Wolverine World Wide, the parent company of popular footwear brands such as Merrell, Sperry, and Hush Puppies, saw a decline of 16.1% in first-quarter revenues due to the Covid-19 pandemic. Despite the decrease in sales, the Michigan-based company is optimistic about its ability to rebound and emerge stronger from the crisis.

In the first quarter, which ended on March 28, 2020, Wolverine reported total revenue of $439.3 million, compared to $523.4 million during the same period last year. On a constant currency basis, the company’s revenue declined by 15.6% from last year. While the pandemic has undoubtedly affected their sales, Wolverine highlighted the positive performance of its e-commerce channels, which experienced a 17.5% increase in sales. This aligns with the trend of consumers shifting towards online shopping due to the global health situation.

Wolverine’s Michigan group, which includes brands like Bates, Cat footwear, Chaco, Harley-Davidson footwear, Hush Puppies, HyTest, Merrell, and Wolverine, saw an 18.1% decline in sales, dropping from $302.7 million to $247.8 million. Meanwhile, the Boston group, consisting of brands such as Keds, Saucony, and Sperry, reported a first-quarter revenue of $182.1 million, down 11.1% from $204.8 million last year.

In terms of earnings, Wolverine recorded $13.0 million, or $0.16 per diluted share, for the quarter, a significant decrease from $40.5 million, or $0.43 per diluted share, in the same period the previous year. Despite the challenges posed by the pandemic, Blake Krueger, Wolverine’s chairman, CEO, and president, expressed confidence in the company’s ability to weather the storm. He noted that many of their brands are resonating with consumers during the shelter-in-place restrictions, and their e-commerce business has experienced significant growth. Krueger believes that the company is well-positioned to overcome current obstacles and emerge stronger in the long run.

To address the economic disruption caused by Covid-19, Wolverine has implemented several initiatives. These include reducing planned inventory receipts by approximately $300 million, postponing $25 million of capital expenditures, and drawing down the remainder of its revolving credit line. The company has also reduced planned operating expenses by an estimated $100 million for the remainder of 2020 through furloughs, executive salary cuts, and organizational changes. With these measures in place, Wolverine aims to generate $150 million to $200 million of operating cash flow in 2020. As part of the organizational changes, Todd Spaletto, the former president of the Michigan group, has left the company. Additionally, three brand presidents have been promoted to Wolverine Worldwide’s executive leadership team, with expanded responsibilities.

Despite the current challenges, Wolverine Worldwide remains committed to its brands and is confident in its ability to adapt and succeed in these uncertain times. With a focus on e-commerce growth and cost-cutting measures, the company aims to not only withstand the impact of Covid-19 but also emerge stronger on the other side.

For more information about Wolverine World Wide, visit their official website:
https://www.wolverineworldwide.com/

To learn more about the impact of Covid-19 on the footwear industry, see this article:
https://www.businessoffashion.com/articles/coronavirus/coronavirus-fashion-luxury-brands-retail-stop-production-covid19