ROCKFORD, Mich. - Wolverine World Wide, Inc. (NYSE:WWW) reported first-quarter earnings that surpassed expectations.
For the first quarter ended March 30, 2024, the footwear and apparel company posted earnings of $0.05 per share, which was notably higher than the analyst estimate of $0.00. Revenue for the quarter was $394.9 million, also beating the consensus estimate of $360.07 million. Despite better-than-expected results, the stock declined by 3.9% initially in premarket trading, though most of these losses were retraced at the time of publishing.
Wolverine World Wide's full-year 2024 revenue guidance is set at $1.68 billion to $1.73 billion, which reflects a downward adjustment due to recent changes in the company's business model, specifically the new licensing model for the Merrell and Saucony kids businesses announced on May 1. This updated guidance represents a decline of approximately 15.7% to 13.2% on a constant currency basis compared to 2023 and falls short of the consensus estimate of $1.72 billion.
The company's earnings guidance for the full year is in the range of $0.65 to $0.85 per share, with the midpoint of $0.75 aligning with analyst expectations. This projection includes an approximate $0.10 negative impact from foreign currency exchange rate fluctuations.
Chris Hufnagel, President and CEO of Wolverine Worldwide, commented on the quarter's performance, stating, "We delivered better-than-expected revenue and earnings in the first quarter, and we are beginning to see proof points emerge as early validation of our strategy and execution, including record gross margin in the quarter." He also highlighted the acceleration in the direct-to-consumer business and improving trends across wholesale operations.
The company's gross margin improved significantly to 45.9%, a 650 basis point increase from the previous year, driven by lower supply chain costs, reduced sales of end-of-life inventory, and a favorable distribution channel mix. Inventory at the end of the quarter was down approximately 51.2% compared to the prior year, reflecting the company's efforts to strengthen the balance sheet.
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