WOLVERINE WORLD WIDE INC /DE/

Previous wording

The Company’s brands are marketed in approximately 170 countries and territories at September 28, 2024, including through owned operations in the U.S., Canada, the United Kingdom and certain countries in continental Europe and Asia Pacific. In other regions (Latin America, portions of Europe and Asia Pacific, the Middle East and Africa), the Company relies on a network of third-party distributors, licensees and joint ventures. At September 28, 2024, the Company operated 120 retail stores in the U.S., Europe and Canada and 39 direct-to-consumer eCommerce sites.

Current wording

The Company’s brands are marketed in approximately 170 countries and territories at March 29, 2025, including through owned operations in the U.S., Canada, the United Kingdom and certain countries in continental Europe and Asia Pacific. In other regions (Latin America, portions of Europe and Asia Pacific, the Middle East and Africa), the Company relies on a network of third-party distributors, licensees and joint ventures. At March 29, 2025, the Company operated 120 retail stores in the U.S., United Kingdom, Ireland and Italy and 39 direct-to-consumer eCommerce sites.

Previous wording

Effective January 1, 2024, the Company completed the sale of the Company’s equity interest in the Merrell® and Saucony® joint venture entities.

Current wording

Effective January 1, 2024, the Company completed the sale of the Company’s equity interests in the Merrell® and Saucony® China joint venture entities.

Previous wording

Effective May 4, 2024, the Company entered into global multi-year licensing agreements of the Merrell®and Saucony® kids footwear and Merrell® apparel and accessories.

Current wording

Effective May 4, 2024, the Company entered into global multi-year licensing agreements relating to Merrell®and Saucony® kids footwear and Merrell® apparel and accessories.

Previous wording

•The effective tax rates in the third quarters of 2024 and 2023 were 17.7% and 4.6%, respectively.

Current wording

•The effective tax rates in the first quarters of 2025 and 2024 were 7.5% and 4.1%, respectively.

Previous wording

•Diluted earnings per share for the third quarter of 2024 were $0.28 per share compared to diluted earnings per share of $0.11 per share for the third quarter of 2023.

Current wording

•Diluted earnings per share for the first quarter of 2025 was $0.13 per share compared to diluted loss per share of $0.19 per share for the first quarter of 2024.

Previous wording

•The Company declared cash dividends of $0.10 per share in the third quarters of both 2024 and 2023.

Current wording

•The Company declared cash dividends of $0.10 per share in the first quarters of both 2025 and 2024.

Previous wording

•Cash flow provided by operating activities was $97.7 million for the first three quarters of 2024 compared to cash flow provided by operating activities of $7.0 million for the first three quarters of 2023.

Current wording

•Cash flow used in operating activities was $83.8 million for the first quarter of 2025 compared to cash flow used in operating activities of $37.2 million for the first quarter of 2024.

Previous wording

•Compared to the third quarter of 2023, inventory as of the third quarter of 2024 decreased $278.3 million, or 49.4%.

Current wording

•Compared to the first quarter of 2024, inventory as of the end of the first quarter of 2025 decreased $83.6 million, or 23.6%.

Previous wording

Revenue was $440.2 million for the third quarter of 2024, representing a decrease of $87.5 million compared to the third quarter of 2023. The change in revenue reflected a $9.9 million, or 3.0%, decrease from the Active Group, a $13.9 million, or 11.3%, decrease from the Work Group, and a $63.7 million, or 83.7%, decrease from Other. The Active Group’s revenue decrease was primarily driven by a decrease of $11.5 million from Saucony®and $2.0 million from Chaco®partially offset by an increase of $2.2 million from Merrell®and $1.4 million from Sweaty Betty®. The Work Group’s revenue decrease was primarily driven by a decrease of $6.9 million from Wolverine®, $4.6 million from Cat®, and $0.9 million from Bates®. The decrease in Other revenue was primarily driven by a decrease in revenue from businesses that were sold in 2023 and 2024 and the licensing of the Hush Puppies®business, which includes decreases of $45.8 million from Sperry®, $8.2 million from the performance leathers business and $7.7 million from Hush Puppies®. Changes in foreign exchange rates increased revenue by $1.9 million during the third quarter of 2024. Direct-to-consumer revenue decreased during the third quarter of 2024 by $24.2 million, or 17.7%, compared to the third quarter of 2023.

Current wording

Revenue was $412.3 million for the first quarter of 2025, representing an increase of $17.4 million compared to the first quarter of 2024. The change in revenue reflected a $36.9 million, or 12.7%, increase from the Active Group, a $15.3 million, or 17.0%, decrease from the Work Group, and a $4.2 million, or 28.0%, decrease from Other. The Active Group’s revenue increase was primarily driven by an increase of $29.6 million from Saucony®and $17.6 million from Merrell®, partially offset by a decrease of $7.1 million from Sweaty Betty®and $3.2 million from Chaco®. The Work Group’s revenue decrease was primarily driven by a decrease of $7.5 million from Cat®, $3.8 million from Wolverine®, $2.2 million from HYTEST® and $1.2 million from Harley-Davidson®. The decrease in Other revenue was primarily driven by a decrease of $4.1 million from Sperry®which was sold in 2024, partially offset by an increase of $1.0 million from Hush Puppies®. Changes in foreign exchange rates decreased revenue by $4.7 million during the first quarter of 2025. Direct-to-consumer revenue decreased during the first quarter of 2025 by $10.0 million, or 9.4%, compared to the first quarter of 2024.

Previous wording

Gross margin was 45.3% in the third quarter of 2024 compared to 40.8% in the third quarter of 2023. The gross margin increase in the third quarter was primarily driven by less end-of-life inventory sales and lower supply chain costs.

Current wording

Gross margin was 47.3% in the first quarter of 2025 compared to 45.9% in the first quarter of 2024. The gross margin increase in the first quarter was primarily due to healthier sales mix, lower promotional activity and the benefit of supply chain cost initiatives within the Active Group.

Previous wording

Operating expenses decreased $24.1 million, from $188.1 million in the third quarter of 2023 to $164.0 million in the third quarter of 2024. The decrease was primarily driven by lower impairment of long-lived and intangible assets ($40.2 million), lower selling costs ($12.6 million), lower advertising costs ($7.3 million), lower distribution costs ($7.2 million), lower general and administrative costs ($6.5 million), lower reorganization costs ($3.7 million), lower product development costs ($1.7 million), and lower environmental and other related costs, net of insurance recoveries ($1.0 million), partially offset by lower gains on the sale of businesses, trademarks, and intangible assets ($49.2 million) and higher incentive compensation costs ($8.2 million). Environmental and other related costs were $2.2 million and $2.3 million in the third quarter of 2024 and 2023, respectively.

Current wording

Operating expenses decreased $9.4 million, from $184.5 million in the first quarter of 2024 to $175.1 million in the first quarter of 2025. The decrease was primarily driven by lower impairment of long-lived and intangible assets ($6.1 million), lower reorganization costs ($4.1 million), lower general and administrative costs ($3.3 million), lower selling costs ($1.6 million), lower distribution costs ($0.5 million) and lower incentive compensation costs ($0.2 million), partially offset by higher advertising costs ($4.9 million) and higher environmental and other related costs, net of insurance recoveries ($1.5 million). Environmental and other related costs were $3.1 million and $1.9 million in the first quarter of 2025 and 2024, respectively.

Previous wording

Net interest expense was $9.6 million in the third quarter of 2024 compared to $15.5 million in the third quarter of 2023. Net interest expense was $33.5 million in the first three quarters of 2024 compared to $47.4 million in the first three quarters of 2023. The decrease in interest expense for both the quarter-to-date and year-to-date periods is due to lower average principal balances of variable rate debt and lower weighted average interest rates on variable rate debt.

Current wording

Net interest expense was $8.0 million in the first quarter of 2025 compared to $12.0 million in the first quarter of 2024. The decrease in interest expense is primarily due to lower average principal balances of variable rate debt and lower weighted average interest rates on variable rate debt.

Previous wording

Kids' footwear offerings from Saucony®, Sperry®, Keds®, Merrell®, Hush Puppies® and Cat® are included with the applicable brand.

Current wording

Kids' footwear offerings from Saucony®, Merrell®, Hush Puppies® and Cat® are included with the applicable brand.

Previous wording

The Company also reports “Other” and “Corporate” categories. The Other category consists of Sperry® footwear, Keds® footwear, Hush Puppies® footwear and apparel, the Company’s leather marketing operations, sourcing operations that include third-party commission revenues, multi-branded direct-to-consumer retail stores and the Stride Rite® licensed business. The Corporate category consists of gains on the sale of businesses and trademarks, unallocated corporate expenses, such as corporate employee costs, corporate facility costs, reorganization activities, impairment of long-lived assets and environmental and other related costs.

Current wording

The Company also reports “Other” and “Corporate” categories. The Other category consists of Sperry® footwear, Hush Puppies® footwear and apparel, sourcing operations that include third-party commission revenues, multi-branded direct-to-consumer retail stores and the Stride Rite® licensed business. The Corporate category consists of unallocated corporate expenses, such as corporate employee costs, corporate facility costs, reorganization activities, impairment of long-lived assets and environmental and other related costs.

Previous wording

The Active Group’s revenue decreased $183.4 million, or 16.7%, in the first three quarters of 2024 compared to the first three quarters of 2023. The revenue decrease was primarily driven by decreases of $83.8 million from Saucony®, $79.0 million from Merrell®, and $19.7 million from Chaco®. The Saucony® decrease was primarily driven by lower end of life inventory sales compared to the prior year, the divestiture of the China joint venture entity, effective January 1, 2024, and lower Saucony® kids revenue resulting from licensing the brand in the United States and Canada starting in the second quarter of 2024. The Merrell® decrease was primarily due to lower end of life inventory sales compared to the prior year, softer consumer demand in the U.S. wholesale and International channels and lower Merrell® kids revenue resulting from licensing the brand in the United States and Canada starting in the second quarter of 2024. The Chaco® decrease was primarily due to lower closeout and end of life inventory sales compared to the prior year and softer consumer demand.

Current wording

The Active Group’s revenue increased $36.9 million, or 12.7%, in the first quarter of 2025 compared to the first quarter of 2024. The revenue increase was primarily driven by increases of $29.6 million from Saucony®and $17.6 million from Merrell®, partially offset by decreases of $7.1 million from Sweaty Betty® and $3.2 million from Chaco®. The Saucony® increase was primarily driven by the strength and expanded sales of lifestyle product, including ProGrid Omni 9 and ProGrid Triumph 4, and strong performance in the international channel. The Merrell® increase was primarily due to growth in the core brand franchises, including Moab 3, Moab Speed, and Speed Strike, particularly in the wholesale and international channels. The Sweaty Betty®decrease was primarily driven by softer consumer demand in direct-to-consumer channels and lower closeout sales compared to the prior year. The Chaco® decrease was primarily due to lower closeout sales compared to the prior year and softer consumer demand.

Previous wording

The Active Group’s operating profit increased $20.6 million, or 63.0%, in the third quarter of 2024 compared to the third quarter of 2023. The operating profit increase was due to a 320 basis point increase in gross margin and a $14.5 million decrease in selling, general and administrative expenses, partially offset by revenue decreases. The Active Group’s operating profit increased $7.0 million, or 5.6%, in the first three quarters of 2024 compared to the first three quarters of 2023. The operating profit increase was due to a 420 basis point increase in gross margin and a $45.3 million decrease in selling, general and administrative expenses, partially offset by revenue decreases. The increase in gross margin in the current year period was due to decreased closeout sales, lower product costs, and lower supply chain costs. The decrease in selling, general and administrative expenses in the current year periods was primarily due to lower advertising costs, selling expenses and distribution costs.

Current wording

The Active Group’s operating profit increased $21.9 million, or 60.5%, in the first quarter of 2025 compared to the first quarter of 2024. The operating profit increase was due to revenue increases and a 340 basis point increase in gross margin, partially offset by a $5.7 million increase in selling, general and administrative expenses. The increase in gross margin in the current year period was primarily due to healthier sales mix, lower promotional activity and the benefit of supply chain cost initiatives. The increase in selling, general and administrative expenses in the current year period was primarily due to higher advertising costs.

Previous wording

The Work Group’s revenue decreased $13.9 million, or 11.3%, during the third quarter of 2024 compared to the third quarter of 2023. The revenue decrease was primarily driven by decreases of $6.9 million from Wolverine®, $4.6 million from Cat®, and $0.9 million from Bates®. The Work Group’s revenue decreased $51.1 million, or 14.4%, during the first three quarters of 2024 compared to the first three quarters of 2023. The revenue decrease was primarily driven by decreases of $18.7 million from Wolverine®, $18.7 million from Cat®, $6.4 million from HYTEST®, $4.0 million from Harley-Davidson® and $3.3 million from Bates®. The Wolverine® decrease was primarily due to softer consumer demand in the U.S. wholesale channel, inventory shortages resulting from supply chain constraints, and lower closeout sales compared to the prior year. The Cat®decrease was primarily due to timing of shipments in the U.S. and international channels, lower closeout sales versus the prior year and softer consumer demand in the international wholesale and direct-to-consumer channels. The HYTEST®decrease was primarily due to lower closeout sales compared to the prior year. The Harley-Davidson® decrease was primarily due to declines in top dealer accounts. The Bates® decrease was primarily due to softer consumer demand in the U.S. direct-to-consumer channels, high inventory levels at certain retail customers, and lower closeout sales versus the prior year.

Current wording

The Work Group’s revenue decreased $15.3 million, or 17.0%, during the first quarter of 2025 compared to the first quarter of 2024. The revenue decrease was primarily driven by decreases of $7.5 million from Cat®, $3.8 million from Wolverine®, $2.2 million from HYTEST® and $1.2 million from Harley-Davidson®. The Cat®decrease was primarily due to timing of shipments in the U.S. and international channels and softer consumer demand in the international channel. The Wolverine® decrease was primarily due to timing of shipments in the U.S. and international channels and softer consumer demand in the U.S. wholesale channel. The HYTEST®decrease was primarily due to softer consumer demand in the U.S. wholesale channels and high inventory levels at certain retail customers. The Harley-Davidson® decrease was primarily due to declines in top dealer accounts.

Previous wording

The Work Group’s operating profit increased $0.9 million, or 5.8%, in the third quarter of 2024 compared to the third quarter of 2023. The operating profit increase was due to a 140 basis point increase in gross margin and a $4.2 million decrease in selling, general and administrative expenses, partially offset by revenue decreases. The Work Group’s operating profit decreased $2.1 million, or 4.6%, in the first three quarters of 2024 compared to the first three quarters of 2023. The operating profit decrease was due to revenue decreases, partially offset by a 190 basis point increase in gross margin and a $9.5 million decrease in selling, general and administrative expenses. The increase in gross margin in the current year periods was due to decreased closeout sales, product mix and favorable average selling price. The decrease in selling, general and administrative expenses in the current year periods was primarily due to lower advertising costs and selling expenses.

Current wording

The Work Group’s operating profit decreased $5.6 million, or 44.1%, in the first quarter of 2025 compared to the first quarter of 2024. The operating profit decrease was due to revenue decreases and a 130 basis point decrease in gross margin, partially offset by a $1.2 million decrease in selling, general and administrative expenses. The decrease in gross margin in the current year period was primarily due to unfavorable sales mix changes. The decrease in selling, general and administrative expenses in the current year period was primarily due to lower employee costs and selling expenses.

Previous wording

(2)Amounts are net of both borrowings, if any, and outstanding standby letters of credit in accordance with the terms of the revolving credit facility.

Current wording

(1)Amounts are net of both borrowings, if any, and outstanding standby letters of credit in accordance with the terms of the revolving credit facility.

Previous wording

Cash and cash equivalents of $140.2 million as of September 28, 2024 were $24.5 million lower compared to September 30, 2023. The decrease is due primarily to repayments less borrowings of debt of $395.0 million, cash dividends paid of $32.5 million, and additions to property, plant and equipment of $8.3 million, partially offset by cash provided by operating activities of $212.5 million, proceeds from divestitures of $155.3 million, contributions from noncontrolling interests of $29.1 million, proceeds from company-owned life insurance policy liquidations of $7.9 million and financing proceeds from company-owned life insurance policies of $7.0 million. The Company had $867.9 million of borrowing capacity available under the revolving facility as of September 28, 2024. Cash and cash equivalents located in foreign jurisdictions totaled $130.1 million as of September 28, 2024.

Current wording

Cash and cash equivalents of $106.5 million as of March 29, 2025 were $63.2 million lower compared to March 30, 2024. The decrease is due primarily to repayments less borrowings of debt of $147.5 million, cash dividends paid of $32.9 million, additions to property, plant and equipment of $22.7 million, and employee taxes paid under stock-based compensation of $8.7 million, partially offset by cash provided by operating activities of $133.5 million, proceeds from divestitures of $9.9 million, and proceeds from company-owned life insurance policies of $7.9 million. The Company had $659.0 million of borrowing capacity available under the Revolving Facility as of March 29, 2025. Cash and cash equivalents located in foreign jurisdictions totaled $95.0 million as of March 29, 2025.

Previous wording

The Company did not repurchase shares during the first three quarters of both 2024 and 2023.

Current wording

The Company did not repurchase shares of its common stock during the first quarter of both 2025 and 2024.

Previous wording

A detailed discussion of environmental remediation costs is found in Note 15 to the consolidated condensed financial statements. The Company has established a reserve for estimated environmental remediation costs based upon an evaluation of currently available facts with respect to each individual site. As of September 28, 2024, the Company had a reserve of $40.6 million, of which $18.8 million is expected to be paid in the next 12 months and is recorded as a current obligation in other accrued liabilities, and the remaining $21.8 million is recorded in other liabilities and is expected to be paid over the course of up to 25 years. It is difficult to estimate the cost of environmental compliance and remediation given the uncertainties regarding the interpretation and enforcement of applicable environmental laws and regulations, the extent of environmental contamination and the existence of alternative cleanup methods.

Current wording

A detailed discussion of environmental remediation costs is found in Note 15 to the consolidated condensed financial statements. The Company has established a reserve for estimated environmental remediation costs based upon an evaluation of currently available facts with respect to each individual affected site. As of March 29, 2025, the Company has a reserve of $37.2 million, of which $17.0 million is expected to be paid in the next 12 months and is recorded as a current obligation in other accrued liabilities and the remaining $20.2 million recorded in other liabilities and expected to be paid over the course of up to 25 years. The Company's remediation activity at its former Tannery site and sites where the Company disposed of Tannery byproducts is ongoing. It is difficult to estimate the cost of environmental compliance and remediation given the uncertainties regarding the interpretation and enforcement of applicable environmental laws and regulations, the extent of environmental contamination and the existence of alternative cleanup methods.

Previous wording

The Company’s Credit Agreement provides for a term loan A facility (the “Term Facility”) and for a revolving credit facility (the “Revolving Facility” and, together with the Term Facility, the “Senior Credit Facilities”). The maturity date of the loans under the Senior Credit Facilities is October 21, 2026. The Credit Agreement provides for a debt capacity of up to an aggregate debt amount (including outstanding term loan principal and revolver commitment amounts in addition to permitted incremental debt)not to exceed $2.0 billion unless certain specified conditions set forth in the Credit Agreement are met. The Revolving Facility allowed the Company to borrow up to an aggregate amount of $1.0 billion.

Current wording

The Company’s credit agreement provides for a term loan A facility (the “Term Facility”) and for a revolving credit facility (the “Revolving Facility” and, together with the Term Facility, the “Senior Credit Facilities”). The maturity date of the loans under the Senior Credit Facilities is October 21, 2026. The credit agreement provides for a debt capacity of up to an aggregate debt amount (including outstanding term loan principal and revolver commitment amounts in addition to permitted incremental debt)not to exceed $2.0 billion unless certain specified conditions set forth in the credit agreement are met. The Revolving Facility allows the Company to borrow up to an aggregate amount of $800.0 million.

Previous wording

For the first three quarters of 2024, a decrease in net working capital represented a source of cash of $31.8 million. Working capital balances were favorably impacted by a decrease in inventories of $87.2 million and an increase in accounts payable of $22.3 million, partially offset by a decrease in other operating liabilities of $46.7 million, an increase in other operating assets of $15.4 million, an increase in accounts receivable of $10.8 million and a decrease in income taxes payable of $4.8 million. Operating cash flows included depreciation and amortization expense adjustment of $19.4 million, impairment of long-lived assets of $9.3 million, stock-based compensation expense adjustment of $15.0 million, environmental and other related costs, net of cash payments and recoveries received cash outflow of $10.1 million, gain on sale of business of $8.5 million, and deferred income taxes of $23.5 million.

Current wording

For the first quarter of 2025, an increase in net working capital represented a use of cash of $100.9 million. Working capital balances were unfavorably impacted by an increase in accounts receivable of $26.6 million, an increase in inventories of $25.8 million, a decrease in accounts payable of $29.2 million, and a decrease in other operating liabilities of $21.6 million, partially offset by a decrease in other operating assets of $2.3 million. Operating cash flows included non-cash add back for environmental and other related costs, net of cash payments and recoveries received, cash outflow of $4.5 million, depreciation and amortization expense adjustment of $6.1 million, stock-based compensation expense adjustment of $5.7 million, pension expense adjustment of $0.2 million, and deferred income taxes of $0.1 million.

Previous wording

The Company made capital expenditures of $12.2 million and $18.5 million in the first three quarters of 2024 and 2023, respectively, for corporate headquarters improvements, eCommerce sites, distribution operations improvements and information systems and technology. The current year investing activity includes proceeds from divestitures of $102.4 million.

Current wording

The Company made capital expenditures of $7.6 million and $5.1 million in the first quarter of 2025 and 2024, respectively, for corporate headquarters building improvements, and eCommerce site and information system enhancements.

Previous wording

The current year activity includes net payments under the Revolving Facility of $180.0 million. The Company paid $39.2 million and $7.5 million in principal payments associated with its financing arrangements during the first three quarters of 2024 and 2023, respectively. The Company paid $2.0 million and $5.8 million during the first three quarters of 2024 and 2023, respectively, in connection with shares or units withheld to pay employee taxes related to awards under stock incentive plans. The Company did not repurchase sharesin the first three quarters of 2024 or 2023.

Current wording

The current year debt activity includes net borrowings under the Revolving Facility of $65.0 million. The Company paid $2.5 million and $24.2 million in principal payments associated with its long-term debt during the first quarter of 2025 and 2024, respectively. The Company paid $7.7 million and $1.6 million during the first quarter of 2025 and 2024, respectively, in connection with shares or units withheld to pay employee taxes related to awards under stock incentive plans. The Company did not repurchase sharesin the first quarter of 2025 or 2024.

Previous wording

The Company declared cash dividends of $0.30 per share duringthe first three quarters of 2024 and 2023. Dividends paid in the first three quarters of 2024 and 2023 totaled $24.4 million and $24.5 million, resp ectively. A quarterly dividend of $0.10 per share was declared on October 30, 2024 to shareholders of record on January 2, 2025.

Current wording

The Company declared cash dividends of $0.10 per share duringthe first quarter of 2025 and 2024. Dividends paid in the first quarter of 2025 and 2024 totaled $8.5 million and $8.1 million, resp ectively. A quarterly dividend of $0.10 per share was declared on April 30, 2025 to shareholders of record on July 1, 2025.

Previous wording

The preparation of the Company’s consolidated condensed financial statements, which have been prepared in accordance with U.S. GAAP, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates these estimates. Estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Historically, actual results have not been materially different from the Company’s estimates. However, actual results may differ materially from these estimates under different assumptions or conditions.

Current wording

The preparation of the Company’s consolidated condensed financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP"), requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates these estimates. Estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Historically, actual results have not been materially different from the Company’s estimates. However, actual results may differ materially from these estimates under different assumptions or conditions.