WOLVERINE WORLD WIDE INC /DE/ Q4 FY2024 earnings call

• Reshaped and simplified brand portfolio to align with consumer trends. - Strengthened balance sheet, lowest debt since Q2 2021 and cleanest inventory since pandemic. - Improved profitability with record full-year gross margin. - Invested in product design, marketing, and opened an innovation hub in Boston. - Saucony focused on run lifestyle, launched new models and collaborations, expanded doors. - Merrell modernized trail products, gained market share, expanded lifestyle distribution. - Sweaty Betty improved profitability, launched new campaigns. - Wolverine brand focused on product innovation and premiumization.

Saucony: Fourth quarter grew 7% adjusted for business model changes, with low teens growth in the US and over 20% in EMEA, gross margin expanded by more than 1400 basis points. Merrell: Fourth quarter up 1%, gross margin expanded nearly 400 basis points, grew in the US hiking category and gained market share, launched new products like the SpeedArc Surge Boa. Sweaty Betty: Top line softer, store revenue flat, e-commerce down high single digits, but gross margin improved nearly 900 basis points. Wolverine brand: Revenue performance inconsistent, focused on product innovation and premium price points.

• 2025 revenue expected $1.795 billion to $1.825 billion, increase of 2.5% to 4.3% including an estimated $40 million currency headwind. - Active group revenue to grow high single digits on constant currency basis. - Saucony expected mid-teens growth, Merrell mid-single digits, Sweaty Betty low single-digit growth, Work Group low single-digit growth. - Adjusted gross margin midpoint 45.5%, increase of 90 basis points from 2024. - Adjusted operating margin midpoint 8.3%, up from 7.5% in 2024. - Adjusted diluted EPS expected $1.05 to $1.20 including an $0.08 foreign currency headwind.

• Factors causing actual results to differ from forward-looking statements, including tariff changes, supply chain issues, inventory management, and competitive market dynamics.

Q: Anna Andreeva asked about Saucony's door expansion and Merrell's female consumer focus.

A: Chris Hufnagel said Saucony expects 900 incremental doors this year, opening responsibly, and Merrell is repositioning to engage female consumers with new product lines.

Q: Laurent Vasilescu asked about long-term operating margin aspirations.

A: Taryn Miller said it's too early to set a date, but encouraged by progress in 2024 and plans for 2025 to grow top line and optimize costs.

Q: Sam Poser asked about Merrell's specialty retailers and fifty-third week impact.

A: Chris Hufnagel discussed Merrell's engagement with specialty retailers and Taryn Miller explained the fifty-third week will provide ~50 basis points of growth in 2025.

Q: Mitch Kummetz asked about marketing investment and cold weather impact.

A: Chris Hufnagel said marketing spend will increase, and cold weather has not hurt the business, with Saucony's running business not affected and Wolverine boots benefiting.

Q: Jim Duffy asked about run specialty channel and inventory.

A: Chris Hufnagel said the run specialty channel is healthy and Saucony is gaining share, and Taryn Miller said inventories are healthy and close to target with modest investment in 2025.

Q: Mauricio Serna asked about DTC sales decline and cost savings.

A: Chris Hufnagel discussed DTC sales pressure from less promotion, and Taryn Miller explained margins are expanding due to better top-line performance and cost savings.