Wolverine World Wide, Inc. · NYSE:WWW
Wolverine World Wide — Q2 2023 Earnings Presentation
28 slides from Wolverine World Wide's earnings presentation, Aug 10, 2023
Slide 1: Investor Presentation Second Quarter 2023
INVESTOR PRESENTATION Second quarter 2023, ending July 1, 2023
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements, including statements regarding: opportunities for the Company’s brands in owned and JV-operated markets; focus on stabilizing Sweaty Betty in the UK and Ireland while improving profitability; focus on stabilizing Sperr
Slide 3: Guiding Principles
Guiding Principles Guiding Principles Pursue Simplicity Only Priorities Fanatically Brand Forward Inclusive & Inspired by Actively build simplicity Make fewer, bigger The connection between our Each Other into everything we do bets against our brands and our consumers is We are at our best to make o
Slide 4: Our New CEO
Our New CEO The Board took a decisive step and appointed Chris Hufnagel as the new President and Chief Executive Officer to execute our vision and deliver improved financial performance Chris is an experienced leader in the industry with a deep understanding of the business and the skillset necessar
Slide 5: Important Steps Taken to Reposition the Business
Important Steps Taken to Reposition the Business We are aligning our organization around the principles that we need to be both bolder and faster as seen in the initial actions we have already taken to streamline our operations and increase profits, which include: • Appointed new President and Chief
Slide 6: Path to 2024 Operating Margin Improvement
Path to 2024 Operating Margin Improvement Based on ~$2 Billion 2023 Proforma Revenue (Excluding Sperry) Transitory Costs Exiting the Run-Rate $ Value -1.5% +3.3% Transitory Supply Chain Costs $60M -2.6% Abnormal End-of-Life Sales Mix $20M 12.0% Total (Excludes Sperry) $80M +3.3% 2023 Profit Improvem
Slide 7: Brands + Product
* Brands + Product / + 0 OE, | re | Zee ee Ore ee
Slide 8: Merrell brand overview and performance
#1 Hike Financial Performance Full Year 2022: Brand Purpose: Merrell exists to share the simple power of being outside with everyone. Our purpose is to Revenue: $764M ensure that all people can access, explore, and enjoy the outdoors. We are focused on breaking down barriers, empowering our communit
Slide 9: Saucony brand overview and performance
Financial Performance Brand Purpose: Full Year 2022: We exist to inspire and enable people to live a better life through Revenue: $505M running culture, self-expression and their impact on the world. • +6% vs. ‘21 Key Franchises: Q2 2023 Revenue: • Ride, Triumph, Peregrine • $142M (+2% vs. ’22) • En
Slide 10: Sweaty Betty brand overview and performance
Financial Performance Brand Mission: Full Year 2022: Empowering Women through Fitness and Beyond Revenue: $212M • -14% vs. ‘211 Brand Positioning: Sweaty Betty is a dynamic, fashion-forward performance brand offering fearlessly Q2 2023 Revenue: feminine activewear with a contemporary technical edge
Slide 11: Wolverine brand overview and performance
#1 Work Boots Financial Performance Brand Purpose: We exist to support the people who forge their own path; those who stop at nothing to build the future Full Year 2022: they want. Revenue: $248M Key Franchises: • +9% vs. ‘21 Q2 2023 Revenue: Floorhand Rancher Raider Durashocks Torrent • $41M (-28%
Slide 12: Sperry brand overview and performance
#1 Boat #1 Financial Performance Rain Full Year 2022: Brand Purpose: Boots ALL FOR WATER & WATER FOR ALL Revenue: $294M We believe in the power of water. And we will always work to share, • -10% vs. ‘21 celebrate, and protect it. Q2 2023 Revenue: Key Franchises: • $57M (-24% vs. ’22) • Boat, Crest V
Slide 13: Financial Results
Financial Results A | a ge
Slide 14: Second Quarter 2023 Review
Second Quarter 2023 Review | 14
Slide 15: Second Quarter Brand Group Performance
Second Quarter Brand Group Performance ACTIVE Revenue: $383.3M % Change vs. Q2 2022: -10.5% WORK Revenue: $117.8M % Change vs. Q2 2022: -15.6% LIFESTYLE¹ Revenue: $74.9M % Change vs. Q2 2022: -22.8% 1) Ongoing Lifestyle Group excludes Keds due to the sale of the business in February 2023. Reconcilia
Slide 16: Q2 2023 Results
Q2 2023 Results Adjusted(1) Adjusted(1) Adjusted(1) Adjusted(1) Revenue Gross Margin Operating Margin EPS $578.2M 39.2% 5.8% $0.19 -13.9% (470 bps) (560 bps) (70.8%) -13.8% Constant Currency2 (67.7%) Constant Currency2 • Second quarter revenue for our ongoing business of $578 million was in line wit
Slide 17: Net Debt and Liquidity
Net Debt and Liquidity End of Second Quarter 2023 2023 Outlook Gross Debt: $1.11B We expect to generate operating free cash flow of $80 million to $100 million. Less: Cash & Cash Equivalents $0.18B Net Debt: $0.93B We expect year-end net debt of approximately Available Liquidity: $370M $850 million
Slide 18: 2023 Full Year Financial Guidance
2023 Full Year Financial Guidance Financial results and guidance for 2023, and comparable results from 2022 for our ongoing business exclude the impact of Keds, which was sold in February 2023, and Wolverine Leathers, which is the subject of a sale process, and reflect an adjustment for the transiti
Slide 19: 2023 Full Year Financial Guidance for Ongoing Business
2023 Full Year Financial Guidance for Ongoing Business Revenue Adjusted(1) Adjusted(1) Adjusted(1) Gross Margin Operating Margin EPS $2.26B - $2.28B Approximately Approximately $0.45 - $0.55 -10.7% to -10.0% 40.0% 5.0% ($1.37 Pro Forma EPS in 2022) • The trading environment is challenging, especiall
Slide 20: Supplemental Financial Tables
Supplemental Financial Tables | 20
Slide 21: 2023 Estimated Transitory Supply Chain Expenses and Profit Improvement Initiatives
2023 Estimated Transitory Supply Chain Expenses and Profit Improvement Initiatives The supplemental information included below about estimated transitory supply chain expenses and profit improvement initiative savings are intended to show the quarterly timing of the impact of these items. The transi
Slide 22: Full Year 2022 and 2021 Revenue and Operating Profit by Group
Full Year 2022 and 2021 Revenue and Operating Profit by Group (In millions) Fiscal Year REVENUE 2022 2021 Change % Change Active Group $ 1,570.2 $ 1,319.6 $ 250.6 19.0% Work Group 590.5 548.8 41.7 7.6% Lifestyle Group 447.5 477.0 (29.5) (6.2%) Other 76.6 69.5 7.1 10.2% Total $ 2,684.8 $ 2,414.9 $ 26
Slide 23: Full Year and Quarterly 2022 and 2021 Revenue – Top Brands Including Kids
Full Year and Quarterly 2022 and 2021 Revenue – Top Brands Including Kids (In millions) Q1 2022 Q1 2021 Q2 2022 Q2 2021 Q3 2022 Q3 2021 Q4 2022 Q4 2021 FY 2022 FY 2021 Merrell $ 153.3 $ 154.5 $ 209.7 $ 184.9 $ 207.3 $ 155.4 $ 193.9 $ 152.7 $ 764.2 $ 647.4 Saucony 109.4 108.0 139.4 132.3 135.3 138.6
Slide 24: GAAP to Non-GAAP Adjustments
GAAP to Non-GAAP Adjustments RECONCILIATION OF REPORTED REVENUE RECONCILIATION OF REPORTED REVENUE TO ADJUSTED REVENUE ON A CONSTANT CURRENCY BASIS* TO ADJUSTED REVENUE* (Unaudited) (Unaudited) (In millions) (In millions) Foreign Constant Prior Year Constant GAAP Exchange Currency GAAP Currency Repo
Slide 25: GAAP to Non-GAAP Adjustments
GAAP to Non-GAAP Adjustments RECONCILIATION OF REPORTED OPERATING MARGIN RECONCILIATION OF REPORTED GROSS MARGIN TO ADJUSTED OPERATING MARGIN TO ADJUSTED GROSS MARGIN * (Unaudited) (Unaudited) (In millions) (In millions) GAAP Basis Adjustments (1) Divestiture (2) As Adjusted GAAP Basis Adjustments (
Slide 26: GAAP to Non-GAAP Adjustments
GAAP to Non-GAAP Adjustments RECONCILIATION OF REPORTED DILUTED EPS TO ADJUSTED DILUTED EPS* (Unaudited) As Adjusted (In millions) Foreign EPS on a GAAP As Exchange Constant Basis Adjustments1 Adjusted Impact Currency Basis EPS - Fiscal 2022 $ (2.37) $ 3.78 $ 1.41 $ 0.19 $ 1.60 2022 adjustment refle
Slide 27: Contact Us
Contact Us INVESTOR.RELATIONS@WWWINC.COM Mike Stornant Chief Financial Officer, EVP Alex Wiseman VP Finance, FP&A | 27
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