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| Statement |
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| And I think the Saucony pipeline is much stronger this year than it was last year |
| We now have the ability in Sweaty Betty to react to fast-moving styles in a matter of weeks to replenish those things, which I love coming from retail apparel background, just that fast reaction time, I think, is a competitive advantage |
| With a clear vision, a common sense of purpose and a collective effort of our global team, I'm proud and encouraged to say that Wolverine World Wide is a much different company now than it was just six months ago, and I'm excited to share our progress with you today |
| The organization is more efficient and more capable of building great global brands with new talent and key brand roles and new centers of excellence created to help enable our brands to build awesome products and tell amazing stories |
| Our business is poised to be much more profitable with an outlook to meaningfully expand operating margin this year as a result of significant gross margin improvements and our restructuring efforts late last year |
| Our product pipeline is stronger with new introductions already resonating with consumers and more great collections dropping in the coming months |
| Our balance sheet is much healthier with the company's lowest debt level in over 2.5 years, approximately 40% less inventory than just a year ago and a clear line of sight to drive further improvement on both metrics this year |
| But importantly, much cleaner base of revenue in the first half, which is helping to drive that margin expansion |
| So really strong outcome for the first quarter even on that lower revenue base |
| It’s also just everyday Saucony run, which I think has tremendous opportunities |
| And so I think the new products we’ve launched are resonating well with the feedback we’re getting and we’re prelining new styles is very positive |
| I’m encouraged by Saucony because I think the product pipeline is very good |
| The hope is that with better product, stronger brand heat, the sell through will dramatically improve and that will eventually drive better selling |
| And the fact that we’re gaining share in trail run is very encouraging |
| As a result, our bank-defined debt leverage is better than expected |
| We've executed extraordinarily well on the key stabilization initiatives we laid out last fall, and we remain committed to continuous optimization efforts, and further strengthening of our balance sheet |
| Today, we're in a much better position to accelerate continued transformation of the company |
| So the fact that we’re talking about chasing new good styles and chasing products that we want to accelerate into the pipeline, I think is a very encouraging place for us to be right now |
| So I think the product pipeline is much, much stronger than where we have been historically, and I am excited to sort of continue to work through those older core styles and get to the newness |
| The Moab Speed 2 out of the gate is very good |
| I do think the product we have is really good |
| Ultimately, the Wolverine World Wide portfolio brands should make all our consumers' lives better |
| Our Saucony business will improve each quarter |
| As a result, we have a great opportunity to increase collaboration across our brands and teams to recognize unmet consumer needs, spur innovation, identify trends and better lever the collective talent of the organization |
| We feel good about those and our ability to gain back at that $140 to $60 price point |
| More importantly, we continue to make great progress in driving Wolverine World Wide's turnaround and transformation |
| We've done some gross margin improvement initiatives with them that have really helped |
| And I think the Wolverine Worldwide organization is bringing a lot of benefit to Sweaty Betty as well |
| At the same time, I think, Sweaty Betty has a very unique positioning, a premium brand, largely direct-to-consumer, predicated on great design, great materials, great research and development, and then great fit and then just cultivating a very loyal fan base |
| And then the ability to grow in addition categories, mid-layers, accessories and stocks are all very encouraging |
| Statement |
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| Q1 will be our lowest revenue quarter of the year to 7% for the full year |
| The biggest pressure on the business over the last couple of years has been gross margin, and driven by that high inventory level and the fact that we've got the inventory in a much healthier place today |
| The operating margin relative to the ongoing business going forward is down in the first quarter versus last year |
| We expect the Work Group revenue to decline high single digits, with Wolverine brand expected to be down mid-single digits |
| This compares to 2023 revenue from our ongoing business of $1.99 billion and represents a decline of 13.4% at the midpoint of the range |
| For a variety of reasons, we expect the company’s return to growth to lag our profit improvement |
| I think at the highest level, the outdoor category has been pressured, probably one of the worst-performing categories in the market for the past 12 months |
| And I would say the product we introduced in 2023, I think, our innovation fell flat in 2023, and I think, the consumer responded to newness, and we were heavy in core styles that didn't check which put a lot of pressure on 2023 and certainly continue to put pressure on us in the first quarter of this year |
| No doubt, our work group is struggling a bit right now |
| Shifting to our outlook for the first quarter, we expect first quarter revenue of approximately $360 million, a decline of approximately 30% |
| We saw, as Chris mentioned, on Sweaty Betty, a contraction in Q1 |
| So when we think about the impact of these discrete items in the first half of the year, about $125 million of the $165 million will impact the first half of the year, so putting more pressure on growth rates in H1 |
| We've struggled there a little bit over the past year |
| And Jonathan dug in on this some, but a little bit more difficult view on the top line |
| So I think, like I said, I think the pressure in outdoor is it remains |
| We expect Active Group revenue to decline mid-teens |
| we had talked a couple of weeks ago about sort of tempered expectations in the first half, and we sort of provided some clarity on both the internal and external factors that are sort of suppressing growth in the first half, but I do think that there are a number of reasons to believe in the second half |
| So the end-of-life inventory that we cited about $70 million of headwinds, mostly in the first half of the year, about $23 million of that in the first quarter really related to the elevated inventories that we entered the year with |
| Adjusted diluted earnings per share for the quarter was a loss of $0.30 and in line with our outlook |
| But we certainly think that premium price point is where the brand has felt some pressure |
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