Wolverine Worldwide has said it will deliver “better-than-expected” sales performance for its second quarter, despite the Covid-19 pandemic limiting its wholesale business during the first nine weeks.
The casual footwear and apparel brand said the second quarter is still expected to be the most challenging of fiscal 2020, but steps to proactively maximise its strong e-commerce platform and implement cash generation initiatives are anticipated to result in more than US$20m of operating cash flow in the period.
Through the first nine weeks of the second quarter, owned e-commerce grew more than 90% compared to the same nine-week period in the prior year, delivering more than 40% of the company’s revenue.
Online sell-through of the company’s US wholesale customers accelerated to strong double-digit growth after a few initial weeks of decline and grew double-digits overall during the nine-week period.
Certain countries, including many within Europe, began to emerge from the Covid-19 pandemic and started to return to more normal retail selling environments earlier than the US. In these markets, running and outdoor performance product categories have generally performed better than other footwear categories.
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The company’s quarter-to-date revenue exceeded its expectations entering the second quarter. Total global revenue was down less than 50% compared to the same nine weeks in the prior year despite the impact of widespread global store closures during April and May, while a “strong” performance by its owned e-commerce business helped to offset the store closures. Wolverine Worldwide now anticipates a similar year-over-year trend in the last four weeks of the quarter.
“As the global economy continues to reopen, we are encouraged by some of the early trends,” said Blake Krueger, CEO and president. “Our investment in digital capabilities over the last several years is paying off, delivering significant, highly profitable online growth. We are also seeing some promising at-once order demand where stores are open. The consumer is responding to fresh product offerings and relevant stories during this dynamic period.”
Wolverine Worldwide reported net earnings of US$12.8m for the first quarter ended 28 March, compared to $40.6m last year. Reported revenue was $439.3m, down 16.1% versus the prior year.
