Wolverine World Wide (WWW) 21 Feb 242023 Q4 Earnings call transcript

Greetings. Welcome to the Wolverine World Wide, Inc. Fourth Quarter and Fiscal Year 2023 Earnings Call. [Operator Instructions] Please note, this conference is being recorded.

I'll now turn the conference over to your host, Alex Wiseman, you may begin.

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

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could of results important SEC risk that a in number caution filings company's cause from in press differ and factors the result, there materially These a factors we must identified are the statements. described those you in our actual forward-looking As to are releases. that

over the said, Chris like to to being Hufnagel. now I'd turn that call With

line guidance, and and close finished you on our revenue our with thank today's everyone, Good Alex. in anticipated. for at call. than us To inventory delivered and we we earnings XXXX, morning, Thanks, better joining levels debt and

continue progress to and Wolverine driving transformation. turnaround make we importantly, More in World great Wide's

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clear and growth, to and on stories. efforts a footing vision, amazing designing reinvigorate accelerating awesome brands firmer are telling our focus squarely products With their

follow will we are our inflection improved expect we've pace top with margin performance. improvement outlined, our moving brands While drive the meaningful to to great line growth

on Endorphin proven has performance shoe the innovation, partnership the for shoes brand and human was industry-leading Elite most collection innovative Gear by today its market Runner's of among Saucony Runners XXXX. design of as in Awards is Year lab formula best with recognized World Elite the the and a the driving racing

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with rigorous Skyfire runner to World Elite the a of lab named athletes that ISPO, shoe product The testing test was Runner's innovation history trail Matryx, as in leader is Merrell received running innovation. Magazine's within recognition incubator developed improving industry trail-running here product plated outdoor show is others. super Best of with XXXX MTL Its and lightweight Moving well. a Outside The product among Merrell. long and footwear by X and a pipeline

design requires. shoes well ex-regear traction more is the as in up outperforming demand Merrell triple to X reviews, continue digits uncomfort that and the the consumer as marketplace in The and Agility year. Trail brand's and to and intends right leading the durability through trail start is Peak consumers modernize faster, fit trail-running the to trend quality that

the quarter X, greater the a with and XX both QX, Hero year is million The in new for piece. The share collaboration a year grew share also Speed brand and to in hiking exceptional, strong drove out XXXX in winner ISPO market Blue The our U.S. impressions fourth trail was key product and sell-through. market gains sold storytelling momentum. capping drive Color earned brand's plans this of Moab early Jeep story brand. is award seeing to the a Merrell's scale again Merrell largest it to

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excellent is very down in well coke. outerwear, new with layers Cupid QX, by as nimbus and and categories traction in parka double-digit mid The strong with driven accessories extensions seeing sales Navigate growth the brand like by

and important consumers seeing to We're product. I'm heightened to the have shoots the the will our the their always here business. business product build expectations a today, say brand's that momentum and for for pipelines understanding business, encouraged green starts set clear our of throughout it year. product vision It's pleased across pause direction. near and In a their and with brands the

we year, much more strong be expect business cash generate this to again, and Encouragingly, flow. profitable the

to actions so done financial driven months. and and the have significant has effectively incremental by our our with margin reinvest initiatives the an in As created we've in the XXXX. million the profit past, expansion proactive aggressive model At our executed time, in improvement past planned wherewithal gross same brands, over few $XX our

margin operating it to moderate in growth, this important will to an investment Although still position better our while is expansion brands step essential improve we for sustainable our year, believe taking long-term this transformation profitability. meaningfully our

expect variety to a reasons, growth the our lag of to For company we return improvement. profit to

you various pipeline consumer distribution owned recent brands candidly on address reenergizing calls, past product action heightened marketing trend swift we're with insights, taking the missteps, identified discipline. earnings and supported by shared our managing marketplace better with we've As the with and strengthening and design we've with elevated them, pricing greater and to

as year is from we most challenging results, Saucony, Wolverine, the a meaningfully for improvement year revenue a performance will by position, but anticipate However, the top weigh year business on and the progresses. starting sequential Merrell line followed in which full

actions in with selling, inventories, in be our second better half the lapping and and the partners XXXX. growth by global year half will while in expect inflection corrective accelerate contributing to comparisons, the reduced positive We into and rogue impact further second easier year-over-year acceleration alignment the an bolstered of cleaner of

the I and today are before we're handing summarize where where call we to want Finally, to headed. Mike,

manage bold and business has Our the our simplified to strengthened the the of fast actions and alignment better portfolio organization.

have have continue to all live great we forward, to a their create Today, greater will developing innovative of lives. value. to as Going of a rich part commitment authentic organization consumers products, we designed evaluate critically that shareholder better brands of portfolio help history focused our our

trends, The our marketing providing and by consumers, enables extensive structure an amplifying are value activities. competitive relationships by wholesale model's distributor insights, model strategically for and the deem drive brands efficiently we further And consumer global composed brands product licensing. and capabilities creating on of to our for operations marketing platforms office that to the by also focus network Wolverine improved distribution important aggregates back we brands leverage. on our innovation, Our advantages

our collectively potential deliver as enabled talented, Wide's to steps with Wolverine. of World our of moving combination what powerful right and the dedicated shareholders. unlock Wolverine brands aligned confident for are and all full the our platforms, on about achieve the we taking value optimistic team I'm Given and can by a pace, One we We're benefit

With more our the year quarter I'll call will guidance that, details on the and Mike our fourth Financial to Stornant, Executive and Vice who results turn Mike? provide Chief over for our President Officer, ahead.

fiscal channel I and in by Chris, on of will was with ongoing to our approximately fourth outlook margin call. Thanks, everyone to business the review $XXX.X for result. our our million with outlook. morning start Fourth gross of This results, e-commerce with a Adjusted morning, margin was of better this good quarter XXXX. gross revenue followed our expectations for better than line XX%, helping drive in our of XX.X% quarter

full-price of expense deliver channel consumers. tested and more than XXX,XXX includes sales marketing of acquired SG&A XX.X% us holiday or season, revenue investment e-commerce Adjusted nearly which $XXX performance incremental new of during million moments $X the of key helped million the

supplemental for $X the deliver incentive a to This better-than-expected nonexecutive important the tied million quarter. inventory, and program for helped in team net net metrics. program in implemented debt quarter debt and us cash members also inventory We flow results

outlook. a Our earnings motivated, and was line per aligned the on share performance. quarter team with and the financial is $X.XX for in of focused our diluted loss Adjusted company's improving

is liquidity XXXX, joint were We improve Inventory to sold the held-for-sale year-end. which as made sheet. of debt balance treated our as quarter. and further the Sperry to inventory, during both inventory in Shifting meaningful net and venture, and progress January for fourth of China

expected. and more compared We these inventory by rigorous and to year million better a last supply than this nearly delivered a while leveraging $XX $XXX environment. in improvement down XX% management chain inventory approximately operating was Excluding businesses, process we million, predictable normal

focus processes believe at the pleased and While should times, planning inventory we coming we inventory further integrated productivity levels with us SKU heightened on during meaningful million drive optimize XXXX. shorter XXXX, $XX down to chain quarters, improvements least the implementation our levels can over of allow supply by in lead

to on unlock the our exceeding assets the of has management narrow approximately our Active a return with noncore opportunities. in capital portfolio highest focus Strong sale helping and and generated value focus, key also $XXX of quarter, million working management the businesses cash been expectations. certain

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

solid Let me X details The provide footing. over for work now on critical XXXX. the company our outlook on executed last stabilization puts quarters the

transforming of As focus efforts the back company, a on fully towards while result, an our driving more half teams inflection can growth XXXX. of the in

is of excludes ongoing decline performance at Fiscal This revenue the expected and our billion. business revenue from expected to compares the now billion ongoing Sperry. business, XX.X% $X.XX range $X.XX billion of XXXX represents the of in Our of guidance of XXXX reflects range. midpoint a the to $X.X which our

model XXXX million revenue in in These the XXXX. in include our approximately million JV of approximately to both in the weighted a in of $XX a model will Approximately to items half Discrete for including Merrell first XXXX. XXXX. business liquidation timing and changes, inventory $XX totaling heavily distributor end-of-life benefited that $XXX extraordinary million QX Saucony million not recur shipments $XX and transition China of of shift distributor international

would XXXX. Excluding for items, approximately be midpoint these the discrete X.X% decline

range Betty mid-teens. Active to expect decline XX% to is in expected is to Saucony in each year. range Sweaty flat. quarter. low decline of is expected to to improvement the second Group half We decline sequential with growth with Merrell low double-digit in expected revenue be the expected inflection the the

be the basis of company approximately range, high outlook the compared is to to record and Wolverine be XX.X% approximately up decline gross digits. XXX points for mid-single to XXXX. at expected a single to expect down digits the revenue midpoint with the brand workgroup expected We margin Adjusted

from approximately initiatives chain improvement margin include to the logistics Key product to in in and recur approximately XXXX And expensed expansion million of related gross $XX transitory contributors million XXXX. will costs that supply $XX not costs. profit

levels especially to In half headwinds that foreign addition, during XXXX, margin healthier lower increased back we by expected cadence of that and inventory will brand is inventory currency offset the This impact a lead promotional protection to the be expect in gross benefit actions year. costs.

XXXX or The and the $XXX expected million approximately XX% $XX general or range and profit structure normal expenses partially $XXX of incremental $XX initiatives, and inflationary by XX.X% includes the of are compared selling, demand from in sales. capabilities, improvement at other of administrative outlook sales $XX for to to increases. of of creation, million modernization restructuring for cost midpoint important the and million XXXX of savings offset organizational compensation of be million $XX Adjusted expense lower operating normalized million incentive investments million building systems

is to significant operating X% and to XXXX in outlook effective midpoint and $XX of rate range XX%. Interest to tax margin The at XXXX. be projected Adjusted be expenses expected be approximately from million X.X% benefiting year. debt is to last down $XX achieved from million, reduction other the are approximately projected in approximately the compared the

our per these fluctuations. earnings result $X.XX is impact adjusted range expected of $X.XX, compares in a assumptions, for exchange share negative As of in $X.XX currency diluted including foreign $X.XX to to a business. be This XXXX from ongoing the to

cash a priority Working optimization flow remains in XXXX. capital and

of of to $XXX We inventory. work $XXX of cash million through flow decline with Operating as the during least is to areas inventory continue year by expect free excess approximately expenditures. million expected range $XX to million in $XX the capital specific we at million

at to $XXX nearly million debt million year-end. net by expect $XXX to We improve

the our to quarter. outlook for Shifting first

are a noted of $XXX the and in occurring discrete revenue in QX million XX%. approximately of revenue model of end-of-life Many a decline extraordinary quarter. shift approximately quarter of in million, and our first liquidation expect impactful changes. QX $XX business includes first especially items in annual to outlook million distributor the XXXX benefited inventory international $XX in This million XXXX shipments that XXXX, We $XX

the quarter be projected approximately revenue first fourth XX.X%, similar Excluding would these decline XXXX. quarter of items, to discrete the

lower distribution to contributing expected margin is supply channel lower be basis XX%, end-of-life margin last to gross significantly gross the approximately XXX chain from all dramatic inventory quarter and mix sale costs, improvement. better year, of are a points up First

be to We expect diluted breakeven. earnings first be quarter margin per share operating X.X% approximately and approximately to adjusted

points Chris, turning call this away to you Before let summarize take back morning. the the hope me will I key

We including are of are stabilization ahead improvement, company's operating optimization, the cost key net schedule and innings healthier of in gross areas, in and inventory much margin of the phase late many portfolio lower the expansion turnaround debt.

at in deliver profit incremental XXXX. Importantly, million promised of as we XXXX to November least in of expect $XXX improvement

is that brands accelerate inflection half back the to for XXXX season transition capacity the margin for margin create gross recognize up into the investment of into company, necessary for to our and growth we significant of We sustainable a the year year to XXXX. in and consistent expansion brand set future. the gross is improved

We to are earnings systems, accelerate the and meaningful flow need for with our modernize build capabilities. our required critical cash important improvement balancing reinvestment and creation demand

And would new in for and cadence thanks now their global our business I future strategy. company finally, year, their ensure to to is the our execution pivot the of we've over tremendous thank work, to team growth. last effort accountability to ready to rigor the a like instituted and improve

the Now to back I'll Chris. turn call

company thank growth, decisive move global short be and about few many of focused the we've now, close past work I driving the over vision for largely way. energized months. World transforming builder our ability to their our and due XXXX stabilized They opportunities change. in new to a To And team teams brands, we're passionate by teams long-term drive global will Wide profitability pivotal delivering ahead. personally consumer-obsessed want proving the quickly Mike. right bold sustainable and are months, year, our prepared Wolverine a our winning. to and are the importantly, and their actions. fast, a remarks, into Thanks, on firmer footing our our few improved is On

for brands next we're and and day, our each equally great. amazing to through greater committed simply been and value driving be You've I the awesome We're storytelling business start and to chapter couldn't every committed to delivering great products, together. our building excited shareholders. writing more

morning. Thank you taking for with this be time us the to

comes [Operator of line Instructions] Our from with the first Baird. question Jonathan Komp

ask you just little a in comparability. detail decline a underlying want more next you the for I good did that impacting factors year-over-year And to just the first quarter, in the can impact I XX.X% of the of of the job baking ask Mike, you highlighting factors quarters? the talk outlined first underlying quarter, the about in? how you're several do the sort rate change improvement first year-over-year

John. Those that are Sure. of headwinds we number called important we discrete was are items us Thanks, with out year a a that in dealt behind the 'XX where remarks, now. certainly

I'll -- those Just a few reiterate of just things.

of most during put the headwinds of first on expect to that respect. We half that But through difficult $XX So channel The a incurred the of XXXX, certainly about a like half through that the rational the we inventory the company year. that worked a thankfully, amount the the that good quarter, a the we of headwinds, end-of-life we with. of of those in was but of million mostly inventories a promotional elevated feel the an inventories in and that in into inventory most job excessive our impact we way, related we've market comparison abate year cited those in about did cadence. first the will really of in that but entered first to had would of year, in that $XX year or negative million working and most

in simpler easier first licensing the about relate the back our in life. the joint year, the comparison as quarter. that for much be it end million Hush of in year, So a that the beginning to of for model started $XX I And to relates Puppies at or we distributor business change year full made of to we the in The that's the shift that half the XXXX. Those would model changes made distributor to we $XX million XXXX. expect venture

other going chain for network terms we and also in we are so the shift into to then And product lot reasons us simpler future. noted shipments QX our we So those -- other of quarter some last for first Supply are we relates shipped think some the revenue how business the distributor what generate that new to normally third-party of more cleaner, important in delays would product, profitability a that speak, XXXX versus to year. headwind, for more one in last models better, prioritize do. we in the but

that of important that creates we a go first noise again, kind but for all call 'XX, in reality of as in So comp comparison was comparison state the of I to think there. some tough more quarter. for us the really or we're components, these the normalized And a into to out clarify

the already year, discrete think we talked those hopefully, But $XXX question, when first about the of half about QX. on the answers HX. about but to important yes, these for the will So so I million rates the impact of in of are. year, growth think items half the of $XXX impacts million impact in first impact that the We pressure more what your putting clarify

like shape I or the about the Mike. quarterly just revenue the that's Yes, Mike as to unusual one per implying guidance, it looks a pickup year the for cadence. really revenue quarter going forward. you're compared historical million That $XXX to Maybe follow-up, helpful, think looks Chris, about pretty

have So really stage may investing profitable given little in be reassurance to visibility at a you're goal a bit the think internally? just is that growth. the stretching maybe more revenue you to not importantly, about to And going reach could drive you're that longer-term brands you I talk the just more

Super important. I'll start, and I'll let of Chris off. finish kind

-- the quarter for lower a typically is revenue business. quarter lower First a

on factors some have through So the XXXX. improve work continuing half that's last unusual. not in and and the necessarily impacted the that business self-imposed But to we're of factors macro of

it's still dramatically. although first we're that. some The improved We're quarter, through with inventory, working the second excess still and dealing of

of in headwinds some and health the first half in year, acute protection And going around John. the brand the are brand of marketplace be the more to

are QX continue health the could months marketplace of half the in improvement And and to have increase revenue new bit the but in and we're the the product product believe introductions year. those been product reason starting those the over kicking seeing by But and improvements Chris I the or that is in business quarter. kind starting a that. the beyond, little really that actions pipelines made So the a magnitude think linger that of X in and of highlights last with in the are first in to corrections probably in take hold, of to add new to the then some of

Yes. Thanks, John.

a it's and about sort of how number going of but half, we're business the portfolio about the of first in in sort and weeks are I about question on reasons provided the talked sort expectations growth half, second a first both ago and of shape thinking some do external clarity factors we're a manage the think importantly, how internal of there believe half. great had that that talking tempered we trying are we to it the think suppressing of the in the to forward. couple and I

product year. the XX, pipeline year good is introductions. of those it this XX, has product really Ride Guide certainly, pipeline. and think the to are a encouraged Hurricane product I we've XX, think the actions delivering, we're about than I Saucony was taken And corrective the relates we talked stronger by Triumph internally things And what all much Saucony think I as it last the the

think dropped. wrapped. consumers Agility some brand is X on good on similar, develop product of Peak just the looks When the X, different, reception, can then really good pickup really respond. on that, collections and around Merrell the lifestyle I Merrell that seeing We're Speed trend, Moab

invest also we same at in time, to our back So need brands. the

talked down. in this our into investments We're certainly and back tools. operating the about spirit year then go encouraging. the see cleaner and which half the back some the seeing this fruits to into ASPs marketplace, our think investing inventories, have in up. And constraining And of our margin continuing to those I of will We expansion come the brands begin year. back of seeing think we I is We're of just inventories

rogue attacking We are selling.

we standpoint, protecting benefit brands, protection didn't that. lack the brand I to and of do our we're got good we beginning think and from a see enough a job

frankly, of half just And reasons that, of called the that year then lap comparisons going to back for some out. new year some the the we're in Mike

the half year. the At there ability to the back of are question shape same that. the believe number I time, optimistic our of looking execute against the I'm business. understand the around So reasons at I think to go of a

. really color. That's helpful

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

the support. gross new that, hard of to I'm you of as going high. start yes, evidence see Mike, the of The an to say normal? margin do positive. work that's of margin you through subdued it first a of work Or some given a continue evidence potential was in that's relative impediments Is as to do inventory? -- the that to half you lot for lot A think a With still in -- I guided the in fiscal year on to all-time of hard going XX.X% 'XX,

Yes.

are for a there's upside down. in with functions. $XX to than in lingering deal certainly thanks that, I had across lot drive going million recognizing XXXX. set has But still we of continue issues Jim. inventory we're smaller It coming future organization of We to those inventory the that lot to some dealing and the given We think the focus 'XX. of team the in a with fact work, been another levels we think

business. there yet of is upside in the mix a margin. So we feel It's gross potential healthier

for in business. bigger our profile of the direct-to-consumer gross Sweaty including that a have Betty the We inclusion mix margin,

for one every just costs lingering and Obviously, in that had But hangover we higher so XXXX. the Those addressed. chain behind are think supply stronger in full costs And with to price contend I area, transitory reason being selling all that's us. margin.

feel so good like a move as we And into we I feel can the and on build like this that is future baseline really for XXXX.

just me on let Jim, then, add there, to Jim. And

our business, work story where our of heads of we last stabilize to the we've coming out did restructuring this followed debt, we restructure hard in I the long period history recognizing You think and a put had the the been and to for do really fall. pay I of down company the the time work a down of you and company inventory, fall, organization, the Importantly, the appreciate we the biggest really sort as know attack

is will the right inflection we because the we did around we and And to And We year. deliver to to we've grow said business by the certainly everyone growth. have can that want this growth improvement towards margin. the lead we the way. of pivoting inflection then work what margin And hard are sight encouraged then line

we've keep last going the and months, to for where that's against the we're story So laid out X that plan. working that

Jonathan a the follow to that more on Do you orders the have specifically? half in brands a you inflection support line. on in to up Merrell and wholesale some, on top view second line. but top Just hand little sight what for are growth the Saucony inflection bit the portfolio, lines the the difficult have And dug assumptions? the in

year and that lot we continue obviously, think, encouraging signs half growth and done growth see not chain core. really of -- pandemic do were coming in and driven of to the the the that. new have the I backlog, products. business disclose the don't inflection the we and back of we and We we're issue, product sort a the And the planned introductions new have out having supply improvement getting the for in is on of by of

And XXXX. pipelines and And in our as I weren't I to product think do with begin we as the that all winning need think innovation know they innovative is consumer. newness

and by the or So the and early X and force on come the the indications X Guide X are that in we'll encouraged positive, Triumph handful X we'll then really XX sacking and on Hurricane in then XX quarters focus sell-throughs initial Moab core already And collections. XX back launch out. other the Speed and of is and Agility Merrell. feedback sequentially. and a Peak We're Ride

to we're by Moab X, talk the X, that that. don't but Moab lot about and we more encouraged check the continues a And

We from think staying are know wholesalers very close. I all a perspective, we're that landscape So wholesale continuing differently. to act

we know partners in too, wholesale in challenged I with to some turnaround way. but more meaningful just it's brands think macro for altered a effort, I of reengaging those think is landscape part our a that wholesale,

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Our Sandler. of next question comes Abbie from line Piper the Zvejnieks with

and have I one follow-up. a then

of Can Merrell that year. where market to and this hike talk next down but that Just on Merrell double trail share space? on in specifically. business will low with that can wouldn't mean on doubles taking comments hike how and I you and be serve you trail. and other evolve market just that think grow guess to happening project you in I what's low And about just I kind mean think the that. year adjacencies the also

hit I'll Abbie. straight question, it Great on.

past the the think of worst-performing XX outdoor categories months. the at category for level, one pressured, I been highest in probably the the market has

faster, to we're X, Moab. issue, sit referenced, the the help encouraged innovate boot, athletic as -- world's a leader, the just the which going hiking Merrell why which which category is, more lead and and I'm is category some it's is to think which that by I've Speed the already a of say new behind introductions version category, that and as #X Merrell I has lighter, not of Moab product

evolving. I is the X think the of the Agility evolution trail certainly is Peak

the full in gained points basis over XX XXX points up Specifically, points XX trail both of XX basis respectively, respectively, market Merrell in points those last run, the hike and -- year, basis share gains and quarter, basis and in categories. and for

So in that category. a albeit share is gains, contracting

for the category style. I that's in and predicated of function versatile. not we athletic think really can the piece be worn everyday outdoor think not is designing can future be also faster I one -- and think but and can looking shoes work certainly -- are just more that great style also versatile that I the only lighter is and hitting more that on in wear. but harder Merrell, trail, And And where not only

think a the to I help reinvent. leader So is onus category on

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for running years best is critical MTL the product we've test And the handful important. incubator past of lab Merrell trail so product elite is the that the why design reason for run the important great market. Another in There's of to some Merrell products the in honestly, around and us. awards won

has trends. lead and evolving front of to leader to share, we category, have the in tough So gaining out be

if But you it. Got you to on make macro of how are will improvements. improvements lower can profit Mike, in maybe more that we still than there are proceed your That's then, the And an projected, worse, line ability said consumer trends think challenges top profitability -- those the gets helpful. growth. inflection about kind environment

is which I margin for XX% indicated quarter strong than year guide, margin. gross first the gross that's guidance think in higher full the

strong move forward. headwinds improve maintain even we confidence that -- or really we as have sort a that's behind where of that an we can and of feel we high that I those base a got area relative think lot we've us,

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as in So we'll that have past. the manage to we continue

gross gross high business driven the coming performance pressure and in the that much margin, fact healthier more we the XXXX. place on by biggest and of much margin got years over a the been predictable we've that last inventory inventory The have level couple has today, into

Ashley Capital line KeyBanc the of Markets. Our next comes Owens with question from

Great.

in in what's wanted years, any about So competition that wear I athletic facing Can high XQ in you given how Betty just there opportunity you're 'XX? there And you're the outlook to coming the brand just increasing for over focus talk for driving quickly. general? single-digit sizing then in the specific factored really comps the on declines, Sweaty in

and Mike on. add Yes. can I'll hit it, then

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for with time the lot integration Betty closer And business. past that I've worked think Sweaty I year, think a certainly feel we've past that hard the much understand to over and months, of the I trying on business. of to handful spent

equity. saw for to Sweaty first business, we decline same by and the promotional healthier back of a of and year, you're we this also lot meaningful the running in of actually I We're our very promotional uptick the margin first less think our gross why a to year rings protecting a seeing business. strategy improvements come brands. contributor in quarter but the in part Betty, margin half driven at last promotional enhancing improvement, well. a And back dot-com latter ultimately brand I'll year. own is be the and gross pulled think of becoming business to was promotions but I less brands some in business, our And That's also -- running overall last as that on better just really and the that to

a strong to and encouraged half the fanatical business. promotional premium being that by I really was that. -- a last following stay team to on-trend then the of performed in holiday that first quarter ability materials, strong really Betty designs The best-in-class business. in of core So They power really fit, close for consumers year less back has season. over the Sweaty brand love their that just very the product brand. the way extend bottoms drag franchise, very female who That reception. beyond some is

very mid-layers all for Really styles then grow addition the and good year-over-year. And really accessories up the and were encouraged the categories, to by double are the stocks in strong digits ability business, encouraging. Navigate outerwear Nimbus us,

same living I we predicated very We I a that think a then that. I'm base. understand It improvement Wolverine is by portfolio brand. well. great supply margin lot the up the loyal Sweaty no to very a direct-to-consumer, of World helped, materials, a then great a have great that cultivating things, matter research retail premium the a love We've from in react just now that plugged to just time, to with Betty fast in Wide That There's have from is the chain. lot really and ability styles across think of They time, noted. and I think, unique Sweaty some organization them the replenish those into done things our positioning, Sweaty speeding And background, brand, doubt. initiatives Sweaty Betty At weeks design, gross chain. a of as a and fast-moving fit benefit to of on and I the can is fan market, apparel which has So competitive learn reaction development competitive great we're Betty We excited coming well is bringing potential very largely supply Betty. advantage.

quarter that that first of drag, certainly the to work bit there. a optimism So in explains but moving sure there's go Hopefully, little for from do still brand.

That's Great. . color. helpful super

comes question Trading. Our with from Poser of Samuel William the line next

so a -- question became can and brand why the work been intend turned about of have give I you get that us the business. and around. how some Wolverine it you to tough That's idea

is customer loyal. the work know, as you very, think, very I

they to you... hard trend gone back if if if how will getting over on them to then and so else swing they've be -- down And it somebody the

going with to DuraShocks more share price those are team outpacing replenish We're to restocks $XX at No We've And group. sort at there more has understand there's in been to are on struggling specifically group that that that equipped. We the Yes. share, to sure, and $XX some lost we I about but sort better Great a Colorado range. coming The doubt, happening. at Sam, the have really your our business points historical ability back But this We to to seeing an grow. about our We've a inventories point. appreciate over do much consistent. the tough brand business. work bolster bit the ability the I I a point. talked are get for there places, about positioning that the category market been industry And is work I $XXX are focus very of and premium a the more Sam, think year the think to gain and than work you sort get price has back close Wolverine to sell-throughs our year $XXX those think appreciate feel that bit leader, to question, to that where now. an losses steady for us, We and working talking that. channel. we group year. of intense to and right think, closely introductions now had that it, new in struggled and There of our little is Surge, good our price point, its past very premium

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can business delve just year. -- half sort to wrap gets of you I'm trying around parts give dissecting the back the -- of sort I turn more expectation. it little in positive you into mean, then my just And the a just and like then sounds there? the It of arms to expecting of Can of how that us you're

guide Sam, growth on year. Well, the this inflect the Sweaty in half We provided, Mike. back Betty, to of the expected mentioned, QX. is in saw, Merrell's again, in we the Chris as contraction

see sequentially that improve as -- the in well. so and And again, to that of growth we'll half year the back inflect

full improve down. we'll each business But be the quarter. Saucony year, Our for will

is we we're inflection $XX the revenue of many of improvement. underscore expecting but venture growth to other Saucony, million about impact out the the that It's our to business just Saucony discussion change specifically. sequential impact certainly, that in changes joint previous So were that -- of an the called a not important and but too, there, model changes some heavily mentioned

but improvement the overall, Saucony, not growth for the the back year, sequential half an to in seeing in But inflection of year.

believe So of I headwinds been the it the of quarters. relates also business. with pipeline some as of the trajectory of just Chris to abatement for brands, for of the to product sort And think some the of and contending comparisons, of some couple the the reasons that on but easier touched that's those last we've growth the

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just that's trying another some why of numbers. explain the reason I'm color So behind to the

thing. last one then And

margin the inventories freight on are and on, understand I margin, pieces so the and like of so get gross like and year look and on today. understand very cleaner half whole nonrepeating you're to guidance gross sort looks so most to promotional -- well, forth. the in throughout is the did promotional. better going is understand lot with for it it activity, what's I gross with anticipating, and when mean margin But the and I really On but back a specifically look going I

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on. Mike I'll take and add can it

because different introduced of new in Sam, look ends keep product do to gate is check no portfolio I the have both differently the your product is collection, referencing, And selling when I looks think think just marketing with with viewing But manage our brand. we the follow product the will the we've certainly, the is what a Moab we across think the I have and are we how Ride to around quarter brand. and think lot The the and quickly work X Speed disruptive really fell I would I out I pressure example, The point, of encouraged in that what and didn't just 'XX, the out 'XX Guide I marketplace the really good. innovation which in marketplace we say newness, certainly pressure responded flat good. 'XX, in in year. pipeline, wrap on today. almost heavy put the continue a styles XX have good are and think that it I put by we this on we in done Saucony's consumer variant we the Triumph were which first hit core I'm very us to and of visually the

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question from Kummetz line with of Securities. Our the Mitch comes next Global Seaport

I guess a of couple things.

On DTC to your the don't but starting this have I based assumptions product I retail you and And Or know retailers? backlog, of around that outdoor pipeline once a at just Are follow-up. to better then see of that. Merrell the terms inflection are space give in the a want kind bottoming or on the support orders. you growth, more book around to growth? is understand does I order

Yes.

color. let Mike I and it some add I'll hit think I'll

the as I do outdoor assortment. where specifically, conversations call to and to were the last and in category turnaround ago quarterly partners. the their about on months talked the the close wholesale think a different about of today within of the we handful view close that we of part how think market, they I I frankly, how how was are one just just were our things Merrell

the in the gain Merrell share, category. continues . keeping keep document to continues and reuse think the we pressures that be leader, I well protecting to are outdoor all know we seeing Merrell.

become has Moab then for why Speed how of the share X X silhouette I classic evolve lighter fact that to that and is which in we're And received. important thing into trail think Moab the the so about is is and run sort the we're behind the Merrell encouraging. very athletic, brand trail excited been fashion entree than our gaining run and

of very great own margin stores. are we're are to close think sort happening paying the and seeing create certainly attention Merrell in working less less We're what's XX traffic, to what in increases promotional marketplace. disruption merrell.com, promotional our to business profit Outlet be our in Where responding to to? they I and we're in What buying? less a direct-to-consumer to be and they is

new the Merrell And new coming and We health. about launch Jeep the for last continued got I sold franchise. Moab saw a the year, think the that of franchise and heat then we bringing piece, to introductions rest And Moab of the has talked year XX% the of balance we've continued just Colores health category. XX the lift Hero across The to by that million out impressions.

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better you And doesn't back on then, to product the Chris, Saucony, standpoint, of trying just inflect the just the that with the particularly a encouraged growth brand -- terms in from order and brand really half. dramatically also I'm model book drive not, to need improve if issue is eventually you stronger will order business better product, the the is And the is that those get book. for selling. will changes? guidance brand you heat. in adjust the that like Would heat, the the seem if that that The not but it hope with sell-through reconcile

and heart question. my Great right Yes. is Saucony dear near now. to

some in break entire probably have to portfolio think the of greatest to out. Saucony -- has potential the I

both from very things business. them, We I And end-of-life been a is elite standpoint. about of very, the a of sort products. on working opportunity. elite I'm runner top I line time, think think lot by changes. encouraged the I innovation a pipeline model of the low-margin long the of there channels has And transactions, Saucony sort the of is because think some of there's the good. the very and Saucony and democratization talked elite myopically I think against a where is period tremendous about focused talked brand product We

products new well. launched resonating so think the And we've are I

And lifestyle styles the we're opening positive. core We prelining on opportunity colors feedback there's, to about frankly, just distribution. our worked as very getting The broader beyond is we're that approachable, and and aperture think shoes new make we're more hard runner. and materials we a

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by encouraged we're so And those.

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I'm on So there. bullish stocking. I'm opportunity bullish is I and that on the team, think

question from UBS. Mauricio Serna the next line with Our comes Vega of

imply level I inflection half, that make that talk in much just think your expansion on happening million heard quarter? sales the Just that revenue adjustments of that How ongoing the third first total second guidance as 'XX, quarter clarification imply of margin. think announced the the like that active if the about then margin a provided in on Is like the lastly, operating And already in X.X% last in for just the I an you you JV I an to then business you company Xtep the XXXX? about year? in $XX guide, sure would And presentation, want terms a by versus like because I growth does sale group. when a mainly

Yes.

me the question take first. correct. Let That's last

your change question. margin So think, forward first operating is The the business the predominantly to ongoing for that is $XX a the January first margin, moved in versus was last operating effective down relative related year. quarter with going we've Xtep to I The million distributor referenced there model partner X. the

Gross QX to the we up expect go that operating for But year, through our revenue X.X% the QX base. will rate, on X% to of lower full obviously, margin year. the seeing year revenue from dramatically. as we're is margin we quarter the in lowest the cycle which be

the there. for behind focus to quarter gross importantly, the reinvest improvement sequential confidence and Mauricio, above our margin drive a gives that year the for But well obviously, see, we'll So capacity been us of full guidance be is XX% us has brands. first XX.X%. improvement to have sustainable obviously, business that the that for the expansion,

of revenue that first on quarter much outcome even revenue for the So the cleaner really first strong helping base which half, is base, that expansion. but lower margin importantly, in to lower drive

end We this today's your for session, lines time. and this and disconnect conference, question-and-answer at you your participation. also concludes may of have reached you the our Thank