As the pandemic continues to drive the purchases of more athletic and casual styles, Saucony and Merrell are standing out in Wolverine World Wide Inc.’s portfolio — and that’s expected to continue well into the new year.
During a conference call with analysts, the Rockford, Mich.-based company’s management team shared that fourth-quarter sales at Wolverine Michigan Group — including Chaco, Cat Footwear, Hush Puppies, Merrell and Wolverine — dropped 17.1%, while sales at Wolverine Boston Group — with labels Keds, Saucony, Sperry and Stride Rite — fell 15.6%.
But for Saucony, revenues jumped mid-single digits in the fourth quarter, with gains across all of its major product categories and its website accelerating more than 65% in the three-month period. Merrell, on the other hand, was down low double digits but delivered high single-digit growth in its home turf of North America, with e-commerce up more than 60%.
“The global pandemic has changed the way we operate, and we expect it will continue to impact our global business for at least the next year. Despite these macro challenges, we believe that the positive trends in our business that strengthened in the second half of 2020 will improve in 2021,” explained SVP and CFO Mike Stornant. “Our brands continue to build momentum, particularly those in performance, athletic, outdoor and work categories, with Saucony and Merrell leading the way.”
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What’s more, the executive team shared that Saucony is expected to see a 50% surge in Q1 2021 revenues, and sales at Merrell are forecasted to advance roughly 20% in that same quarter, with “even stronger growth” expected in Q2 2020 and beyond.
“Saucony’s momentum is accelerating, and we believe the brand is poised to maximize big opportunities in the fast-growing running and lifestyle sneaker categories,” said WWW president and director Brendan Hoffman.
As for Merrell, which is celebrating its 40th anniversary this year, Hoffman shared that the label will be the first among Wolverine’s portfolio to launch its mobile app this spring. “Merrell is anchored in the outdoors and leads the growing U.S. hiking market, where it is gaining share and expanding its retail distribution,” he added. “Merrell’s owned e-commerce business is the largest in the portfolio, and we anticipate it will contribute the most dollar growth in 2021.”
By brand, Sperry’s revenues for the fourth quarter tumbled 20% — a “sequential improvement” versus the prior two quarters — and are expected to return to double-digit growth this year. The Wolverine brand, on the other hand, is forecasted to see 20% in revenue gains in the upcoming first quarter.
For the three months ended Jan. 2, Wolverine logged adjusted earnings per share of 21 cents, compared with the prior year’s earnings per share of 59 cents. Analysts had anticipated earnings of 17 cents per share. Revenues declined 16.1% to $509.6 million but still beat consensus estimates of $478.99 million.
The retail group also provided an initial revenue and earnings outlook for the full year: Adjusted earnings per share are expected to be in the range of $1.90 to $2.05, while revenues are predicted to advance 22% to 26% to the range of $2.19 billion to $2.25 billion, approaching the high end of the range of 2019 revenues. Wolverine also shared a target of $500 million in owned e-commerce sales — more than double those from the 2019 fiscal year.
“As vaccines are rolled out and restrictions are eased, we believe consumers will begin to return to social activities and we will see a meaningful increase in consumer spending,” said chairman and CEO Blake Krueger. “Despite these macro factors, we are excited about 2021 and are confident in our ability to deliver a strong recovery. In this environment, our brands are poised to win.”
