Second quarter revenue grew 13% and EPS
exceeded expectations
Wolverine World Wide, Inc. (NYSE: WWW) today reported financial
results for the second quarter ended July 2, 2022.
"Despite a slowdown in June shipments, we are pleased with
delivering record organic revenue in the quarter. We are encouraged
by 14% growth in our largest brand Merrell, and 45% growth in our
international business. We faced unplanned headwinds related to
elevated customer inventory, a stronger US dollar, and some
lingering supply chain delays, but our operating margin was
better-than-expected in the quarter. While we continue to expect
sequential growth acceleration in the second half, we now have a
revised outlook for the back-half of this year that assumes higher
promotional activity and elevated inventory in our wholesale
channels," said Brendan Hoffman, Wolverine Worldwide's President
and Chief Executive Officer. "During the second quarter, we made
very meaningful progress on the important strategy work we started
earlier in the year and remain excited about the future growth
potential of our brands."
SECOND-QUARTER 2022 FINANCIAL HIGHLIGHTS
(in millions)
July 2, 2022
July 3, 2021
Y/Y Change
Michigan Group
$389.7
$354.4
10.0%
Boston Group
$253.9
$258.0
(1.6)%
Other
$70.0
$19.5
259.0%
Total Revenue
$713.6
$631.9
12.9%
Supplemental Brand
Information
Merrell
203.6
178.6
14.0%
Saucony
135.5
126.5
7.2%
Sperry
70.1
80.9
(13.4)%
Wolverine
57.7
49.6
16.3%
Sweaty Betty
47.4
N/A
N/A
Reported:
Gross Margin
43.0%
42.8%
20 bps
Operating Margin
23.5%
10.1%
1340 bps
Diluted Earnings Per Share
$1.53
$0.53
188.7%
Non-GAAP:
Adjusted Gross Margin
43.0%
44.5%
(150 bps)
Adjusted Operating Margin
11.0%
12.6%
(160 bps)
Adjusted Diluted Earnings Per Share
$0.66
$0.67
(1.5)%
On August 2, 2021, Wolverine Worldwide acquired women’s
activewear brand Sweaty Betty, a digitally-native, premium global
apparel brand, which will continue to fuel growth and enhance the
Company’s eCommerce business. The information in the following
table excludes Sweaty Betty.
Non-GAAP Organic (Excluding Sweaty Betty)
(in millions)
July 2, 2022
July 3, 2021
Y/Y Change
Total Revenue
$666.2
$631.9
5.4%
Organic Gross Margin
42.3%
44.5%
(220 bps)
Organic Operating Margin
12.2%
12.6%
(40 bps)
Organic Diluted Earnings Per Share
$0.67
$0.67
—%
Revenue of $713.6 million represents growth of 12.9%
versus the prior year and 25.5% versus 2019. Excluding Sweaty
Betty, revenue was $666.2 million, a record for the quarter and up
17.2% compared to 2019. Our international business was especially
strong, up 45.3% to $295.2 million including Sweaty Betty and up
26.4% to $256.8 million excluding Sweaty Betty. Direct-to-Consumer
revenue including Sweaty Betty was up 21.1% to $166.2 million, and
excluding Sweaty Betty was down 8.2% to $125.9 million.
Gross margin of 43.0% was above expectations mostly due
to lower-than-expected closeout sales.
Selling, General & Administrative expenses of $139.2
million include a $90.0 million gain related to the sale of the
Champion trademarks that occurred on June 30th. Adjusted SG&A
expenses of $228.5 million or 32.0% of revenue, was 10 basis points
higher than the prior year including Sweaty Betty.
Inventory at the end of the quarter was $639.5 million,
up 93% versus the prior year. While factory capacity and delivery
performance have improved, logistics lead times and volatility are
still impacting our business. Excluding Sweaty Betty, organic
inventory increased 80% or $264.9 million compared to last year
when inventory levels were abnormally low. One third of this
increase, nearly $95 million, relates specifically to much higher
in-transit inventory. Organic inventory versus 2019 is up 47%.
Approximately 85% of this inventory is expected to be sold through
primary wholesale, digital and direct-to-consumer channels later
this year or during the 2023 selling seasons. We plan to liquidate
the remaining excess inventory pragmatically over the next several
months.
Total debt at the end of the quarter was $1,227.4
million. Total liquidity including cash and available borrowings
under the Company's revolving line of credit was approximately
$700.0 million.
Share repurchases: During the second quarter,
approximately 2.4 million shares were repurchased at an average
price of $19.47 per share. At the end of the quarter, the Company
had nearly $367 million available under its board-approved share
repurchase plan.
FULL-YEAR 2022 OUTLOOK
"The Company has performed well in the first half of 2022.
Several factors have impacted our outlook for the second half,
including certain negative trends that accelerated in June." said
Mike Stornant, Executive Vice President and Chief Financial
Officer. "We now expect a stronger US dollar, inflation, excess
inventory across channels and changing consumer behavior will have
a more meaningful negative impact on our industry and the Company
for the remainder of the year. We are adjusting our full-year
outlook accordingly."
- Revenue is expected to be in the range of $2.740 billion
to $2.790 billion, representing growth of approximately 14.0% to
16.0%. Foreign currency exchange rate fluctuations are expected to
have approximately $72.0 million (or 3.0%) negative impact on
full-year reported growth.
- Diluted earnings per share are expected to be between
$2.62 to $2.72 and adjusted diluted earnings per share are expected
to be between $2.10 to $2.20, representing growth of 0.5% to 5.3%.
Foreign currency exchange rate fluctuations are expected to have a
$0.11 negative impact on full-year EPS.
- Gross margin is expected to be approximately 42.5%,
assuming an increased promotional and markdown cadence and a higher
mix of lower-margin international third-party sales in the back
half of the year.
- Operating margin is expected to be approximately 11.5%
and adjusted operating margin is expected to be approximately 9.5%,
reflecting increased promotional costs and higher inventory
handling costs.
- The effective tax rate is expected to be approximately
21.5%.
- Diluted weighted average shares are expected to be
approximately 80.0 million.
This outlook assumes no meaningful deterioration of current
market conditions related to the impact of the COVID-19 pandemic,
ongoing inflationary pressures, supply chain disruptions, changes
in consumer behavior and confidence and geopolitical tensions.
NON-GAAP FINANCIAL MEASURES
Measures referred to in this release as “adjusted” financial
results are non-GAAP measures that exclude the gain on the sale of
the Champion trademarks, environmental and other related costs net
of recoveries, costs associated with Sweaty Betty® integration and
costs related to the COVID-19 pandemic including air freight costs.
Measures referred to in this release as “adjusted organic”
financial results are non-GAAP measures that exclude the results of
Sweaty Betty®. The Company also presents constant currency
information, which is a non-GAAP measure that excludes the impact
of fluctuations in foreign currency exchange rates. The Company
calculates constant currency basis by converting the current-period
local currency financial results using the prior period exchange
rates and comparing these adjusted amounts to the Company's current
period reported results. The Company believes providing each of
these non-GAAP measures provides valuable supplemental information
regarding its results of operations, consistent with how the
Company evaluates performance.
The Company has provided a reconciliation of each of the above
non-GAAP financial measures to the most directly comparable GAAP
financial measure. The Company believes these non-GAAP measures
provide useful information to both management and investors because
they increase the comparability of current period results to prior
period results by adjusting for certain items that may not be
indicative of core operating results and enable better
identification of trends in our business. The adjusted financial
results are used by management to, and allow investors to, evaluate
the operating performance of the Company on a comparable basis. The
adjusted organic financial results are used by management to, and
allow investors to, evaluate the aggregate operating performance of
the Company’s brands other than Sweaty Betty®. Management does not,
nor should investors, consider such non-GAAP financial measures in
isolation from, or as a substitute for, financial information
prepared in accordance with GAAP.
EARNINGS CALL INFORMATION
The Company will host a conference call today at 8:30 a.m. EST
to discuss these results and current business trends. The
conference call will be broadcast live and accessible under the
“Investor Relations” tab at www.wolverineworldwide.com. A replay of
the conference call will be available on the Company’s website for
a period of approximately 30 days.
ABOUT WOLVERINE WORLDWIDE
Founded in 1883 on the belief in the possibility of opportunity,
Wolverine World Wide, Inc. (NYSE:WWW) is one of the world’s leading
marketers and licensors of branded casual, active lifestyle, work,
outdoor sport, athletic, children's and uniform footwear and
apparel. Through a diverse portfolio of highly recognized brands,
our products are designed to empower, engage and inspire our
consumers every step of the way. The company’s portfolio includes
Merrell®, Saucony®, Sweaty Betty®, Sperry®, Hush Puppies®,
Wolverine®, Keds®, Chaco®, Bates®, HYTEST®, and Stride Rite®.
Wolverine Worldwide is also the global footwear licensee of the
popular brands Cat® and Harley-Davidson®. Based in Rockford,
Michigan, for more than 130 years, the company's products are
carried by leading retailers in the U.S. and globally in
approximately 170 countries and territories. For additional
information, please visit our website, www.wolverineworldwide.com
or visit us on Facebook, LinkedIn, and Instagram.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements,
including statements regarding the Company’s expectations
regarding: its growth strategies, growth potential and its outlook
for fiscal year 2022 results including revenue, reported gross
margin, reported and adjusted operating margin, effective tax rate
and reported and adjusted diluted earnings per share as well as the
Company's expectations: regarding the impact of factors such as
higher promotional activity, inventory challenges and foreign
currency exchange rate fluctuations on the Company's results in the
second half of 2022; that there will not be any meaningful
deterioration of current market conditions related to the COVID-19
pandemic in 2022 and that Sweaty Betty will fuel growth and enhance
the Company's eCommerce business. In addition, words such as
“estimates,” “anticipates,” “believes,” “forecasts,” “step,”
“plans,” “predicts,” “focused,” “projects,” “outlook,” “is likely,”
“expects,” “intends,” “should,” “will,” “confident,” variations of
such words, and similar expressions are intended to identify
forward-looking statements. These statements are not guarantees of
future performance and involve certain risks, uncertainties, and
assumptions (“Risk Factors”) that are difficult to predict with
regard to timing, extent, likelihood, and degree of occurrence.
Risk Factors include, among others: the effects of the COVID-19
pandemic on the Company’s business, operations, financial results
and liquidity, including the duration and magnitude of such
effects, which will depend on numerous evolving factors that the
Company cannot currently accurately predict or assess, including:
the duration and scope of the pandemic; the negative impact on
global and regional markets, economies and economic activity,
including the duration and magnitude of its impact on unemployment
rates, consumer discretionary spending and levels of consumer
confidence; actions governments, businesses and individuals take in
response to the pandemic; the effects of the pandemic, including
all of the foregoing, on the Company’s distributors, manufacturers,
suppliers, joint venture partners, wholesale customers and other
counterparties, and how quickly economies and demand for the
Company’s products recover after the pandemic subsides; changes in
general economic conditions, employment rates, business conditions,
interest rates, tax policies, inflationary pressures and other
factors affecting consumer spending in the markets and regions in
which the Company’s products are sold; the inability for any reason
to effectively compete in global footwear, apparel and
consumer-direct markets; the inability to maintain positive brand
images and anticipate, understand and respond to changing footwear
and apparel trends and consumer preferences; the inability to
effectively manage inventory levels; increases or changes in
duties, tariffs, quotas or applicable assessments in countries of
import and export; foreign currency exchange rate fluctuations;
currency restrictions; supply chain or other capacity constraints,
production disruptions, quality issues, price increases or other
risks associated with foreign sourcing; the cost and availability
of raw materials, inventories, services and labor for contract
manufacturers; labor disruptions; changes in relationships with,
including the loss of, significant wholesale customers; risks
related to the significant investment in, and performance of, the
Company’s consumer-direct operations; risks related to expansion
into new markets and complementary product categories; the impact
of seasonality and unpredictable weather conditions; changes in
general economic conditions and/or the credit markets on the
Company’s distributors, suppliers and retailers; increases in the
Company’s effective tax rates; failure of licensees or distributors
to meet planned annual sales goals or to make timely payments to
the Company; the risks of doing business in developing countries,
and politically or economically volatile areas; the ability to
secure and protect owned intellectual property or use licensed
intellectual property; the impact of regulation, regulatory and
legal proceedings and legal compliance risks, including compliance
with federal, state and local laws and regulations relating to the
protection of the environment, environmental remediation and other
related costs, and litigation or other legal proceedings relating
to the protection of the environment or environmental effects on
human health; the potential breach of the Company’s databases or
other systems, or those of its vendors, which contain certain
personal information, payment card data or proprietary information,
due to cyberattack or other similar events; problems affecting the
Company’s supply chain or distribution system, including service
interruptions at shipping and receiving ports; strategic actions,
including new initiatives and ventures, acquisitions and
dispositions, and the Company’s success in integrating acquired
businesses, and implementing new initiatives and ventures; the risk
of impairment to goodwill and other intangibles; changes in future
pension funding requirements and pension expenses; and additional
factors discussed in the Company’s reports filed with the
Securities and Exchange Commission and exhibits thereto. The
foregoing Risk Factors, as well as other existing Risk Factors and
new Risk Factors that emerge from time to time, may cause actual
results to differ materially from those contained in any
forward-looking statements. Given these or other risks and
uncertainties, investors should not place undue reliance on
forward-looking statements as a prediction of actual results.
Furthermore, the Company undertakes no obligation to update, amend,
or clarify forward-looking statements.
WOLVERINE WORLD WIDE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited) (In millions, except earnings per
share)
Quarter Ended
Year-To-Date Ended
July 2, 2022
July 3, 2021
July 2, 2022
July 3, 2021
Revenue
$
713.6
$
631.9
$
1,328.4
$
1,142.6
Cost of goods sold
406.5
361.5
760.0
649.9
Gross profit
307.1
270.4
568.4
492.7
Gross margin
43.0
%
42.8
%
42.8
%
43.1
%
Selling, general and administrative
expenses
229.2
201.8
440.5
376.2
Gain on sale of trademarks
(90.0
)
—
(90.0
)
—
Environmental and other related costs, net
of recoveries
—
4.8
30.4
(5.4
)
Operating expenses
139.2
206.6
380.9
370.8
Operating expenses as a % of revenue
19.5
%
32.7
%
28.7
%
32.5
%
Operating profit
167.9
63.8
187.5
121.9
Operating margin
23.5
%
10.1
%
14.1
%
10.7
%
Interest expense, net
10.1
9.7
18.8
19.3
Other expense (income), net
0.6
0.1
(0.5
)
2.9
Total other expenses
10.7
9.8
18.3
22.2
Earnings before income taxes
157.2
54.0
169.2
99.7
Income tax expense
32.7
9.6
36.3
16.9
Effective tax rate
20.8
%
17.7
%
21.5
%
16.9
%
Net earnings
124.5
44.4
132.9
82.8
Less: net loss attributable to
noncontrolling interests
(0.1
)
(0.3
)
(1.4
)
(0.4
)
Net earnings attributable to Wolverine
World Wide, Inc.
$
124.6
$
44.7
$
134.3
$
83.2
Diluted earnings per share
$
1.53
$
0.53
$
1.63
$
0.98
Supplemental information:
Net earnings used to calculate diluted
earnings per share
$
122.1
$
44.0
$
131.7
$
81.8
Shares used to calculate diluted earnings
per share
79.9
83.6
80.9
83.4
WOLVERINE WORLD WIDE, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
(In millions)
July 2, 2022
July 3, 2021
ASSETS
Cash and cash equivalents
$
149.3
$
345.8
Accounts receivables, net
420.0
372.0
Inventories, net
639.5
331.7
Other current assets
84.5
36.9
Total current assets
1,293.3
1,086.4
Property, plant and equipment, net
127.5
120.2
Lease right-of-use assets
166.7
134.6
Goodwill and other indefinite-lived
intangibles
1,219.8
825.9
Other noncurrent assets
141.7
136.5
Total assets
$
2,949.0
$
2,303.6
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable and other accrued
liabilities
$
561.7
$
480.2
Lease liabilities
33.0
32.7
Current maturities of long-term debt
10.0
10.0
Borrowings under revolving credit
agreements
490.0
—
Total current liabilities
1,094.7
522.9
Long-term debt
727.4
708.4
Lease liabilities, noncurrent
150.9
119.3
Other noncurrent liabilities
314.2
303.9
Stockholders' equity
661.8
649.1
Total liabilities and stockholders'
equity
$
2,949.0
$
2,303.6
WOLVERINE WORLD WIDE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited) (In millions)
Year-To-Date Ended
July 2, 2022
July 3, 2021
OPERATING ACTIVITIES:
Net earnings
$
132.9
$
82.8
Adjustments to reconcile net earnings to
net cash provided by (used in) operating activities:
Depreciation and amortization
16.8
14.4
Deferred income taxes
3.0
1.2
Stock-based compensation expense
19.3
21.6
Pension and SERP expense
4.7
7.0
Environmental and other related costs, net
of cash payments and recoveries received
(35.0
)
(9.4
)
Gain on sale of trademarks
(90.0
)
—
Other
(2.6
)
(1.6
)
Changes in operating assets and
liabilities
(297.0
)
(64.3
)
Net cash provided by (used in) operating
activities
(247.9
)
51.7
INVESTING ACTIVITIES:
Additions to property, plant and
equipment
(16.1
)
(6.7
)
Proceeds from sale of trademarks
90.0
—
Other
4.8
(1.4
)
Net cash provided by (used in) investing
activities
78.7
(8.1
)
FINANCING ACTIVITIES:
Payments under revolving credit
agreements
(107.0
)
—
Borrowings under revolving credit
agreements
372.0
—
Payments on long-term debt
(5.0
)
(5.0
)
Cash dividends paid
(16.8
)
(16.9
)
Purchase of common stock for treasury
(81.3
)
(26.9
)
Employee taxes paid under stock-based
compensation plans
(7.2
)
(13.1
)
Proceeds from the exercise of stock
options
1.4
12.0
Contributions from noncontrolling
interests
7.0
4.8
Net cash provided by (used in) financing
activities
163.1
(45.1
)
Effect of foreign exchange rate
changes
(6.3
)
(0.1
)
Decrease in cash and cash equivalents
(12.4
)
(1.6
)
Cash and cash equivalents at beginning of
the year
161.7
347.4
Cash and cash equivalents at end of the
quarter
$
149.3
$
345.8
The following tables contain information regarding the non-GAAP
financial measures used by the Company in the presentation of its
financial results:
WOLVERINE WORLD WIDE, INC.
Q2 2022 RECONCILIATION TABLES RECONCILIATION OF REPORTED
REVENUE TO ADJUSTED REVENUE ON A CONSTANT CURRENCY
BASIS* (Unaudited) (In millions)
GAAP Basis 2022-Q2
Foreign Exchange
Impact
Constant Currency Basis
2022-Q2
GAAP Basis 2021-Q2
Constant Currency
Growth
Reported Growth
REVENUE
Wolverine Michigan Group
$
389.7
$
8.1
$
397.8
$
354.4
12.2
%
10.0
%
Wolverine Boston Group
253.9
5.0
258.9
258.0
0.3
%
(1.6
) %
Other
70.0
6.3
76.3
19.5
291.3
%
259.0
%
Total
$
713.6
$
19.4
$
733.0
$
631.9
16.0
%
12.9
%
RECONCILIATION OF REPORTED
REVENUE TO ADJUSTED ORGANIC REVENUE* (Unaudited)
(In millions)
GAAP Basis
Sweaty Betty (1)
Organic Basis
Revenue - Fiscal 2022 Q2
$
713.6
$
(47.4
)
$
666.2
(1)
Q2 2022 adjustment reflects the Sweaty Betty® results included
in the consolidated condensed statement of operations.
RECONCILIATION OF REPORTED
DIRECT-TO-CONSUMER REVENUE GROWTH TO ADJUSTED ORGANIC
DIRECT-TO-CONSUMER REVENUE* (Unaudited)
GAAP Basis
Sweaty Betty (1)
Organic Basis
Direct-to-Consumer Revenue - Fiscal 2022
Q2
$
166.2
$
(40.3
)
$
125.9
Direct-to-Consumer Revenue - Fiscal 2021
Q2
$
137.2
$
—
$
137.2
(1)
Q2 2022 adjustment reflects the Sweaty Betty® results included
in the consolidated condensed statement of operations.
RECONCILIATION OF REPORTED
GROSS MARGIN TO ADJUSTED GROSS MARGIN AND ADJUSTED ORGANIC
GROSS MARGIN* (Unaudited) (In millions)
GAAP Basis
Adjustments (1)
As Adjusted
Sweaty Betty (2)
Organic Basis
Gross Profit - Fiscal 2022 Q2
$
307.1
$
0.1
$
307.2
$
(25.6
)
$
281.6
Gross margin
43.0
%
43.0
%
42.3
%
Gross Profit - Fiscal 2021 Q2
$
270.4
$
11.0
$
281.4
$
—
$
281.4
Gross margin
42.8
%
44.5
%
44.5
%
(1)
Q2 2022 adjustments reflect $90.0 million gain on the sale of
the Champion trademarks, partially offset by $0.8 million of costs
associated with Sweaty Betty® integration. Q2 2021 adjustments
reflect $11.0 million of air freight charges related to production
and shipping delays caused by the COVID-19 pandemic and $4.8
million of environmental and other related costs net of
recoveries.
(2)
Q2 2022 adjustment reflects the Sweaty Betty® results included
in the consolidated condensed statement of operations.
RECONCILIATION OF REPORTED
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES TO ADJUSTED
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES* (Unaudited)
(In millions)
GAAP Basis
Adjustment (1)
As Adjusted
Selling, general and administrative
expenses - Fiscal 2022 Q2
$
139.2
$
89.3
$
228.5
Selling, general and administrative
expenses - Fiscal 2021 Q2
$
206.6
$
(4.8
)
$
201.8
(1)
Q2 2022 adjustments reflect $90.0 million gain on the sale of
the Champion trademarks, partially offset by $0.7 million of costs
associated with Sweaty Betty® integration. Q2 2021 adjustments
reflect $4.8 million of environmental and other related costs net
of recoveries.
RECONCILIATION OF REPORTED
OPERATING MARGIN TO ADJUSTED OPERATING MARGIN AND ADJUSTED
ORGANIC OPERATING MARGIN* (Unaudited) (In
millions)
GAAP Basis
Adjustments (1)
As Adjusted
Sweaty Betty (2)
Organic Basis
Operating Profit - Fiscal 2022 Q2
$
167.9
$
(89.2
)
$
78.7
$
2.3
$
81.0
Operating margin
23.5
%
11.0
%
12.2
%
Operating Profit - Fiscal 2021 Q2
$
63.8
$
15.8
$
79.6
$
—
$
79.6
Operating margin
10.1
%
12.6
%
12.6
%
(1)
Q2 2022 adjustments reflect $90.0 million gain on the sale of
the Champion trademarks, partially offset by $0.8 million of costs
associated with Sweaty Betty® integration. Q2 2021 adjustments
reflect $11.0 million of air freight charges related to production
and shipping delays caused by the COVID-19 pandemic and $4.8
million of environmental and other related costs net of
recoveries.
(2)
Q2 2022 adjustment reflects the Sweaty Betty® results included
in the consolidated condensed statement of operations.
RECONCILIATION OF REPORTED
INVENTORY TO ADJUSTED ORGANIC INVENTORY*
(Unaudited) (In millions)
GAAP Basis
Sweaty Betty (1)
Organic Basis
Inventories, net - Fiscal 2022 Q2
$
639.5
$
(42.9
)
$
596.6
Inventories, net - Fiscal 2021 Q2
$
331.7
$
—
$
331.7
(1)
Q2 2022 adjustment reflects the Sweaty Betty® inventories
included in the consolidated condensed balance sheet.
RECONCILIATION OF REPORTED
DILUTED EPS TO ADJUSTED DILUTED EPS ON A CONSTANT CURRENCY
BASIS* (Unaudited)
GAAP Basis
Adjustments (1)
As Adjusted
Foreign Exchange
Impact
As Adjusted EPS On a
Constant Currency Basis
EPS - Fiscal 2022 Q2
$
1.53
$
(0.87
)
$
0.66
$
0.06
$
0.72
EPS - Fiscal 2021 Q2
$
0.53
$
0.14
$
0.67
(1)
Q2 2022 adjustments reflect gain from the sale of the Champion
trademarks and costs associated with Sweaty Betty® integration. Q2
2021 adjustments reflect air freight charges related to production
and shipping delays caused by the COVID-19 pandemic and
environmental and other related costs net of recoveries.
RECONCILIATION OF REPORTED
DILUTED EPS TO ADJUSTED DILUTED EPS AND ADJUSTED ORGANIC
DILUTED EPS* (Unaudited)
GAAP Basis
Adjustments (1)
As Adjusted
Sweaty Betty (2)
Adjusted Organic Basis
EPS - Fiscal 2022 Q2
$
1.53
$
(0.87
)
$
0.66
$
0.01
$
0.67
EPS - Fiscal 2021 Q2
$
0.53
$
0.14
$
0.67
$
—
$
0.67
(1)
Q2 2022 adjustments reflect income from the sale of the Champion
trademarks and costs associated with Sweaty Betty® integration. Q2
2021 adjustments reflect air freight charges related to production
and shipping delays caused by the COVID-19 pandemic and
environmental and other related costs net of recoveries.
(2)
Q2 2022 adjustment reflects the Sweaty Betty® results included
in the consolidated condensed statement of operations.
2022 GUIDANCE RECONCILIATION
TABLES RECONCILIATION OF REPORTED OPERATING MARGIN GUIDANCE
TO ADJUSTED OPERATING MARGIN GUIDANCE, REPORTED DILUTED EPS
GUIDANCE TO ADJUSTED DILUTED EPS GUIDANCE AND SUPPLEMENTAL
INFORMATION* (Unaudited) (In millions, except
earnings per share)
GAAP Basis
Adjustments (1)
As Adjusted
Operating Margin - Fiscal 2022 Full
Year
11.5 %
2.0 %
9.5 %
Dilutive EPS - Fiscal 2022 Full Year
$ 2.62 - $2.72
$0.52
$2.10 - $2.20
Fiscal 2022 Full Year Supplemental
information:
Net Earnings
$213 - $221
($42)
$171 - $179
Net Earnings used to calculate diluted
earnings per share
$210 - $218
($42)
$168 - $176
Shares used to calculate diluted earnings
per share
80.0
80.0
(1)
2022 adjustments reflect income from the sale of the Champion
trademarks, estimated environmental and other related costs net of
recoveries and estimated Sweaty Betty® integration costs.
* To supplement the consolidated condensed financial statements
presented in accordance with Generally Accepted Accounting
Principles ("GAAP"), the Company describes what certain financial
measures would have been if, gain on the sale of Champion
trademarks, environmental and other related costs net of
recoveries, Sweaty Betty® integration costs and air freight costs
related to the COVID-19 pandemic were excluded. The Company also
describes what certain financial measures would have been if the
previously described financial measures also excluded the results
of Sweaty Betty®. The Company believes these non-GAAP measures
provide useful information to both management and investors by
increasing comparability to the prior period by adjusting for
certain items that may not be indicative of core operating measures
and to better identify trends in the Company's business. The
adjusted financial results are used by management to, and allow
investors to, evaluate the operating performance of the Company on
a comparable basis.
The constant currency presentation, which is a non-GAAP measure,
excludes the impact of fluctuations in foreign currency exchange
rates. The Company believes providing constant currency information
provides valuable supplemental information regarding results of
operations, consistent with how the Company evaluates performance.
The Company calculates constant currency by converting the
current-period local currency financial results using the prior
period exchange rates and comparing these adjusted amounts to the
Company's current period reported results.
Management does not, nor should investors, consider such
non-GAAP financial measures in isolation from, or as a substitution
for, financial information prepared in accordance with GAAP. A
reconciliation of all non-GAAP measures included in this press
release, to the most directly comparable GAAP measures are found in
the financial tables above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220810005202/en/
Alex Wiseman (616) 863-3974
Wolverine World Wide (NYSE:WWW)
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