Wolverine World Wide (WWW) 9 Nov 232023 Q3 Earnings call transcript

Greetings, and welcome to the Wolverine World Wide Third Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Alex Weisman, Vice President of Finance. Thank you, Alex.

You may begin.

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

Financial Hufnagel, call Executive Chief Chief today the President Vice are and Stornant, On Mike Chris and and Executive President Officer. Officer;

our viewed earnings this financial for website on news is our third the sites we release wolverineworldwide.com. Earlier XXXX. press on press corporate results The morning, quarter available and announced release and our issued many can at be

non-GAAP plans, affect conference call non-GAAP that financial comments and performance were made growth year today's securities such and financial release measures. most press include today's These within the XXXX, projections regarding the made the measures and during earnings morning's statements for forward-looking statements to release. laws. body This financial of remind expectations, as expected to trends and measures you company's like tables fiscal earnings describing reconciled during opportunities GAAP the the call future to comparable predictions also U.S. under I'd the company's are those company's attached outlook

risk the result, could and With As that over are are our number forward-looking there the a Christ caution in materially being These that that in filings I'd press those call you to factors the statements. important must to said, to identified turn described actual of from company's results cause like SEC we differ releases. factors in a now Hufnagel.

joining call. morning, us Thanks, today's thank for on Alex. Good everyone, you and

For and than our target. our the in better third notably we inventory expectations quarter, delivered revenue and with earnings line

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months. Moving to to position the focused the efforts We've on for past our future. over been X critical Wolverine X efforts turnaround

the brands First, organization cost improve the and the inventory, work drive sheet, by to enable structure us profile. will margin deleveraging our more in and reduce stabilizing balance reducing to growth. the company platforms invest This our the and to restructuring

products focused strengthening needed delivering brand reinvigorating ultimately builders, the By to squarely company. growth consistently amazing telling capabilities key talents the strategic become trajectories. great stories and awesome and our on consumer-obsessed and brand's redesign Second,

to let important the topics. me cover relates X it stabilizing company, As

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cost operating global of Finally, redesign structure, the we model on significant made our including our this progress morning. announced

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with enhanced to We're focused, quickly biggest invest and efficient agile a growth our becoming capacity opportunities. company in more

future. think the you new taken the company in Wolverine the for consumer we actions muscle already key will about including building today's World modern demand we've and that behind creation. few and key to design marketplace, insights, believe As Wide, capabilities returns the brand redesign biggest the new me let highlight We're generate innovation a building product

on strategic of insights, innovation, redesign studio. important trends, component excellence we agency design focused consumer the to marketing, the intelligence, public announced squarely consumer, of a the creation and initiative, center teams our where in-house an market morning, relations collective, new is dedicated of creative This

design brand future. intended The brands support storytelling brands product and what excited drive and creative and into our I'm as to as marketplace. new heat today innovation of enable our the demand can do in about team well to for Collective this and is the they family

and unlocking consolidated our we've opportunity Collective, global the creating efforts which created strong experienced and meaningful believe global leaders our our team. to to the forward. could full coordination focus addition We've them help brand's drive be company global the very and to I'm commercial partners. get new a with excited In greater new tape oversee collective and global and responsibilities, team, new appointed into around for licensing clear improved to world, our licensing the through we licensing assignments

share over future closing turn to going and the our comments the our detail updated call third guidance quarter some on to provide to of Mike? Mike returning on to more I'm company. before Now results

Thanks, for and all call. you Chris, joining thank the

start our this on review call, then an guidance. by morning's quarter followed will results, and with I work update a third transformation For of

revenue of and from quarter XX.X% line was our below was with XX% our year. million our for down outlook in $XXX.X expectations. margin of ongoing Third gross business last Adjusted

a accelerated the in gross levels impacted inventory We inventory, of were lower which QX the by our down than carry also gross to contributed planned. negatively mix end-of-life more to helped third-party liquidation sales margin a margin. part of gross which margin distributors, drive lower million Sales and and to $XX bigger but

share diluted offset per it earnings gross in cost charge share and margin Hong the North negative an Reported Adjusted diluted offsetting included Puppies sale leathers gain a Kong operating $X.XX in $X.XX Macau, on line quarter. per includes of sale operating by and earnings changes and of This and China, gain discretionary in Adjusted for unplanned the $X.XX shortfall Hush our American the IP X.X%, margin with management in the on was was assets. a with a FX business. were was Sperry's Reported impairment intangible quarter were X.X%. profit. the for variance from guidance,

improvement. updated of normalized better lower QX XX% compared contributed sessions inventory environment $XXX planning reading business better to liquidity down the net unit each project to was August. processes, improve approximately to Inventory during improvement, sheet. year-end outlook We ongoing and to meaningful leveraging progress million, to inventory, balance in and third inventory than business supply expected. the year a decisions million, $XX quarter. our new We now and this Shifting debt million last that the chain react than with We XX% over made make further for the delivered $XXX weekly

to As assets it quickly will sell moved noncore that debt and pay liquidity, down. we relates have additional net to accelerate debt

proceeds $XX During cash the we sales. generated nearly million of quarter, asset third from

leverage $XXX liquidity As with and from quarter net bank-defined QX. ratio X.Xx, million of of a the ended $XXX result, a debt slightly of million, down we

expect And Efforts expect leverage to sales, proceeds approximately approximately an these assets net transactions of now defined $XX $XXX bank debt million and in year-end that of this continue. from we additional will year. later Including million noncore monetize asset we close Xx.

company. comments. the an impact the help a initiatives by from that transformation accelerate savings cost and from to the we outlook the profit his August, led is the update operational improvement office earlier of outside internal we the teams, the in provide rest me XXXX, of work on including covered work stabilization This Chris Before set comprehensive expanded let experts. cover for In being with of

addition launched new ago, and a organizational company's deep work this now future cost the to global the design, year includes of that structure a In assessment model. initiatives were operating

greater already is improvements in ongoing, has the for expected resulted but This profit business. work

$XX including this As we estimated $XXX now benefits summary $XXX expect expected an XXXX. incremental million are an listed Chris initiatives, and annual to of savings below. be in incremental million million recognized these these mentioned, from A of year

of synergies product, earlier Supply of chain design related the of cost costs million, in lower footprint benefits savings costs, integrating from improvements and changes logistics SG&A U.S. Further global organizational indirect operation the $XX and our the and freight lower to including company. cost of announced Sweaty $XX savings the million, including other million $XX redesign Betty consolidating Europe, further the from today. from

business chain In platforms improvements, new a these expect trajectory needed transitory operational technology reoccur. generated innovation our investments then benefit future to reflect to supply $XX fuel XXXX that accelerate and results in incremental creation, the cost will from anticipated are growth costs savings and brands. of work to talent, not The efficiencies from addition and will also we profit the this XXXX stabilize million demand

Chris All reinvestment part challenges business needed XXXX planning these our address core earlier. brand that areas directly being of summarized level areas process. timing performance considered as The is to and quickly in carefully improve of the

now the improved we cost current XXXX. committed to margin to run cash While margin in we lower longer take in expansion of rate an to remain expect it XX% given drive and flow the structure target achieve may this operating near operating term, meaningful

transition fourth outlook XXXX for to the me ongoing let quarter. in Now the the business

the our of Leathers Wolverine adjust and exclude ongoing year. during for for Our Puppies which Cat all continues second the guidance to the Hush for year reflects the licensing business. performance expected of the results half transition for and

approximately companies continue closer many XXXX. XX% experience alternatives Sperry, demand to low those U.S. strategic we represent for and in other to results industry, our evaluate wholesale businesses. our in European outlook included and for We Like continue our of to in the are slight which more they months, season channel placing much are order recent brands company's seen global performance but upcoming revenue. and orders need. our and in inventory a Over volatility improvement the lower sell-through demand holiday have future and

decline of second we We fourth experienced XX% performance decline now August, be XX% QX, contemplated quarter. In mid-teens. approximately wholesale down project a outlook a our half in global the but to in of

our Merrell; negatively point across year and point decline Saucony; In private earlier has pressure end-of-life the been in excessive in gray and the addition segment have important environment, U.S. of height for color promotional price related an also sell-in and and these brands product increased market brands entry selling ongoing to pressure soft lack of temporary portfolio. newness; heavy a which macro impacted missteps trend distribution in factors: created product by category; category the for market; the label work in an the price vacating from certain higher

mid-single-digit just expect we slightly these growth $XXX to QX. Based midpoint our our million global than wholesale revenue to $XXX business, third-party down in in we fourth in We compared and business our last international the expect decline on for factors, QX. million, down DTC channels of XX% now Outside to lower QX, be trends XX% of year QX. and quarter at comparable expect mid-teens to approximately now

million now efforts liquidate QX distributors, sales lower drop around by is to targets. a higher approximately impacted achieve higher won't that reoccur supply international $XX to chain gross to next year. of costs mix be transitory expected significant revenue, environment a further of inventory margin Adjusted The for wholesale promotional holiday and our year-end to in XX%,

are is administrative slightly of approximately a revenue to from DXC now much higher due Adjusted expenses up be XX% QX rate selling, general expected The to QX sales. of mix partially in and for QX. expected

for at to made faster QX. optimize e-commerce results, investments and feel we've addition, consumer spend in benefit meaningful our QX for drive including new to sell-through support some will In partners that we key performance future acquisition sites co-op retail higher marketing

earnings to diluted per loss share a adjusted $X.XX approximately be expected to now quarter Fourth $X.XX. are of

billion. For be and approximately now selling general Adjusted billion is for the $X.XX to administrative the full to $X.XX to full margin XX% approximately now year expected expected XX% year adjusted be to year, [indiscernible] of the is revenue. full and gross be expected for expenses are and

The our work to has to the and business and are and to expected clarified challenging be outlook navigate year $X.XX along per the adjusted has earnings diluted continue the share conclusion, strength In opportunities. tough Full make environment company to of a our now the in $X.XX. range financial we improvements of improve way. more the further fundamental accelerated to priorities

to Profit improvement their Wolverine are and in Thank XXXX. priorities the changes we inventory the initiatives are for at entire to accelerating, commitment and the we our company. are team you to driving creating invest capacity in highest ongoing

turn to I'll Chris. back call Now the

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new processes sets Betty. we've through whom I'm are Saucony and have especially skill that excited recruiting hired Chief to today be few next in future new concluded demand creation will Sweaty modern of These our to weeks. Marketing announce for the talents Each starting Officers success. critical and for Merrell, and

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go. Let's

[Operator first Instructions] Duffy is Stifel. Jim with Our question from

of on your others guess you the a any normalized but progress. not stabilization? kind glimpses like been path know wholesale community -- to position. don't made seems little I'm more call don't plus are the you I bit to in for of I that getting has investment challenge I inventory Are about for of thoughts if partners orders. on good Wolverine that the a for if late. seeing share reasonable U.S. a the across you which comments jumped spring making channel it a the What's I a into just getting point expectation channel you're category. for some such on just channel, glide stabilization kind side, this some could Curious So

it's think about talents company, we And a critically great, encouraged of be allow a as Sure. our from well think Well, because can who add to. turnaround be in heavy right the across I'm I X work think as days the work would we've most an morning, we that the have lot and sort hit horizons. first, about to we've of I reports I and the who important of brand tools U.S. channel, question. X think progress to growth. other on of industry an of the thanks, fraud in the for we go to very stabilization And a the wholesale with in from was wholesale we us those as by U.S. of I needed aspire That work challenge an of it organization. is for Mike Jim. pivot standpoint, now then and issued. it we needed noted. certainly short were the last on. release are and where sort time along to point release pivot time done And great I'll our standpoint. about that. into investing organization there's the XX appreciate is inflection lots And to capabilities there's important there made channel us Certainly, then we've leaned industry tremendously period we we the And this and detailed to There's the certainly the is builders. transformation I Obviously, of really, think from certainly the and

then how are, in pieces actually So performing. partners. in closer Hopefully, things to how our are that to where I'm sit those in working the and inventory brands through the we're those of remarks, channels, various where get prepared much channels. looks our sort understanding came

and is sort of inventory that of spent XX channel critical the we've help liquidation places relationships stabilize in business. both time lot standpoint that channel, partners. And inflect sort important of of the through importantly, the about a working from of wholesale key then that the some U.S. our to rekindling in piece our own growth. with think I X days, a assessing issues, So of investing addressing is a first that Talking

channel you the think It's point, performance of channel that for I assure are leaning we Jim. brands. and will critical our us, I So hit to a you improve on that key a into

to thing order is mentioned Jim, add I'd And retailers need buying in which to closer the my book, that I comments, the relates is now. that, it so as right much are to

visibility the into first QX. is we in the had to So QX the half similar into pretty visibility

changing say about the to And much. trends going so first million last aren't $XX that is order What wasn't I quarter. Obviously, necessarily but would margin. of that's year, in low repeat in we really the sold product end-of-life again, not

improvements and So start about and $XX laid sell-through the profit improvements business, talking anniversary the year to about, rates in improvement we're we we was incrementally the quarter. that hopeful the of that's around in when transitory in that. channel to will next we and we've terms that expect million year. stabilization achieved part those not and think the things, initiatives of That's out. business going cost first first as our about the Chris plan of accelerate away profit going that seeing achieve the But be But the that, health inventories the more to we're to going the of

profitability the to from standpoint. sequential So improvement really P&L a Inventories cleaner. be feel we'll much going see are on like

I sheet sequential remarks, that of give from the standpoint on. so our improvement year nice in to the at and under metrics us are in think, things going we the to control are So profitability start that a and prepared mentioned balance length

we absolute more we'll XXXX. in to opportunity the talk wholesale the focus And So U.S. as and we have Europe progress more about for is think as teams. the into hopefully, make an here lean I

as bigger a just it's sales team more wholesale distribution appropriate of your appropriate going this look across abdicate in interest are the your broadly Chris. And picture forward? strategic question, building encouraged a brands healthier you distribution. Clearly, and off-price fresh distribution, had to you But year. you legacy think elevated perspective that you any good. Very I'm on the of do taking

the a great you I it's assuming sort question, I've point initial Yes, towards that of Jim. And since made observations share. the back

And to on resilient new better not it we better the a more to managing just brand to that then that managers, have organization. pushing us a be and demand, on us ultimately covetable and how supply job do we critical create for sell-through have brands is go muscle pull model better as we sell-in. a protect distribute for who think become certainly But from build just critical will we I in versus to evaluation brands focused us. brand we managers, And marketplace. that an and and that's have our we

where an So you taking Hopefully, in we run protect do here as a those How and for future. is But how want moment challenged future? are take know say, this to the new to a of how brands transformation we the step exerting it do moment our things the certainly we're manage in to in organization and to are trying business do marketplace. And protect we back the honestly, and brands as our grow to us want well. in muscle you appreciate environment. we can tough all then and our brands

things those those all and I that. table things So of those -- and be the we'll picking are decisions, all appreciate up on making you on

is question next Paribas. from with Sales Our BNP Laurent

very that, wanted that says would the looking point. bit? that at press on noncore press be with to obviously, some regard, to you looking But Or brands? just are release, Is that to regards buildings at on that helpful. can a assets. little Maybe release. it says Sperry In you're there you're that other to also to you're any unpack that it I sell? color looking up Any the follow sell

with the well enterprise, all let is to ourselves, the I announced Sure. everything. offices. transformation, some we and intellectual global the we run both Worldwide. we biggest have across we And we of think at the I'll of property. work think product I'll specifics. We're evaluating we stabilize business, for how here the we do at company, work and Wolverine work would differently think standpoint. open say want Mike complicated run see our across the the sort We're where go this with cost-saving be office effort closure of brands we're do all is give then we certainly, that sort emphasize is we alternatives goal back focus -- as options. previously company then I up, things a And to period the underway. biggest importantly, the our of consolidation and business, to future stabilization looking that but We've can innovation pushing needed want of modern in towards brands, how importantly, more and is those things. really footprint, demand effort opportunities. our where previously on But this I the I seek That do How also a to announced of do creation. sold more underpinned some really efficient towards And then plan do to is less of all I a looking Sperry. the from And more more

of as on in say are Laurent, the the chair, this to total, company want in consider table would I now been we chapter everything what we to get and right we next where able is having So be. the

hoping our Laurent, and the that's still portion were play, still move more A in the of through little working to we fourth that earlier non-North business, specifically, we're quarter. that in American bit forward leathers we announced

around we're sell real We did Puppies of properties and in some that some looking also We an some opportunities meaningful. to the transaction and some said, different Chris some we're monetize. brand. that, that and real in property, estate But have smaller quite And we to the important to world. markets Hush are China is at as not table. for looking as distributors opportunities similar one with sub the our on everything have

taking prudent we're these way the think a noncore really approach I monetizing assets. to we're

you in the more on does the annualized Mike, million? noncash goods million of SG&A then expect across charges point, $XXX the you of versus million of cost just -- $XXX first savings of maybe then second that Super second sold much this charges can materialize? question, unpack the as with helpful. for XXXX. how in on regards you cost do that half? you savings And or half kind $XXX or to And cost meaningful some year When cash a lastly, is maybe can this expect Do program, it

a portion year. the is million of $XX $XXX million, So it of large recognized this

things, synergies importantly, just been gross time. be to brands primary to and as ongoing capacity of savings related structure. benefit going Europe Chris announced getting America meaningful things. $XX So today more right We from for for That's earlier the million then a XXXX. and and about. in our incremental And number put the in that's the of and different $XX restructuring and workforce. in that million $XX the form behind benefits that and so. teams benefits XXXX improvement number And time chain There's a the that's incrementally some of is underway from comes profit about creation But going North benefit other margin pretty that create be will today in SG&A million to our organizational that's that redesign product impact so our $XXX million or our and cost $XXX million meaningful talked other more to That supply focus to that's work another footprint cost a expense of 'XX of that on co-locating we for and and we're recognize including demand been or quite of terms create away $XX in how of drive some we million office. of negotiations reducing have to in other work and the as try we're capacity, continues our some

early IR the some those summarized also is 'XX. of that I highlights. chain not deck, are are the million going Laurent, want we expenses year supply year. $XX Those this to next in incurred kind breakdown too, of transitory costs to our about 'XX some So again we and of mentioned for extraordinary that's the in anniversary -- you also the related of late But to details. have see if the

QX. phasing in transitory to quarter costs first about about of improvement profit question initiatives So talked the answer your and and of $XX in million and the number the the between we similar a timing about this, the

strong laid year improvements really in the out. and really, work So that benefits early from we've the

Seaport from Kummetz with Mitch Our question is Global Securities. next

housekeeping first I guess in somewhat nature. my one is

You X guys quarter. hoping that? fourth that you are update by us year to thinking or could was full you the your for How guide about sales had I previously give given brands. key either for maybe the just it

Alex. is this Mitch,

in of deck. deck, our -- outlined have X Page we It's that We that. in IR

the just stats there. fourth Let's mention quarter

Yes.

Merrell, and at single-digit teens Betty, fourth high decline. mid-teens looking for for . decline; So decline; XXs decline; I'm quarter high high Saucony, Wolverine, Sweaty a

important. kind sounds as lot you're the And on because talk the you now you That's bit obviously like Okay. a a the line seeing I is about but of sell-through But of can product well. it sell-in. in what mentioned like that then, of some is guidance, of some right of of mean bit helpful. your a terms sounds self-inflicted sell-through macro, it they're versus it both Chris, little revised importance

was could So I hoping that. you address

Yes. I mean, address sure. I Yes, will that. for

things here I more focus things the weather marketplace, what a be of And can be on things about reacting sitting the lot you'll on those better. us in can And it's lot is we some student we a factors. talk certainly, But we then of once challenged repayments think that hear things to we're all we're but of loan about better. we order, or in a talking of do we're get probably do our channel. We focusing macro in news. the There's could what really or could do choosing today. to

across colored trend-right, to things for not price, on get of products was establishment help announced say out firing X brands an think comfortable, portfolio. as we cylinders haven't year ultimately with deliver think right this we us, innovative, of is much organization our product right from strongest why to I the we're an product. as have had all for it benefit a And which organization, standpoint, I the it's awesome this We that different. begins us Certainly, brand, certainly introduction the seeing place, marketplace. And we right that's the in And excellence today a really some And of is build us our a we consumer help as are all amazing, I our marketplace. to and there. new the going bit green center us tremendously products. to little shoots closer of would

heads and Some the is some checked, say world, #X recent But our in we think then are actually we seeing I the certainly and hiking marketplace. Saucony and organization, which pipeline on build in can brand and have sell-throughs heat Merrell, good introductions improve the key would at that both we're a we for of total, ultimately we have focus encouraged by by in I we're the Moab to a X that. underperforming. drive drive to work certainly as And up, stabilize what product do the partners.

pipeline this in able to We that SwediBetdy, critical. we're our I'm those that takeout and towards what brands, we're improvements in that improved big benefits is which we're of And been that. as brands, encouraged as of cost the we're creation, see historically, work divert marketplace demand where the that products, XXXX think that for to full our those be then Merrell, we're Saucony, for early reinvest creation certainly we able So thankful seeing those you, assure product about in and be done we which to an in ability I demand so work things But why have good out started really year is reap for that is we engine more by. to funds focused especially are the can on. the our Obviously, seeing reflected we've not going and XXXX, guide.

maybe a just opportunities, mentioned reinvest. on savings real cost significant but of to lot because quick follow-up guess you've I you need that a just And the identified

You of talked should your some brands. in redeploying about and more the How prepared we in remarks. investment think into sort the that savings of about earlier those business

we're handful Yes. and as this the to improvements the we redesign as of we this building our big we're work protecting on going reinvest. make growth that to weeks, as And XXXX we we setting about plan, really did marketing want dollars and see, And work. were last over need talk the our very I we our we sure, the did focused are savings to engines brands as cost aside

we're about about holiday we investments to will get We're think and how cultivate talking we're XXXX. have we're investments get better spending and on We're that own channels I this buyers better of wholesale as the as performance year still how liquidate our channel, our U.S. faster on making our incremental across direct-to-consumer help inventory spending marketing how quarter, engaging brands a this So and again. to to performing new brands key us wholesale we're working both in move sort in those partners our then things. with moving

But probably the little from call effort make have we we the is of probably that one of we And restructuring hopefully, that much think and I was So impact these stories. And done to brands, than some invest our encouraged We fundamentally fiscal will in earlier the to late, did. the products, everyone cost going want frankly, this will of takeaways the I'm things to driving a amazing should a critical. did XXXX, awesome have now. we're to certainly They them that that capable isn't by. have line. back year business. just sure saving I which go know full I of effort But then bottom

with question is next Abbie Piper Our from Zvejnieks Sammer.

some Slide aspirational Investor I'm X at about target. quickly just looking growth the of of deck the

what making in a back get just understand you're anything point? can seeing today I health group, X% aspiration. you I What that growth. to that that you seeing brand for but lot you investments today guess, So this brand That's like XX% in like products, financial gives active to there? you're the building and the long-term confidence of with out of the lays confidence revenue that a gives

I start. in history active talk I'll Merrell, the the start XXXX with sure. brand, best -- biggest a about coming brand's group. and Yes. we'll year mean the difficult the I'll -- off mean company's year is in and XXXX for of I

chain X working that. the that to did of And now coming had crisis, to the some of. relates other year's the market we've biggest under to quarter, continues problematic. #X been share the that We of But brand of as transition are which pressure, share, perform. put and not think manage manage out certainly though, supply last transition category outdoor, ourselves how MoAb MOBI pressure gains. challenges out the Merrell's we pressure. a is that well, under in has a hiking goods of world Really I is worth it Encouragingly, market of we're than though, the the lot Merrell right Moab self-inflicted.

In fact, it's the tracked worst-performing as by category NPD.

standpoint, wins So At brand healthy. very time, is there the brand a headwinds Merrell. some the same think there are for I from certainly

a We place. product CMO very I joining mentioned well. the feel the have begin new as have I team next good in year. as about we company in a pipeline good we

grow talk have trail green move piece. height resilient be some so seeing become is any we about category. and beyond have ultimately, I functional shoots brands and And dependent environment, just are in footwear. core that being run, important that's expand when beyond can dependent to But We better to we that which less an upon in

drive category some demand. ultracompetitive. there of right players competes now most competitive of it's relates and That that Saucony how to hot phenomenal are really arguably we As brands. category, to comes our pipeline all market Saucony, very the down that product it in a in than

coming. I encouraged have the by product we think from XXXX Saucony pipeline a perspective, in I'm

for the Hurricane New Triumph XX. XX the Ride the introductions Guide XX, and

year. to Saucony big TriumXX, running market pickup halo balance the behind when opportunity actually actually have then those Sonpony, runner. a nice focused elite has a progress hit next of a brand. little to the We see though, too we for programs the core runner and bigger as our think investments and brand. a that by a encouraged there. core core -- maintain product saw open channel to when a been aperture to edge we we've and on an with Elite But was for year, going much You're bit. the the I'm effect And And and this there's really certainly I ultimately, right there innovated

results. And think from Betty look a I Sweaty our you at certainly, standpoint, then as

pleased handful made over think by last really I the we're turn has of months. Sweaty Betty the that

really well, Tuesday, seeing retail have brand a driving and We're company, core And sit of performed analyze team outerwear then every last of new the we in sort a fundamentals. nice We and week, categories them, every leadership we're how like the a there. new of everything what's products. pickup to And sort new as with to retail there in which happening visit excited the premium points categories, seeing get price and get for to wait I'm plane wide-body a into London I ground on the and team checking, to by. Betty to Sweaty see Sunday I there. morning fly on can't

in plenty active now right So to by we're the be about I there story thinking certainly about. total. that's of a bit looks about challenged optimistic as group think it. think things we as It's how XXXX, different little brand. it are at But

morale, the I one like kind know was when everyone just seems you of it like all joined excited just we an On made. changes stock talked And I Chris, about given helpful. was the more, price. results, mean, Great. hands, had and being that about the really

the morale you've team? of the that everything. you and a Can Now of just round had talk about layoffs

another after in here culture up and There's world. doing going you couple with There's we at list, XX of turnaround we're a in going are -- that global of X I things really care my a with the been stabilization Yes. and Great chapters. very with the hall really question. a that all transformation I've People are the teams in we're a we're minutes, we work. to the think I clear team. And hang around top most. work to the finish, about and minutes our of it's turnaround associates town

we the the of the We hard as the day in for We have some both of couple just And with coffee every teams And with I'm only We've most the energy after go Certainly, is survey team. get way in of now global through now restructure hours communicative. around do. is work. company's hours, And are over weeks. have out coffee difficult we of back of decisions to get an this completed to what virtual internal have know was we been yesterday, that we make. with a tools But doing potential I do part to that pulse right the an those world. along the go the our the company work. know teams think had person we that here, there what is to

navigating we're pride for the But is leaned super change we're through. team resilient So from But same and the of They environment. I'm take all the extraordinary brands. team the has X months of the close to better days tremendous that bumping transition very the current teams the the their here. time, company team. saying certainly And company thankful to. XXX-year-old last out to staying a has not lead the thankful the the in in. is and at asking that this very months, X I'm situation a been us team. to the to lost it I'm In in go fact we're into this and very anyone something way close

with Poser question next Sam William Our from is Trading.

what a -- major your Chris, need about push you doing. push So working sort you me, accounts to -- for you're pull excuse to with from talked of model. a get support to back about model, And to model everybody to the talked

to out that might then to very to there moving But sort model allocation, you're of the just might well are a do out take get sound to you know going -- through isn't come get going. product today, way cautiously do demand though figure stand I even like going to rather what of And where very to year certain to at take get mob. than how to -- a model where is and that sort demand given pull that the you like through that really you of things it like think you is do sort so Now pull counterproductive really forward can would strict back shoes next have you how find what beginning? pull have because

manage how we're about on lost what X years the going question. us. brands and those certainly of and Certainly, a not to And about Sam, Those take. or the brand the over up we've the are things model. future company is talked to to Wolverine Worldwide a we've ultimately to And time. that mysteriously great efforts we where from somehow we a do. not talked want to it's certainly, our be I've envisioned and pull saying lot good going That's builder, has Yes. go are now the have No, take that things managing quarter and a we and created get wake to global But a that to marketplace.

those portfolio. that seen reinvesting there I'll a along in our approach Sam, expectations the can And to to work I you, profit things that. and of the and we at have, being And so We're our brands. those think that. about I've are are over them Merrell footwear brands. I of Wolverine We're a approaching encouraged the in growth, to they we we come improve same some why when us for privilege the cautiously. are lucky. I in great quickly we reassured. assortments. relationship finding achieve us Cat time, on we had same the the way contribution to cost fundamentally a days, talking Wolverine they the that have, the we XX talk about certainly, of portfolio, -- the And by talk brand we're you've do time, things have I the #X for help At Between in the portfolio structure to strength that the strategic tell and and that their places transactional. and building as we think more talking partners, outdoor The easy think lot the about ask a talk brands, less balanced brands the the that that's last the world. consumers hold and the

But or happen future today is think for approach. that think not us, that think going quarter we're organization. That and I the charge it's I mission we for is And is. in X. certainly ultimately the what a with fundamentally, to starting Envision the So

revenue going the gray market, measure demand? from to this mentioned, in take seen more back market One, other doesn't significant -- be mean, right back I -- though margin see excess cut the then the Because with -- happening that have a prevent some that as those goods X -- product something like how to you get I how decreases you on goods to to Doesn't of mean, few to mean some that follow-up that you're sold again? XXXX, on almost that entire health that and gray do And brands from -- prevent things. do might to be down, though margin you ended to that in just to you I year revenue -- had have improve secondly, partners, situation gross the means to situations. you if distribution We've as well. quick more the will has what that. improvement for up talked are somebody brands? a you do you going to even Or

of view seeing what building operating the sort But the which of dramatically the progress SG&A a what have building not both Yes. which sort improve to and giving from the work. Good what and all year, just an do from plans in what growth we as gross we're in the anticipate on of standpoint, work position frankly, on, standpoint, portfolio and models, made in profile our margin the drove over low go last both sure tremendous we've to to of is question. handful we company we horizon, any a guidance margin our standpoint happen best due to of from XXXX. we're the organization, the We're XXXX margin to months as

operating as yet, cautious viewing there how of bridge is And achieving building capable of consistent mid-single-digit company So really guidance I'm plans towards margins to we're growth we're We believe in and is that. and 'XX this a a viewing approach the but no revenue year. a I XXXX 'XX. mid-teens, of think the

issues of market, certainly those As of of extent. our the of were right better action some existed seeing how we're consequences as it sort to actually COVID. then given it chain and that monitor supply for own obviously It's of today, and manage how we we're us violator brands both with sort are. a things result worse that. partners and challenges certain resulting gray relates in that our our what about some inventory DTC have taking to And the But is then direct plaguing And performance. also that now find we a always very from wholesale when a the manage I'm aggressive consequences feedback we the how we And getting do that. the

So brands. Sam, companies you how about a talk lot manage

show choices to allocations builders. demand. make managing through distribution that certainly to about day, and But then it's up we great day critically think brands supply ultimately how I our important brand becoming

Our last question is from Mauricio Serna with UBS.

It compared largest you bit if a that reselling a touch Great. maybe X the seems shape in I Saucony just Merrell. on wanted better to is -- could more to brands. little

provide just in demand could And you do more inflect how you brand maybe than are is you could Merrell. -- that 'XX? Or about like facing doing headwinds So a I'm sauce bit is that, believe a than think a do relatively details that that's Do something better you little perspective. from challenge. why that think

And that also slower QX really year? revenues decline next next know the on expectations little to slower $XXX for a taking the growth just then on lastly, next the wanted margin, not you year because XX% guidance year, get how Or Is savings up about dynamics fiscal I just just about understand is happening a I in for And longer bit there? when I reflective the for of again. to million actually top for we see to Sweaty just operating QX line think Betty, so year. top the should clarification employed were margins XXXX? a line talked of happening a more margin EBIT for point

Mauricio. Thanks, Yes.

best of there, we'll and add on back then questions I'll operating then I go At question the margin balance Merrell sufficient we between be -- lot I expectations but long-term to answer higher fundamentally interest to balance the shareholders. catalyze and a thought. back draconian X brands more of not growth. That the our Obviously, operating achieve investment would and first. and find best for feel year, Saucony operating see of we hit good year. can modest XXXX think expansion And margin the to growth I and the could we position margin we than would at I'll in it the a our not X Mike be and same them and the same turn for portfolio. best think and couple there's initially sustainable time, a time, Sweaty Betty. that And things what do ultimately to brands currently our a will for think in company, have the as Mike. next certainly,

to So that product we're At level investment same we know going we to good our greater the And got updated. behind be a brands year. We fundamentally creation. the feel then can modern about demand we time, that of need that margin walk we've that line know tools innovation, next expansion need deliver some operating closely. very

is teams our hard for update our to We for hard engage. old. It's manage. platform It's consumers very have our to to e-commerce

some interest organization the are to long-term company. in make an are investments as prudent need there that So fundamental of that that the best we

of sort finer run XX those and different quarter category operating categories. on in X on the up. it brands Mike run point I'll talk relates can Merrell he and question. trailing to turn that about and months, to a both some back and a margin then last Betty Saucony, put Sweaty to As little then because bit it questions Performance is the growth you operate specific have in

In the NPD of best fact, one tracks as categories it. performing in U.S. the

only better of In much, fact, off slightly coming base I think of to pandemic. the much dress is and a lots off related of smaller headwinds

first is product brand. of interest that brand some to relates as pipeline is Saucony. We in think But the win is with Saucony us, for standpoint pipeline the half see around different long-term that the And of category. playing year decisions probably the mind Saucony growth. Saucony a I running are as think before, it that then strong. and a and heavily share So think to dictated how product said, authentic heat product we we I green competitive good And And XX the the the a for wasn't given in the fantastic a great, I some to in exiting just and I like said think of by mid of Ultimately I really then closet year franchises it it's for of best share year, is. the shoots from a core there's to Saucony such pipeline. And Triumph believe drop sort consumer, reasons back how like I part product do greater next introductions.

flip and the pressure. toughest On year, Merrell the down just there's Outdoor side, headwinds say sort a is digits has that and in operating been double is category. past for category operating the lot We toughest tracks can't, of at MPD Merrell as it a single call the day. puts however, of

over fantastic product barefoot resilient We innovation him. products. some that incubator. with been The the The Agility XX% merrell.com wrapped which are have single green beyond will And Terran, And elastic to more excited that just her almost lab the allow more storms inevitable casual out which X like very us a essentially then the X comes and no that actually Peak good play at is are lifestyle a us new summer category We growing sellout that. brands there that of some come. with to than is shoots. are shoe to launched seeing buying fanfare endure really We're into collection, gate categories about strong. can down a has Merrell more build that we durable test

success Merrell's beyond our of So critical to is sort the move the to be core ability in term. going outdoor to how move long

what's with happening strokes think happening we X Saucony, channel, happening what's I we couple So in to have their big in say to deeper go at what's sometimes reality, a layers in Wolverine broad again, say paint and what's of international happening brand different it's And a the and they what's strong. in me, their still the Merrell by world, talking channel? of I time feel then their happening in category, too. what's lot very spent to in partners, happening is

some We're a business. to it have But feel product better the beyond I about category. good think do we going they relates core right now building job challenges to just ultimately, the as through pipeline. that

dependent answer we're And tailwinds. some over to Betty-specific to the Mike questions. Sweaty upon not So of then

in we prior a Sweaty Mauricio, versus the had Sure. in wholesale QX, growth strong Betty The performance year. QX

in transitioning Some of year had because timing that ago that actually business. was really a issues we of some

a QX that's each side in growth and the affecting on quarter. rates QX there's flip between So those wholesale

of the the that that year. in the thing reinvestment, XX% are I'd is thing QX half slightly outcome going despite require gross less brand other line Chris of here business, The than The but the back little much magnitude comments top Betty the performance not a are but the areas say much the lowered business QX think year is Sweaty different better, beta bit the much but just business to the reevaluating the I healthier in healthier. a only promotional pressure, it. right year about margin definitely we I'd this add ago, for is of And a for to for mentioned

things about for there's platforms that systems mentioned our talk some creation we Sometimes processes, certainly the e-comm we're we of those and reinvestment investing demand in and and business. of PLM planning new into, some innovation, fundamental terms but new

and give after that those the that going to going really is get evaluated, but of being year. we're early phase extent still to the So critical we're those is the that timing in in not out, place we the those to lead that to benefits ourselves in the half year. see that the can get need going sure of make time so back We're the we we things

business more resources said, to back in need we of very consideration 'XX. we and but when lot I the that's to the inflect needed the reinvest room to as year, a So all for to of the kind and the under we're half into next business serious ourselves invest giving how back we as rethink need plan

for are to time. floor like comments. over There at the this I closing back Wiseman hand to Alex no further would questions

everyone us Have to today. Thanks a again for joining great day.

This concludes conference. today's

time. for your Thank lines you your this at disconnect participation. You may