WOLVERINE WORLD WIDE INC /DE/ Q1 FY2025 earnings call

• Wolverine World Wide had sequential top line improvement in 2024, inflecting to growth in Q4 2024, and Q1 2025 exceeded expectations with over 5% revenue growth (7% constant currency) and record gross margin.
• Saucony saw 30% YOY revenue growth, broad-based contributions, improved gross margin, and strong market share gains. Launched new models and the Endorphin Elite 2.
• Merrell had 13% YOY revenue growth, improved gross margin over 200 basis points, growth in core outdoor categories and lifestyle, with new product innovations.
• Work Group and Sweaty Betty face challenges; Work Group is working on new products, Sweaty Betty focused on improving profitability by reducing promotion.
• The company withdrew full-year 2025 guidance due to tariff uncertainties but provided Q2 guidance, with strategic actions to mitigate tariff impacts, including diversified supply chain and price adjustments.

Wolverine World Wide's first quarter results were driven by its two largest brands. Saucony saw revenue grow 30% year-over-year in Q1 with broad-based contributions, and improved gross margin by nearly 400 basis points. Merrell had revenue growth of 13% YOY, with improved gross margin over 200 basis points. Sweaty Betty had revenue decline of 16% but saw significant gross margin expansion due to lower promotion and better full-price mix. Work Group revenue decreased 17% in the quarter, with half due to timing shift and half due to non-repeat of prior year discounting.

• Withdrew full-year 2025 guidance due to tariff uncertainties.
• Q2 2025 revenue expected to be $440M-$450M, year-over-year increase of ~5% at midpoint.
• Active Group revenue expected to grow high single-digit in Q2.
• Work Group revenue expected to decline low single-digit, sequential improvement.
• Q2 adjusted operating margin ~7.2%, adjusted diluted EPS $0.19-$0.24.

• Tariff uncertainties and their impact on costs and inventory.
• Uncertain consumer sentiment and spending.
• Supply chain disruptions and volatility.

Q: Laurent Vasilescu asked about Work Group revenue shifts and tariff impact quantification.

A: Taryn Miller responded no other shifts besides previously noted, and the $30M tariff impact is on gross margin profit.

Q: Ashley Owens asked about price increase magnitude and second quarter segment breakdown.

A: Chris Hufnagel said price increases were surgical, and Taryn Miller mentioned no segment breakdown in guidance.

Q: Sam Poser asked about demand planning and Merrell promotions.

A: Chris Hufnagel and Taryn Miller discussed inventory adjustments and Merrell's promotional transition.

Q: Peter McGoldrick asked about Saucony lifestyle rollout and Sweaty Betty KPIs.

A: Chris Hufnagel talked about Saucony's lifestyle growth and Sweaty Betty's profitability focus.

Q: Anna Andreeva asked about Sweaty Betty recovery timeline and Saucony acceleration.

A: Chris Hufnagel discussed Sweaty Betty's profitability focus and Saucony's post-tariff acceleration.

Q: Mauricio Serna asked about Q2 tariff impact and debt paydown.

A: Taryn Miller and Chris Hufnagel addressed tariff assumptions and capital allocation.

Q: Mitch Kummetz asked about Q2 assumptions and $30M tariff offset.

A: Chris Hufnagel and Taryn Miller discussed Q2 assumptions and tariff mitigation efforts.