ROCKFORD, Mich. - Wolverine World Wide, Inc. (NYSE: NYSE:WWW) today reported a challenging fourth quarter, with earnings and revenue taking a hit amid broader strategic transformations. The company's reported Q4 adjusted EPS of ($0.30) fell short of the analyst consensus by $0.03, while revenue stood at $526.7 million, surpassing the expected $518.12 million.
Despite exceeding revenue estimates for the quarter, Wolverine World Wide's stock price experienced a downturn, reflecting investor concerns over the company's forward-looking guidance. For the full year 2024, the company forecasts adjusted EPS in the range of $0.65 to $0.85, notably below the analyst consensus of $0.85. Additionally, the anticipated FY2024 revenue is projected to be between $1.7 billion and $1.75 billion, which is significantly lower than the consensus estimate of $1.978 billion.
The company's fourth-quarter performance reflects a substantial year-over-year (YoY) revenue decline of 20.8%, with a more pronounced constant currency decline of 21.3%. The ongoing business revenue, which excludes the impact of divested units such as Keds and Wolverine Leathers, also saw a decline of 18.4% on a constant currency basis.
Chris Hufnagel, President and CEO, commented on the results, highlighting the company's progress in stabilizing its operations and improving its balance sheet. "We finished the year with revenue and earnings in-line with guidance, and inventory and debt levels better than expected," said Hufnagel. He emphasized the company's transformation into a more efficient and brand-focused organization, expressing confidence in driving long-term shareholder value despite the near-term challenges.
The company's gross margin improved YoY, climbing from 33.7% to 36.6%, attributed to lower promotional eCommerce sales and a healthier inventory level. However, adjusted operating margin dipped by 170 basis points to (3.5)%, and adjusted diluted EPS deteriorated by 130.8% YoY.
Inventory levels showed a significant reduction, halving from the previous year to $373.6 million. Net debt also saw a decrease, ending the quarter at $740 million, down $285 million YoY.
The company's outlook for 2024 reflects the stabilization efforts undertaken over the past six months, with an expected increase in gross margin by approximately 460 basis points compared to 2023. However, the cautious guidance suggests that Wolverine World Wide anticipates continued macroeconomic challenges, particularly in the first half of the year.
Investors reacted negatively to the earnings release and guidance, with the stock price moving downward, signaling a lack of confidence in the immediate future despite management's efforts to reposition the company for growth.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.