originals and is based currently the and when Italy on largest we're country biggest is the Saucony world. of fashion country two use So by Europe

in U.S. We have a relatively small in business the China, today

significant So markets. -- other and some

is first is updates are coming Saucony half brand side. probably positive revenue Saucony, year in all you So brand or the year, profitable original percentage very the company. be we whether the the the for next then of a is Endorphin -- this growth that of upside. on largest view Saucony. next that of Saucony it's a side, very terms performance our the some the business kind The on first guess, business fastest-growing and the And as in will product

best. Okay. All the thank you All right, very much.

line question Degulis comes the from Markets.. of next with Capital Our Matthew KeyBanc

Good really congrats morning. on quarter. a nice And

in rainbow Thanks. boots I quarter? that comment the business and AURs your of would up expectations a and business built do portfolio you fourth margins the callouts affect the over Sperry last Can positive has on or for the other strong how negative? for How businesses? Sperry in years. And for couple weatherized Any So shift quarter? such your any shift

Yes.

business and QX. with shutdown and inventory I QX remains our with the caught think by some probably but would are inventory. lean cancellations where I and is limited inventory of adjustments areas boot got one boot we the we the order very lean Sperry Sperry business some say strong, of in order the

know it in the in by the line. has Some of the I position. the far, in rain one that more Sperry share in number corner boot the gained that where product it market category, fashion number,

challenges, that That's strongest the and Sperry quarter So will relate for on the category of the Sperry. cases. But some we have be feel Sperry is obviously, they strongest. would either. from bullish had be for talked relatively best-performing for strongest They've timing pandemic. going about given mentioned headwinds AURs this exposure. the in we for will And the some the to don't category. related margins spring category QX Sperry The performance That QX shifts that forward. category And impact boot year. the Matt, you both the international about these the

all, in decent in I that all we'll So a quarter think for Sperry. QX deliver

Makes sense, follow-up. thanks. one And

Can as of quarter really priorities update your year? Another cash into you head should strong next us on flow. for cash we

heavily remind of around seeing we're to a cash out positions business great team to getting working job next of inventories, I the and normalized continue pedal all. We've support performance managing diligent above our inventory pace year. woods we're we're more not going at off that, here. back of certainly in done a We're foot our in terms obviously into -- been be said we're what a the level super the the much yet. taking but their we're allowed already this we're to to The has not mean teams, year. and Having Absolutely. the I beyond going of and place, better continuing in capital to in investing pretty business.

the for so that be super year. comments. the effect, behind first to important these cash will in his highlighting flows investing programs that been And us speaking, Blake negative But has have new a in on relatively part of

our I level, think gotten other to hopefully the normalized now. to that to always to a more as We're is going we've Merrell, priorities, going our to and in or debt ratio to at good it leverage a X maintain continue work in times, down be and Sperry, relates brands, growth seize we're our initiatives place. the particular for opportunity right Saucony better. looking And for

mentioned on the already that we also DC going in As be capabilities year. Brendan's investing remarks heavily next we're for to

organic very our So be areas for now. of at well. of those as end growth And priority would focus our kind list is high the

Thanks. Best of luck.

the line from Dana Group. of comes question next Telsey Our Advisory with Telsey

$XXX your experience both quantitatively the implications, It's you've welcome. been what qualitatively cash for adjustment is an then everyone. still confirm million or morning, for for time Wolverine. operating Wolverine? from as digital-first Brandon, flow, wanted just at is million And on a a see to it the as short Good $XXX guidance there do Mike, year that certainly to I executive been the And and you there?

that maybe million. $XXX exceed inventory some the bit earlier bad we'd the to full the be Brandon might only inventory to of million That manage I some fill headwind the that will $XX continue we shipments. don't we're year in Why flow cash and give bring can then spring really [indiscernible] expect you answer the for little seeing. in. operating a the now and a and as be flow But fundamentally,

be as the to been in a the And thanks And great year's in far, be next stake my increase. Yes, said, great $XXX remarks. able so to for XX% to ground here another as it's million, Blake a I put business to I Dana, said get mentioned, months welcome. two would e-commerce almost which for it fire to

and I've my it's think achievable here. I time very based seen short on what doable in

think themselves to I lend these to brands e-commerce. pivot the

Work as whether mentioned, Outdoors, are leaning lot continue job. that they've some I pandemic, a the out think e-commerce. so to I and into of categories pivot that, it's to really the Getting of Blake gives into during accelerate think doing a Athletic, so important been great us our message tailwinds the

the path think, bit will continue thrilled teed and has additional quickly. and already prior hopefully I'm up coming that investments ability some I and have faster. a and make and little that has allow to to path very do the things that to on that help leadership, getting to the company on here, Blake think some the Board on provide me been team I me nicely us

a help other of going the test to customer, and also a we're get going for but and that something as early the XX% Merrell facilitate how to launching here I through mobile mean, device, able conversion should even I almost been app brands up see our a executed. regularly it as in to to phone, our communicate way say. websites. the we're XXXX. just with hopefully, And our that's mobile I comes quickly on the championing mentioned Blake to to since before traffic in be And not So I've be got

exciting So facilitate I the big is growth. for app like be to think a having Merrell brand help mobile the going to like something

comes question line with Anderson FBR. Riley Susan the B. from of Next

our Legg, on good Alec questions. you taking for for morning. Thank Susan. Hi

grow that on quickly the Just Work quarter? key of category, did this performance? so, drivers were that if the And what

the couple not to composite seen toe. not in I is example, over had brand. a for significant work product, good toe, Wolverine would product We driven last -- other was QX. steel innovation, in a pretty of we've quarter for a the the new quarters -- here Fundamentally, say and being growth one Hellcat Yes. thing by collection, us at Work is product pretty shift soft to Work incremental in a exciting

are research consumers home home. class. working cottages, People also and People indicated I in work, be not that think benefiting lot the from category the a People are may by being their the has traditional driven their is environment. at that homes vacation so of are is at working pandemic around work consumer Our at yard. the working

expect continue by new to us, new but creation. not from product just pandemic, it's and work So for we it really, will that's product being the driven

seen year you a know portion I business. season? with pretty I Perfect. follow-up. to just being that maybe is different mentioned the Thank you've then related this your big back-to-school have unprecedented, back-to-school you. trends But a of not any And really before guess

started companies. you've are bell the normal a fact least, situation the on given at that they have Back-to-school from universities all No, States, to K-XX curve no different different United than didn't and heard, It operating brands other models. soft. across the and pandemic it, and frankly,

Some and and in class virtually, class. in totally of virtual some combination some

period our soft is overall or as you So for muted back-to-school back-to-school But I important a season consumer was think of not that footwear. time goods company for it a know, brands. and for

you. thank Perfect,

comes question with from of Kummetz next line Pivotal Mitch Our Research. the

for than kind adjust understand in? to which, QX? rate than growth expecting you the of I I the extra with the guess, be that Saucony that to for And taking and on if even just QX. shifts, trying guess international then that you're big week, factored Are maybe are or thanks pandemic start QX the underlying Mike of my the worse better rate and questions. is sort QX? extent normalized Hi growth to I'm for ones you getting to is for what adjust

think pandemic our outlook right factored every I the is always into day. now,

QX as in in without But baked as improvement we sequential fully items be would meaningful I QX. QX think the would to very see, to it's there. So that meaningful quantified, much can it pretty -- yes, be we we're from and these conservative trying, again,

a bit QX, demand got to aside I the those to. converging the into we've The But had of be issues is think that's I which that could. order And level are right wish strong. had quite all we the to higher now those I we'd styles rating If of set service in business we can't able wish a able than But at all you fundamentals demand strong. core be is the you great. the think for we to that of coming quarter. going QX, time, So QX, we'll in improve kind put [indiscernible]

strong think as percentage and double that quarter quite in you through the given of up lands maybe And were And the it growth even the assume all of cadence year business, wholesale sales? as it where fourth into that strong swirl? of full in lot or as the I'm then I a on maybe up opened of for sort the to one for But maybe quarter of meantime. trying the to not just a understandable, that the commerce, totally last quarter, has months digits. flowed as continue as business do understand kind quarter, really

a the had of e-commerce in than when environment the over XX% has growth down you in little come in quarters. XXX% almost or the we up today's be mean, higher-demand peak more malls I if that of owned real about regional pandemic, were would last are still large quarter, especially and to with QX a consumers shopping two percentage start keen QX us, the We Yes. in going QX. a start not for gradually normally centers.

for countries but some pretty closed could again, continuing going closed areas main XX% eight digital up QX. lot consolidated precisely in of last that behavior been months, a expect purchasing well Obviously, we X, think a our has So moment, fairly to and see our have hold predict and forward. the of we the one to little consumer And areas would X, is at shifts in shift into to down can't several just states to DTC it's going of and be And us, down focus future. But in some predict dynamic -- for going one XXXX. to the come where bit a really years, to a it's achieve of bit continue. kind main as like online out hard and we I as but been little growth you to going would

Okay thanks. Good luck.

next of Our comes Murphy with from Piper the question line Erinn Sandler.

questions. two guess Great. Thanks. have I I Good morning.

to differently early kind seeing the of And or past? are demand? First, year, holiday the then how shop with excess than as of to securing it in you the you what meet out this just are kind And shipping and they on seeing setting earlier capacity actually surcharges? come holiday, are online consumer procuring retailers have relates you

holidays' I less board season. all consumer holiday a bit little would air. -- that the during are Overall I little the it's over have seen -- a the Yes. up in surveys bit. spending

surveys consumer is increasing. other show it Some

year. anymore off going to we not we're Black holiday season and don't experienced X- and the know kind believe well. a of as Monday its kicking that Prime it's the in X-day going due that or Day Cyber have occasion October. Certainly, is is Friday I spread this of we've that peak Amazon to think historically. some Maybe to I out be high shifting

not going been some consumers some constraint I be delivery near as that it to be dates and for that holiday know the Amazon in able by shippers ordered to to, see expect 'XX the we there communication ramp we're to on order December in by So season in key example, and up. to in gets has shipping your going there's receive that because by Christmas. the general to an you orders early the

And some expected people past have that. the in

some costs, constraint as and congestion far the a as bit there's clearly So at inland port entries little on shipping. of

We expect season. that to holiday for continue the

very right were great For open for little May, the size for in source, now. We're the job for team advantage an when industry chain companies but little bit scrambling footwear and wanted bit couple we us a stay proactive. of started areas, of little smaller We brands good and pairs shape. it's a pretty right shape supply good than we're our adjusting shape a And of supply pretty a did here, probably a now, is at us, that business. being collections we but the it over smaller chain we're we to the in better we are and in

some smaller you're a may rightsize brand If a a it -- to smaller tougher be company, experiencing of you or inflow. your goal

had Just on that And growth talk don't we to particularly brands I center I Prime far play it Day for what of about Prime Amazon mean, I were front by saw Day, here off said, exceeded we was Erinn, on the encouraged outsized some us. was the what always quoting. Blake and

with think leaning confidence it well portfolio could how brands explosive we go, some our our to in job for be to were e-commerce brands, inventory right greater and even me I lend so the don't and of and think about. they the we the And ensure talk of to across team I right having did gives even great messaging themselves a ready Amazon always

Thank you.

comes final of BNP question line Parabas. from Laurent Our with Vasilescu Exane the

talk I about as continue guys, it structure, Hi the kind Laurent. XX% for to next it in is in of should about can Should margin investments e-commerce, of maybe just you year? you Great. levering how about the this think growth increase you as impacts be you think particularly wondering, we this? how context that? Ian, was Or on

Blake product little prices. that in our mentioned powerful stronger the the mean, Sure. how operating on margins, explosive channel product trading both QX, Absolutely. up especially I offering -- market. a in already consumers quarters margin and pretty this proven are brands selling We the the new channel. on higher we've in is saw QX see that expansion bit new

platform things to that take brands. is but So platform in leverage. center we -- been of a once all cost lot both drive structure those business excellence And have of we're that talking we're able a beneficial, have today the services of all a the we about scalable that provides of level and our growth kind

more of capabilities investments but along So this to capacity also make of area see in expand we accelerate need opportunity, make margin, to way. yes, our digital even more the continue investment and in that some us we further would terms the give to

this I in do things of simultaneously able being certainly those a both is is luxury, to environment. So think,

Yes, that's just maybe great. Awesome. And follow-up. then just one

that you Are -- I'm may you -- holistically? increasing like spend about marketing. flattish? marketing spend like into are You've just marketing thinking up? you're digital, traditional shifting be overall Or how is such about just wondering talked digital going that overall marketing

into marketing website one it And we're at digital from of performance heavily looking away places. out-of-home into selling marketing spent. from dollar to shifting Yes. our clicks Well, yes, or the into the that it's really first right

a that taking the we're hard So at up. ground look from

the and the and the their through acceleration through business very but been about in ad has our diligent think pandemic the SG&A their spend, team reimagined I been going has always DTC. totally

first doing dollar we real-time optimize last we're figure we're not to we now make how but that of kind spending. out just the dollar the spending, So sure

We to of to remarks.. for have over session. any I'd turn our the closing call Brett back like Parent end the reached question-and-answer

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

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

Thank today's teleconference. you, this concludes

Have your may You disconnect this now time. you Thank participation. a wonderful your at day. lines for