Wolverine Worldwide Q1 revenues fall by 16.1 percent

Wolverine World Wide, Inc., for its first quarter said reported revenue was 439.3 million dollars, down 16.1 percent versus the prior year. On a constant currency basis, revenue was down 15.6 percent versus the prior year, while company-owned ecommerce growth for the quarter was 17.5 percent. Reported gross margin was 41.4 percent, compared to 42.1 percent in the prior year, while reported operating margin was 3.8 percent, compared to 10 percent in the prior year and adjusted operating margin was 6.9 percent, compared to 10.9 percent in the prior year. Reported diluted earnings per share fort he quarter were 16 cents, compared to 43 cents in the prior year and adjusted diluted earnings per share were 28 cents, and, on a constant currency basis, were 29 cents, compared to 49 cents in the prior year.

“Following record financial results in the fourth quarter of 2019, the company delivered strong Q1 earnings results, despite challenging conditions caused by the Covid-19 pandemic late in the quarter,” said Blake W. Krueger, Wolverine Worldwide’s Chairman, Chief Executive Officer and President, adding, “While prioritizing the health and wellbeing of our global team, we have quickly initiated a comprehensive set of measures over the last 30 days to proactively strengthen the company’s financial position, liquidity, and balance sheet in the face of the ongoing pandemic. Our supply chain and distribution centers continue to operate, enabling strong ecommerce growth and continued wholesale shipments.”

The company added that over 500 million dollars in cash preservation initiatives have been implemented, which are now expected to enable the company to generate 150 million dollars to 200 million dollars of operating cash flow in 2020 amid the Covid-19 pandemic. The key initiatives include drawing down the remainder of its revolving credit line, a total of 367 million dollars, reducing planned inventory receipts by approximately 300 million dollars, postponing 25 million dollars of capital expenditures scheduled for 2020 until business conditions stabilize, and reducing planned operating expenses by an estimated 100 million dollars for the remainder of 2020, including the implementation of select furloughs, organizational changes, and compensation changes for the company’s management team.

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