Wolverine World Wide Reports 21.8% Revenue Decline, Achieves Net Earnings Turnaround

Wolverine World Wide, Inc. reported a significant decline in its financial performance for the fiscal year ending December 28, 2024, with total revenue falling to $1.755 billion, a decrease of 21.8% from $2.243 billion in the previous year. The company's gross margin improved to 44.5%, up from 38.9% in 2023, primarily due to reduced end-of-life inventory sales and lower supply chain costs. The effective tax rate also saw a notable decrease, dropping to 16.3% from 70.7% in the prior year. The company achieved net earnings of $51.5 million, compared to a net loss of $39.2 million in 2023, resulting in diluted earnings per share of $0.58, a significant turnaround from a diluted loss per share of $0.51.

The decline in revenue was attributed to several factors, including a $193 million decrease in the Active Group segment, which encompasses brands like Merrell and Saucony, and an 83.4% drop in the Other segment, largely due to the divestiture of several brands including Sperry and Keds. The Work Group segment, which includes Wolverine and Cat brands, experienced a smaller revenue decline of 5.3%. Direct-to-consumer sales also fell by 16.9%, reflecting broader market challenges and changing consumer preferences.

Strategically, Wolverine World Wide has undergone significant organizational changes, including the divestiture of several brands and businesses. In 2024, the company completed the sale of its Sperry business for $97.4 million and divested its interests in the Merrell and Saucony China joint ventures. Additionally, the company entered into multi-year licensing agreements for Merrell and Saucony kids' footwear and apparel. These strategic moves are part of Wolverine's efforts to streamline operations and focus on core brands with higher growth potential.

Operationally, the company reported a decrease in inventory levels, down 35.6% year-over-year, which reflects improved inventory management practices. As of the end of 2024, Wolverine employed approximately 3,100 individuals, a slight reduction from previous years, as the company continues to adapt to market conditions. The company also reported that international revenue accounted for 49.1% of total sales, indicating a strong global presence despite the challenges faced in specific markets.

Looking ahead, Wolverine World Wide anticipates continued challenges in the retail environment, particularly in the direct-to-consumer segment. The company plans to leverage its improved gross margins and operational efficiencies to navigate these challenges while focusing on brand strength and consumer engagement. The management remains cautious about the economic landscape, emphasizing the need for adaptability in response to changing consumer preferences and market dynamics.