Footwear company Wolverine World Wide, Inc has withdrawn its earnings guidance in light of the challenging environment caused by the spread of Covid-19.
In a business update, the group said its supply chain is currently operating at near full capacity and its logistics operations and distribution centres are currently at full strength. In addition, Wolverine’s global e-commerce business is fully operational and ready to serve customers.
It has, however, closed all its retail stores — a fleet of 90 stores representing less than US$100m of annual revenue.
“The safety and well-being of our employees, customers and communities remain our top priority, and we are taking proactive measures to help ensure that safety,” said Blake Krueger, Wolverine’s chairman, president and CEO. “As a company, we are well-positioned to weather the current challenges and accelerate the execution of our Global Growth Agenda as conditions improve globally. We are fortunate to have a disciplined operating model and a strong balance sheet that positions us well to navigate the rapidly changing conditions. As the market stabilises, we will be ready to capitalise on the power of our brands and operating platform to service our global customers and consumers.”
Mike Stornant, senior vice president and CFO added: “During this time of uncertainty, we are implementing significant measures to further strengthen our balance sheet and enhance liquidity. This includes a disciplined focus on closely managing inventory and working capital while adjusting discretionary spending in all parts of the organisation. We are acting quickly and believe this proactive approach will benefit us in the short- and long-term. We expect to continue to have the financial flexibility to support the company’s operations now and into the future.”
However, due to “the heightened uncertainty and recent volatility” in the retail market relating to the potential impact of Covid-19 on the company’s operations, including its duration and effect on overall customer demand, the company is withdrawing its guidance issued on 25 February.
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By GlobalDataThe group had reported a 4.8% increase in revenues to $607.4m in its fourth-quarter results. It did, however, book a loss of $0.9m compared with earnings of $39.3m a year earlier.
It had expected revenue growth of 3% to $2.29bn to $2.34bn for the full year of 2020. This included an estimated revenue impact from the coronavirus of approximately $30m in the first half of 2020. Reported EPS was expected to be approximately $2.05 to $2.20.
