Wolverine Worldwide posts double-digit revenue growth despite supply chain disruption
Outdoor apparel and footwear group Wolverine World Wide, Inc. (Wolverine Worldwide) reported an increase of 29.1% in its third-quarter revenue on Wednesday, progress achieved in spite of issues related to Vietnamese factory closures and global logistics hold-ups.
In the third quarter ended October 2, 2021, the Rockford, Michigan-based company, which owns brands including Wolverine, Merrell, Saucony and Sperry, posted revenue of $636.7 million, compared to $493.1 million in the prior-year period. In constant currencies, the company’s year-over-year revenue growth was 28.2%.
E-commerce was a particularly strong channel for the group, seeing its sales increase 45% versus the previous year and 126% compared to Q3 2019, before the impact of the Covid-19 pandemic.
According to Wolverine Worldwide CEO Blake W. Krueger, supply chain disruptions were responsible for “at least a $60 million negative revenue impact” on the company’s Q3 results.
The executive further pointed out that the Merrell label was hardest hit by the closure of factories in Vietnam but was still able to achieve mid-single digit revenue growth. Both Saucony and Sperry, on the other hand, posted year-over-year rises of over 40%.
Wolverine Worldwide’s third-quarter results also benefited from the addition of British women’s activewear brand Sweaty Betty, acquired by the company on August 2, 2021. Disregarding the contribution of Sweaty Betty, the company’s Q3 revenues totaled $597.6 million, up 21.2% versus the prior-year period, while e-commerce increased 13.3% year over year.
In terms of earnings, Wolverine Worldwide broke even, as costs related to the Sweaty Betty acquisition, litigation and measures taken to deal with production and shipping delays ate into the company’s improved revenue. In the previous year’s third quarter, the group reported income of $22.4 million, or $0.27 per diluted share.
Year to date, Wolverine Worldwide achieved revenue of $1.8 billion, up 38.8% compared to $1.3 billion a year earlier. Earnings in the nine-month period were $83.2 million, or $0.98 per diluted share, versus $33.8 million, or $0.41 per diluted share, in 2020.
“Demand for our brands remains very strong as evidenced by continued strength in sell-through trends at retail and a robust order book that extends into Q3 2022,” said Krueger in a release. “We remain bullish on our outlook for the future in light of these trends and the composition of our portfolio which over-indexes on performance categories like hiking, running, and work.”
Nonetheless, SVP and CFO Mike Stornant highlighted that, due to the impact of the aforementioned factory closures on Wolverine Worldwide’s “ability to fully service the incredibly strong demand we are seeing in Q4,” the company has had to adjust its full-year financial outlook for fiscal 2021.
The group now expects its annual revenue to total around $2.4 billion, representing year-over-year growth of almost 35%, while diluted earnings per share are predicted to be in the range of $1.16 to $1.21.
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