- Wolverine World Wide Inc WWW shares are up Wednesday premarket following its Street-beating first-quarter results.
- WWW reported a first-quarter FY23 sales decline of 2.5% year-on-year to $599.4 million, beating the consensus of $577.53 million.
- The footwear, apparel, and accessories firm reported an adjusted EPS of $0.09 (-76.3% Y/Y), beating the analyst consensus of $0.03.
- While strength in international business (+12.6% to $249.7 million) and improvements in supply chain and working capital resulted in the Street-beating performance in the quarter under review, lower margins amid a challenging trading environment weighed on earnings growth Y/Y.
- Adjusted gross margin slumped 350 basis points to 40%, reflecting the sale of higher-cost inventory due to transitory supply chain costs from 2022, the acceleration of end-of-life inventory liquidation, and increased promotions.
- The adjusted operating margin contracted 310 basis points to 5.1%.
- At the end of the quarter, inventory was $725.9 million, excluding $11.2 million for held-for-sale business.
- Wolverine Worldwide exited Q1 with cash and equivalents of $116.2 million. Net debt at the end of the quarter was $1.06 billion, and liquidity was approximately $670 million.
- "We need to focus our efforts and investments on our Active and Work Groups, specifically our growth brands - Merrell, Saucony and Sweaty Betty," said CEO Brendan Hoffman. "The recent sale of Keds and pending licensing of Hush Puppies will enable this focus, and these transitions are well underway," he added.
- The company said that it is going to continue its portfolio optimization efforts. Wolverine Worldwide is now exploring strategic alternatives for its brand Sperry.
- Outlook: Wolverine Worldwide reiterated its FY23 sales guidance of $2.53 billion - $2.58 billion, against the consensus of $2.55 billion.
- The company expects FY23 adjusted EPS of $1.40 - $1.60 versus the estimate of $1.46.
- Price Action: WWW shares are trading higher by 7.28% at $16.20 premarket on the last check Wednesday.
- Photo Via Company
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