GlobalData associate apparel analyst Alice Price tells Just Style Wolverine Worldwide, which owns Sweaty Betty, Sperry and Merrell, amongst others reported a “disappointing set of results in Q2, with all brands with the exception of Saucony, experiencing a decline in revenue versus last year.”

Price adds that Wolverine has struggled in the face of ongoing inflationary challenges in some of the key markets it operates in such as North America and Europe.

She believes this is down to consumers becoming more “discerning of what they spend their money on and preferring to turn to more desirable and on-trend brands such as Lululemon and The North Face.”

Wolverine’s international revenue from the ongoing business of $260.9m was down 6.7% compared to the prior year, or 6.2% on a constant currency basis.

Direct-to-consumer revenue of $132.4m was down 20.3% compared to the prior year and down 16.4% for the ongoing business compared to the prior year.

Wolverine Worldwide Q2 highlights

  • Revenues of $589.1m down 17.4% compared to the prior year.
  • Operating margin slipped 7.8% from 23.5% the previous year

Along with the results, Wolverine Worldwide announced the abrupt departure of its CEO Brendan Hoffman and appointed Christopher Hufnagel, previously the company’s president, to the positions of president and CEO. 

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Hufnagel has come from leadership roles at Under Armour, Gap and Abercrombie & Fitch and a 15-year career in the Wolverine Worldwide business across a variety of brands, disciplines and responsibilities. Chairman of the company’s board of directors, Tom Long states he and the board are confident in Hufnagel’s ability to execute its strategy with “enhanced urgency and boldness.”

Wolverine has faced difficulties in its wholesale segment due to surplus inventory and conservative orders from its wholesale retail partners.

“The trading environment is challenging, especially in global wholesale channels where order demand has slowed as retailers manage their businesses more cautiously,” explained Mike Stornant, executive vice president and chief financial officer. “As a result, we have reduced our revenue and earnings outlook for the back half of the year.”

Wolverine Worldwide’s full-year 2023 outlook

  • Revenue from ongoing business is expected to be in the range of $2.26bn to $2.28bn, representing a decline of approximately 10.7% to 10.0% versus the prior year
  • Gross margin is expected to be approximately 39.4% and adjusted gross margin is expected to be approximately 40.0%
  • Operating margin is expected to be approximately 4.8%, and adjusted operating margin is expected to be approximately 5.0%.

Hufnagel described the second-quarter results as “disappointing” but said he remains confident in the growth and improvements the company intends to make to drive profits in 2024.

The new CEO added: “I look forward to working with the entire team to continue to improve profitability, generate growth, and create shareholder value.”

Wolverine Worldwide announced the appointment of Melissa Mullen in June as activewear brand Sweaty Betty global brand president after holding several senior executive roles at sportswear brand Nike and beauty lifestyle brand Jo Malone London.