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☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Delaware

38-1185150

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

9341 Courtland Drive N.E.

,

Rockford

,

Michigan

49351

(Address of principal executive offices)

(Zip Code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class			Trading symbol			Name of each exchange on which registered
Common Stock, $1 Par Value			WWW			New York Stock Exchange

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐    No ☒

There were 80,734,007 shares of common stock, $1 par value, outstanding as of April 25, 2022.

PART I			Financial Information			4
Item 1.			Financial Statements			4
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			21
Item 3.			Quantitative and Qualitative Disclosures About Market Risk			27
Item 4.			Controls and Procedures			27
PART II			Other Information			28
Item 1.			Legal Proceedings			28
Item 1A.			Risk Factors			28
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			28
Item 6.			Exhibits			29
Signatures						30

•the potential effects of the COVID-19 pandemic on the Company’s business, operations, financial results and liquidity;

•changes in general economic conditions, employment rates, business conditions, interest rates, tax policies 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 and capacity constraints, production disruptions, including reduction in operating hours, labor shortages, and facility closures resulting in production delays at the Company’s manufacturers due to disruption from the effects of the COVID-19 pandemic, quality issues, price increases or other risks associated with foreign sourcing;

•the cost, including the effect of inflationary pressures 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 as well as consumer-direct operations;

•the impact of seasonality and unpredictable weather conditions;

•the impact of changes in general economic conditions and/or the credit markets on the Company’s manufacturers, distributors, suppliers, joint venture partners and wholesale customers;

•changes 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;

•risks of 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 and 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, including Sweaty Betty®, and implementing new initiatives and ventures;

•the risk of impairment to goodwill and other intangibles;

•the success of the Company’s restructuring and realignment initiatives undertaken from time to time; and

•changes in future pension funding requirements and pension expenses.

PART I.     FINANCIAL INFORMATION

ITEM 1.    Financial Statements

			Quarter Ended
(In millions, except per share data)			April 2, 2022						April 3, 2021
Revenue			$	614.8					$	510.7
Cost of goods sold			353.5						288.4
Gross profit			261.3						222.3
Selling, general and administrative expenses			211.3						174.4
Environmental and other related costs, net of recoveries			30.4						(10.2)
Operating profit			19.6						58.1
Other expenses:
Interest expense, net			8.7						9.6
Other expense (income), net			(1.1)						2.8
Total other expenses			7.6						12.4
Earnings before income taxes			12.0						45.7
Income tax expense			3.6						7.3
Net earnings			$	8.4					$	38.4
Less: net loss attributable to noncontrolling interests			(1.3)						(0.1)
Net earnings attributable to Wolverine World Wide, Inc.			$	9.7					$	38.5
Net earnings per share (see Note 3):
Basic			$	0.12					$	0.46
Diluted			$	0.12					$	0.45
Comprehensive income			$	5.3					$	44.6
Less: comprehensive loss attributable to noncontrolling interests			(1.1)						(0.4)
Comprehensive income attributable to Wolverine World Wide, Inc.			$	6.4					$	45.0
Cash dividends declared per share			$	0.10					$	0.10

(In millions, except share data)			April 2, 2022						January 1, 2022						April 3, 2021
ASSETS
Current assets:
Cash and cash equivalents			$	149.6					$	161.7					$	364.8
Accounts receivable, less allowances of $25.4, $28.3 and $25.0			370.6						319.6						323.6
Finished products, net			470.6						354.1						311.2
Raw materials and work-in-process, net			12.7						11.4						9.7
Total inventories			483.3						365.5						320.9
Prepaid expenses and other current assets			74.4						56.9						37.9
Total current assets			1,077.9						903.7						1,047.2
Property, plant and equipment, net of accumulated depreciation of $222.0, $219.1 and $202.6			128.4						129.0						120.8
Lease right-of-use assets, net			137.7						138.2						136.7
Goodwill			552.4						556.6						442.7
Indefinite-lived intangibles			707.4						718.1						382.3
Amortizable intangibles, net			72.6						74.6						71.2
Deferred income taxes			1.6						1.8						2.2
Other assets			68.0						64.4						64.2
Total assets			$	2,746.0					$	2,586.4					$	2,267.3
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable			$	293.8					$	222.1					$	279.3
Accrued salaries and wages			18.9						41.7						17.8
Other accrued liabilities			254.5						222.5						157.0
Lease liabilities			35.2						38.3						33.7
Current maturities of long-term debt			10.0						10.0						10.0
Borrowings under revolving credit agreements			355.0						225.0						—
Total current liabilities			967.4						759.6						497.8
Long-term debt, less current maturities			729.6						731.8						710.4
Accrued pension liabilities			106.2						107.4						146.5
Deferred income taxes			110.8						118.9						37.0
Lease liabilities, noncurrent			119.3						118.2						122.8
Other liabilities			97.4						106.1						127.7
Stockholders’ equity:
Common stock – par value $1, authorized 320,000,000 shares; 112,092,848, 111,632,094, and 111,243,844 shares issued			112.1						111.6						111.2
Additional paid-in capital			302.3						298.9						265.7
Retained earnings			1,129.6						1,128.2						1,123.1
Accumulated other comprehensive loss			(102.2)						(98.9)						(124.1)
Cost of shares in treasury; 31,035,541, 29,604,013, and 28,359,799 shares			(845.1)						(810.2)						(766.8)
Total Wolverine World Wide, Inc. stockholders’ equity			596.7						629.6						609.1
Noncontrolling interest			18.6						14.8						16.0
Total stockholders’ equity			615.3						644.4						625.1
Total liabilities and stockholders’ equity			$	2,746.0					$	2,586.4					$	2,267.3

			Quarter Ended
(In millions)			April 2, 2022						April 3, 2021
OPERATING ACTIVITIES
Net earnings			$	8.4					$	38.4
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization			8.5						7.2
Deferred income taxes			(6.8)						1.0
Stock-based compensation expense			10.3						10.0
Pension and SERP expense			2.3						3.5
Environmental and other related costs, net of cash payments and recoveries received			14.1						(0.2)
Other			2.2						0.6
Changes in operating assets and liabilities:
Accounts receivable			(52.2)						(56.2)
Inventories			(122.8)						(79.0)
Other operating assets			(8.1)						8.9
Accounts payable			74.4						95.8
Income taxes payable			8.2						(0.2)
Other operating liabilities			(31.0)						(3.5)
Net cash provided by (used in) operating activities			(92.5)						26.3
INVESTING ACTIVITIES
Additions to property, plant and equipment			(7.5)						(2.2)
Other			3.7						(0.5)
Net cash used in investing activities			(3.8)						(2.7)
FINANCING ACTIVITIES
Payments under revolving credit agreements			(37.0)						—
Borrowings under revolving credit agreements			167.0						—
Payments on long-term debt			(2.5)						(2.5)
Cash dividends paid			(8.4)						(8.5)
Purchases of common stock for treasury			(33.8)						—
Employee taxes paid under stock-based compensation plans			(7.1)						(9.2)
Proceeds from the exercise of stock options			0.8						10.5
Contributions from noncontrolling interests			7.0						4.8
Net cash provided by (used in) financing activities			86.0						(4.9)
Effect of foreign exchange rate changes			(1.8)						(1.3)
Increase (decrease) in cash and cash equivalents			(12.1)						17.4
Cash and cash equivalents at beginning of the year			161.7						347.4
Cash and cash equivalents at end of the quarter			$	149.6					$	364.8

(Unaudited)

			Wolverine World Wide, Inc. Stockholders' Equity
(In millions, except share and per share data)			Common Stock						Additional Paid-In Capital						Retained Earnings						Accumulated Other Comprehensive Loss						Treasury Stock						Non-controlling Interest						Total
Balance at January 2, 2021			$	110.4					$	252.6					$	1,093.3					$	(130.6)					$	(764.3)					$	11.6					$	573.0
Net earnings (loss)															38.5																		(0.1)						38.4
Other comprehensive income (loss)																					6.5												(0.3)						6.2
Shares issued, net of shares forfeited under stock incentive plans (336,783 shares)			0.3						(7.0)																														(6.7)
Shares issued for stock options exercised, net (480,292 shares)			0.5						10.1																														10.6
Stock-based compensation expense									10.0																														10.0
Cash dividends declared ($0.10 per share)															(8.7)																								(8.7)
Purchases of shares under stock-based compensation plans (75,690 shares)																											(2.5)												(2.5)
Capital contribution from noncontrolling interest																																	4.8						4.8
Balance at April 3, 2021			$	111.2					$	265.7					$	1,123.1					$	(124.1)					$	(766.8)					$	16.0					$	625.1
Balance at January 1, 2022			$	111.6					$	298.9					$	1,128.2					$	(98.9)					$	(810.2)					$	14.8					$	644.4
Net earnings (loss)															9.7																		(1.3)						8.4
Other comprehensive income (loss)																					(3.3)												0.2						(3.1)
Shares issued, net of shares forfeited under stock incentive plans (420,226 shares)			0.4						(7.6)																														(7.2)
Shares issued for stock options exercised, net (40,528 shares)			0.1						0.7																														0.8
Stock-based compensation expense									10.3																														10.3
Cash dividends declared ($0.10 per share)															(8.3)																								(8.3)
Purchase of common stock for treasury (1,432,813 shares)																											(34.9)												(34.9)
Capital contribution from noncontrolling interest																																	7.0						7.0
Other																																	(2.1)						(2.1)
Balance at April 2, 2022			$	112.1					$	302.3					$	1,129.6					$	(102.2)					$	(845.1)					$	18.6					$	615.3

1.BASIS OF PRESENTATION

Nature of Operations

Wolverine World Wide, Inc. (the “Company”) is a leading designer, marketer and licensor of a broad range of quality casual footwear and apparel; performance outdoor and athletic footwear and apparel; kids’ footwear; industrial work shoes, boots and apparel; and uniform shoes and boots. The Company’s portfolio of owned and licensed brands includes: Bates®, Cat®, Chaco®, Harley-Davidson®, Hush Puppies®, Hytest®, Keds®, Merrell®, Saucony®, Sperry®, Stride Rite®, Sweaty Betty® and Wolverine®. The Company’s products are marketed worldwide through owned operations, through licensing and distribution arrangements with third parties, and joint ventures. The Company also operates retail stores and eCommerce sites to market both its own brands and branded footwear and apparel from other manufacturers, as well as a leathers division that markets Wolverine Performance Leathers™.

On August 2, 2021, the Company completed the acquisition of Lady Leisure InvestCo Limited (the “Acquired Company”) for $417.4 million, which is net of acquired cash of $7.4 million. The Acquired Company owns the Sweaty Betty® brand and activewear business, a premium women’s activewear brand. See Note 16 for further discussion.

2.NEW ACCOUNTING STANDARDS

Standard

Description

Effect on the Financial Statements or Other Significant Matters

ASU 2020-04, Reference Rate Reform (Topic 848); Facilitation of the Effects of Reference Rate Reform on Financial Reporting (as amended by ASU 2021-01)

Provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. This guidance is applicable for the Company’s borrowing instruments under the amended senior credit facility, which use LIBOR as a reference rate, and is available for adoption effective immediately but is only available through December 31, 2022.

The Company is evaluating the impact of the new standard on its consolidated financial statements.

3.EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share.

			Quarter Ended
(In millions, except per share data)			April 2, 2022						April 3, 2021
Numerator:
Net earnings attributable to Wolverine World Wide, Inc.			$	9.7					$	38.5
Adjustment for earnings allocated to non-vested restricted common stock			(0.2)						(0.7)
Net earnings used in calculating basic and diluted earnings per share			$	9.5					$	37.8
Denominator:
Weighted average shares outstanding			81.5						82.5
Adjustment for non-vested restricted common stock			—						(0.4)
Shares used in calculating basic earnings per share			81.5						82.1
Effect of dilutive stock options			0.4						1.1
Shares used in calculating diluted earnings per share			81.9						83.2
Net earnings per share:
Basic			$	0.12					$	0.46
Diluted			$	0.12					$	0.45

4.GOODWILL AND INDEFINITE-LIVED INTANGIBLES

			Quarter Ended
(In millions)			April 2, 2022						April 3, 2021
Goodwill balance at beginning of the year			$	556.6					$	442.4
Foreign currency translation effects			(4.2)						0.3
Goodwill balance at end of the quarter			$	552.4					$	442.7

The Company’s indefinite-lived intangible assets, which comprise trade names and trademarks, totaled $707.4 million, $718.1 million, and $382.3 million as of April 2, 2022, January 1, 2022, and April 3, 2021, respectively. The carrying value of the Company’s Sperry® trade name was $296.0 million as of April 2, 2022. Based on the interim impairment assessment as of April 2, 2022, it was determined that there were no triggering events indicating impairment of the Company’s goodwill and indefinite-lived intangible assets. The risk of future non-cash impairment for the Sperry® trade name is dependent on key assumptions used in the determination of the trade name's fair value, such as revenue growth, earnings before interest, taxes,

depreciation and amortization ("EBITDA") margin, discount rate, and assumed tax rate, or if macroeconomic conditions deteriorate due to the COVID-19 pandemic and adversely affect the value of the Company's Sperry® trade name.

5.REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue Recognition and Performance Obligations

			Quarter Ended April 2, 2022																		Quarter Ended April 3, 2021
(In millions)			Wholesale						Consumer-Direct						Total						Wholesale						Consumer-Direct						Total
Wolverine Michigan Group			$	275.6					$	53.7					$	329.3					$	234.4					$	63.3					$	297.7
Wolverine Boston Group			169.0						43.3						212.3						150.8						50.1						200.9
Other			28.8						44.4						73.2						11.2						0.9						12.1
Total			$	473.4					$	141.4					$	614.8					$	396.4					$	114.3					$	510.7

The Company has agreements to license symbolic intellectual property with minimum guarantees or fixed consideration. The Company is due $17.3 million of remaining fixed transaction price under its license agreements as of April 2, 2022, which it expects to recognize per the terms of its contracts over the course of time through December 2026. The Company has elected to omit the remaining variable consideration under its license agreements given the Company recognizes revenue equal to what it has the right to invoice and that amount corresponds directly with the value to the customer of the Company’s performance to date.

Reserves for Variable Consideration

(In millions)			April 2, 2022						January 1, 2022						April 3, 2021
Product returns reserve			$	13.2					$	16.6					$	9.9
Customer markdowns reserve			2.9						2.3						2.2
Other sales incentives reserve			3.4						3.4						4.9
Customer rebates liability			16.7						17.0						13.9
Customer advances liability			7.9						6.8						4.0

6.DEBT

(In millions)			April 2, 2022						January 1, 2022						April 3, 2021
Term Facility, due October 21, 2026			$	197.5					$	200.0					$	—
Term Loan A, due December 6, 2023			—						—						177.5
Senior Notes, 5.000% interest, due September 1, 2026			—						—						250.0
Senior Notes, 6.375% interest, due May 15, 2025			—						—						300.0
Senior Notes, 4.000% interest, due August 15, 2029			550.0						550.0						—
Borrowings under revolving credit agreements			355.0						225.0						—
Unamortized deferred financing costs			(7.9)						(8.2)						(7.1)
Total debt			$	1,094.6					$	966.8					$	720.4

On October 21, 2021, the Company entered into a 2021 Replacement Facility Amendment and Reaffirmation Agreement (the “Amendment”) to its credit facility (as amended and restated, the "Credit Agreement"). The Amendment amended and restated the prior credit agreement to, among other things: (i) provide for a term loan A facility (the “Term Facility”) in an aggregate principal amount of $200.0 million, which replaced the existing term loan A; (ii) provide for an increased revolving credit facility (the “Revolving Facility” and, together with the Term Facility, the “Senior Credit Facilities”) with total commitments of $1.0 billion, an increase of $200.0 million from the existing Revolving Facility; and (iii) set the LIBOR floor to 0.000%, a decrease of 0.750% from the existing Senior Credit Facilities. The maturity date of the loans under the Senior Credit Facilities was extended to October 21, 2026. The Amendment 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.

7. LEASES

The following is a summary of the Company’s lease cost.

			Quarter Ended
(In millions)			April 2, 2022						April 3, 2021
Operating lease cost			$	9.0					$	8.1
Variable lease cost			3.6						3.2
Short-term lease cost			1.0						0.3
Sublease income			(2.1)						(1.8)
Total lease cost			$	11.5					$	9.8

The following is a summary of the Company’s supplemental cash flow information related to leases.

			Quarter Ended
(In millions)			April 2, 2022						April 3, 2021
Cash paid for operating lease liabilities			$	11.2					$	9.1
Operating lease assets obtained in exchange for lease liabilities			8.4						0.2

8.DERIVATIVE FINANCIAL INSTRUMENTS

The Company utilizes foreign currency forward exchange contracts designated as cash flow hedges to manage the volatility associated primarily with U.S. dollar inventory purchases made by non-U.S. wholesale operations in the normal course of business. These foreign currency forward exchange hedge contracts extended out to a maximum of 538 days, 538 days, and 538 days as of April 2, 2022, January 1, 2022 and April 3, 2021, respectively. If, in the future, the foreign exchange contracts are determined not to be highly effective or are terminated before their contractual termination dates, the Company would remove the hedge designation from those contracts and reclassify into earnings the unrealized gains or losses that would otherwise be included in accumulated other comprehensive income (loss) within stockholders’ equity.

The Company has an interest rate swap arrangement, which unless otherwise terminated, will mature on May 30, 2025. This agreement, which exchanges floating rate interest payments for fixed rate interest payments over the life of the agreement without the exchange of the underlying notional amounts, has been designated as a cash flow hedge of the underlying debt. The notional amount of the interest rate swap arrangement is used to measure interest to be paid or received and does not represent the amount of exposure to credit loss. The differential paid or received on the interest rate swap arrangement is recognized as interest expense, net. In accordance with FASB ASC Topic 815, Derivatives and Hedging, the Company has formally documented the relationship between the interest rate swap and the variable rate borrowing, as well as its risk management objective and strategy for undertaking the hedge transactions. This process included linking the derivative to the specific liability or asset on the balance sheet. The Company also assessed at the inception of the hedge, and continues to assess on an ongoing basis, whether the derivative used in the hedging transaction is highly effective in offsetting changes in the cash flows of the hedged item.

(Dollars in millions)			April 2, 2022						January 1, 2022						April 3, 2021
Foreign exchange hedge contracts			$	331.7					$	296.7					$	231.3
Interest rate swap			311.3						311.3						—
Cross currency swap			—						—						79.8

(In millions)			April 2, 2022						January 1, 2022						April 3, 2021
Financial assets:
Foreign exchange hedge contracts			$	9.1					$	5.9					$	1.4
Interest rate swap			5.0						—						—
Financial liabilities:
Foreign exchange hedge contracts			$	(1.0)					$	(1.0)					$	(4.6)
Interest rate swap			—						(0.1)						—
Cross currency swap			—						—						(7.9)

9.STOCK-BASED COMPENSATION

			Quarter Ended April 2, 2022												Quarter Ended April 3, 2021
(In millions)			Company Shares Issued						Weighted-Average Grant Date Fair Value						Company Shares Issued						Weighted-Average Grant Date Fair Value
Restricted Awards			811,712						$	27.02					552,439						$	34.22
Performance Awards			382,291						$	30.06					620,771						$	35.74

10.RETIREMENT PLANS

			Quarter Ended
(In millions)			April 2, 2022						April 3, 2021
Service cost pertaining to benefits earned during the period			$	1.3					$	1.8
Interest cost on projected benefit obligations			3.3						3.2
Expected return on pension assets			(5.1)						(4.9)
Net amortization loss			2.8						3.4
Net pension expense			$	2.3					$	3.5

The non-service cost components of net pension expense is recorded in the Other expense (income), net line item on the consolidated condensed statements of operations and comprehensive income.

11.INCOME TAXES

The Company maintains management and operational activities in overseas subsidiaries, and its foreign earnings are taxed at rates that are different than the U.S. federal statutory income tax rate. A significant amount of the Company’s earnings are generated by its Canadian, European and Asian subsidiaries and, to a lesser extent, in jurisdictions that are not subject to income tax.

12.ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Accumulated other comprehensive income (loss) represents net earnings and any revenue, expenses, gains and losses that, under U.S. GAAP, are excluded from net earnings and recognized directly as a component of stockholders’ equity.

The change in accumulated other comprehensive income (loss) during the quarters ended April 2, 2022 and April 3, 2021 is as follows:

(In millions)			Foreign currency translation						Derivatives						Pension						Total
Balance at January 2, 2021			$	(36.8)					$	(20.3)					$	(73.5)					$	(130.6)
Other comprehensive income (loss) before reclassifications (1)			(1.6)						5.0						—						3.4
Amounts reclassified from accumulated other comprehensive income (loss)			—						0.6			(2)			3.4			(3)			4.0
Income tax expense (benefit)			—						(0.2)						(0.7)						(0.9)
Net reclassifications			—						0.4						2.7						3.1
Net current-period other comprehensive income (loss) (1)			(1.6)						5.4						2.7						6.5
Balance at April 3, 2021			$	(38.4)					$	(14.9)					$	(70.8)					$	(124.1)
Balance at January 1, 2022			$	(56.8)					$	(8.9)					$	(33.2)					$	(98.9)
Other comprehensive income (loss) before reclassifications (1)			(13.7)						8.5						—						(5.2)
Amounts reclassified from accumulated other comprehensive income (loss)			—						(0.4)			(2)			2.8			(3)			2.4
Income tax expense (benefit)			—						0.1						(0.6)						(0.5)
Net reclassifications			—						(0.3)						2.2						1.9
Net current-period other comprehensive income (loss) (1)			(13.7)						8.2						2.2						(3.3)
Balance at April 2, 2022			$	(70.5)					$	(0.7)					$	(31.0)					$	(102.2)

(1)Other comprehensive income (loss) is reported net of taxes and noncontrolling interest.

(2)Amounts related to foreign currency derivatives are included in cost of goods sold. Amounts related to foreign currency derivatives that are no longer deemed to be highly effective are included in other income. Amounts related to the interest rate swap and the cross-currency swap are included in interest expense.

(3)Amounts reclassified are included in the computation of net pension expense.

13.FAIR VALUE MEASUREMENTS

The Company measures certain financial assets and liabilities at fair value on a recurring basis. For additional information regarding the Company’s fair value policies, refer to Note 1 in the Company’s 2021 Form 10-K.

Recurring Fair Value Measurements

			Fair Value Measurements
			Quoted Prices With Other Observable Inputs (Level 2)
(In millions)			April 2, 2022						January 1, 2022						April 3, 2021
Financial assets:
Derivatives			$	14.1					$	5.9					$	1.4
Financial liabilities:
Derivatives			$	(1.0)					$	(1.1)					$	(12.5)

(In millions)			April 2, 2022						January 1, 2022						April 3, 2021
Carrying value			$	1,094.6					$	966.8					$	720.4
Fair value			1,033.0						960.6						759.0

14.LITIGATION AND CONTINGENCIES

Litigation

liabilities. At this time, assessing potential liability with respect to the Litigation Matters that are still pending is difficult. Other than the individual lawsuits subject to the settlements described above, the Litigation Matters are in various stages of discovery and related motions. In addition, there is minimal direct and relevant precedent for these types of claims related to PFAS, and the science regarding the human health effects of PFAS exposure in the environment remains inconclusive and inconsistent, thereby creating additional uncertainties.

			Quarter Ended
(In millions)			April 2, 2022						April 3, 2021
Remediation liability at beginning of the year			$	85.7					$	101.8
Amounts paid			(10.5)						(1.0)
Remediation liability at the end of the quarter			$	75.2					$	100.8

(In millions)			2022						2023						2024						2025						2026						Thereafter
Minimum royalties			$	1.2					$	—					$	—					$	—					$	—					$	—
Minimum advertising			$	1.2					$	3.9					$	3.9					$	4.2					$	4.3					$	—

15.BUSINESS SEGMENTS

The Company’s brands are organized into the following two operating segments, which the Company has determined to be reportable segments.

•Wolverine Michigan Group, consisting of Merrell® footwear and apparel, Cat® footwear, Wolverine® footwear and apparel, Chaco® footwear, Hush Puppies® footwear and apparel, Bates® uniform footwear, Harley-Davidson® footwear and Hytest® safety footwear; and

•Wolverine Boston Group, consisting of Sperry® footwear, Saucony® footwear and apparel, Keds® footwear, and the Kids’ footwear business, which includes the Stride Rite® licensed business, as well as Kids' footwear offerings from Saucony®, Sperry®, Keds®, Merrell®, Hush Puppies® and Cat®.

The Company also reports “Other” and “Corporate” categories. The Other category consists of the Sweaty Betty® activewear business, the Company’s leather marketing operations, sourcing operations that include third-party commission revenues and multi-branded consumer-direct retail stores. The Corporate category consists of unallocated corporate expenses, such as corporate employee costs, costs related to the COVID-19 pandemic and environmental and other related costs.

The reportable segments are engaged in designing, manufacturing, sourcing, marketing, licensing and distributing branded footwear, apparel and accessories. Revenue for the reportable segments includes revenue from the sale of branded footwear, apparel and accessories to third-party customers; revenue from third-party licensees and distributors; and revenue from the Company’s consumer-direct businesses. The Company’s reportable segments are determined based on how the Company internally reports and evaluates financial information used to make operating decisions.

Company management uses various financial measures to evaluate the performance of the reportable segments. The following is a summary of certain key financial measures for each reportable segment.

			Quarter Ended
(In millions)			April 2, 2022						April 3, 2021
Revenue:
Wolverine Michigan Group			$	329.3					$	297.7
Wolverine Boston Group			212.3						200.9
Other			73.2						12.1
Total			$	614.8					$	510.7
Segment operating profit (loss):
Wolverine Michigan Group			$	65.1					$	59.2
Wolverine Boston Group			29.2						34.1
Other			0.1						0.3
Corporate			(74.8)						(35.5)
Operating profit			19.6						58.1
Interest expense, net			8.7						9.6
Other expense (income), net			(1.1)						2.8
Earnings before income taxes			$	12.0					$	45.7

(In millions)			April 2, 2022						January 1, 2022						April 3, 2021
Total assets:
Wolverine Michigan Group			$	762.2					$	651.9					$	684.8
Wolverine Boston Group			1,172.3						1,123.6						1,126.8
Other			595.6						606.2						37.0
Corporate			215.9						204.7						418.7
Total			$	2,746.0					$	2,586.4					$	2,267.3
Goodwill:
Wolverine Michigan Group			$	144.4					$	145.1					$	145.7
Wolverine Boston Group			296.4						296.2						297.0
Other			111.6						115.3						—
Total			$	552.4					$	556.6					$	442.7

16.BUSINESS ACQUISITIONS

On July 31, 2021, the Company entered into a definitive agreement to acquire 100% of the outstanding shares of Lady of Leisure InvestCo Limited. The acquisition was completed on August 2, 2021 for $417.4 million, which is net of acquired cash of $7.4 million. The Acquired Company owns the Sweaty Betty® brand and activewear business. The acquisition was funded with cash on hand and borrowings under the Company’s Revolving Facility.

Sweaty Betty® is a premium women’s activewear brand that distributes a wide array of innovative on-trend tops, bottoms, swimwear, outerwear, and accessories around the world, mainly through direct-to-consumer channels. The Sweaty Betty® acquisition is part of the Company’s strategic shift over the last several years from a traditional footwear wholesaler to a consumer-obsessed, digital-focused growth company. The acquisition also aligns with the Company’s strategic growth plan to focus on expanding the Company’s digital and international footprint, and building the brand portfolio beyond footwear.

Sweaty Betty® contributed net revenue of $53.6 million and net loss of $0.1 million to the Company for the quarter ended April 2, 2022. The Sweaty Betty® operating results are included in the Other category for segment reporting purposes.

The Company accounted for the acquisition following FASB ASC Topic 805, Business Combinations, and the related assets acquired and liabilities assumed were recorded at fair value on the acquisition date. The aggregate purchase price was allocated to the major categories of assets acquired and liabilities assumed based upon their respective fair values at the acquisition date using primarily Level 2 and Level 3 inputs. The Level 2 and Level 3 valuation inputs include an estimate of future cash flows and discount rates. The Sweaty Betty® trademark, which is estimated to have an indefinite life, has been valued at $346.4 million using the multi-period excess earnings method. The multi-period excess earnings method requires the use of significant estimates and assumptions, including but not limited to, future revenues, growth rates, EBITDA margin, tax rates and a discount rate.

The purchase price allocation is preliminary and based upon valuation information available to determine the fair value of certain assets and liabilities, including goodwill, and is subject to change, primarily for income tax matters and final adjustments to net working capital as additional information is obtained about the facts and circumstances that existed at the valuation date. The Company expects to finalize the fair values of the assets acquired and liabilities assumed over the one-year measurement period.

(In millions)			Fair Value
Accounts receivable			$	3.6
Inventories			48.4
Prepaid expenses and other current assets			5.3
Property, plant and equipment			10.0
Lease right-of-use assets			7.0
Goodwill			118.9
Intangibles			355.0
Other assets			0.6
Total assets acquired			548.8
Accounts payable			13.1
Accrued salaries and wages			6.0
Other accrued liabilities			14.3
Lease liabilities			7.0
Deferred income taxes			91.0
Total liabilities assumed			131.4
Net assets acquired			$	417.4

Goodwill is the result of expected synergies and the Company’s ability to grow the Sweaty Betty® brand, as well the acquired assembled workforce. All of the goodwill is presented within the Other category for segment reporting purposes and within the Sweaty Betty® reporting unit and will not be deductible for income tax purposes.

(In millions)			Intangible Asset						Useful life
Trade name and trademark			$	346.4					Indefinite
Customer relationship			7.2						18 years
Backlog			1.0						5 months
Customer list			0.4						3 years
Total intangible assets acquired			$	355.0

The following unaudited pro forma summary presents consolidated information of the Company as if the acquisition of Sweaty Betty® occurred at the beginning of fiscal 2020. The pro forma information is not necessarily indicative of the results that would have actually been obtained if the acquisition had occurred at the beginning of the periods presented or that may be attained in the future. These pro forma amounts have been calculated after including the historical Sweaty Betty® operating results in the Company’s consolidated results, and reflecting the following adjustments: fair value adjustments for intangible assets and adjustments reflecting historical interest expense. The adjustments have been applied with related tax effects.

Quarter Ended

(In millions)

April 3, 2021

Net revenue

$

569.8

Net earnings attributable to Wolverine World Wide, Inc.

41.1

ITEM 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Company’s brands are marketed in approximately 170 countries and territories at April 2, 2022, 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 April 2, 2022, the Company operated 142 retail stores in the U.S., Europe and Canada and 64 consumer-direct eCommerce sites.

On July 31, 2021, the Company entered into a definitive agreement to acquire 100% of the outstanding shares of Lady Leisure InvestCo Limited (the “Acquired Company”). The acquisition was completed on August 2, 2021 for $417.4 million, which is net of acquired cash of $7.4 million. The Acquired Company owns the Sweaty Betty® brand and activewear business, a premium women’s activewear brand. The acquisition was funded with cash on hand and borrowings under the Company’s revolving credit facility.

2022 FINANCIAL OVERVIEW

•Revenue was $614.8 million for the first quarter of 2022, representing an increase of 20.4% compared to the first quarter of 2021.

•Gross margin was 42.5% in the first quarter of 2022 compared to 43.5% in the first quarter of 2021.

•The effective tax rates in the first quarters of 2022 and 2021 were 30.4% and 16.0%, respectively.

•Diluted earnings per share for the first quarter of 2022 was $0.12 per share compared to diluted earnings per share of $0.45 per share for the first quarter of 2021.

•The Company declared cash dividends of $0.10 per share in both of the first quarters of 2022 and 2021.

•Cash flow used by operating activities was $92.5 million for the first quarter of 2022 compared to cash flow provided by operating activities of $26.3 million for the first quarter of 2021.

•Compared to the first quarter of 2021, inventory increased $162.4 million, or 50.6%. Sweaty Betty contributed 14.5% to the increase versus the prior year.

			Quarter Ended
(In millions, except per share data)			April 2, 2022						April 3, 2021						Percent Change
Revenue			$	614.8					$	510.7					20.4		%
Cost of goods sold			353.5						288.4						22.6
Gross profit			261.3						222.3						17.5
Selling, general and administrative expenses			211.3						174.4						21.2
Environmental and other related costs, net of recoveries			30.4						(10.2)						398.0
Operating profit			19.6						58.1						(66.3)
Interest expense, net			8.7						9.6						(9.4)
Other expense (income), net			(1.1)						2.8						(139.3)
Earnings before income taxes			12.0						45.7						(73.7)
Income tax expense			3.6						7.3						(50.7)
Net earnings			8.4						38.4						(78.1)
Less: net loss attributable to noncontrolling interests			(1.3)						(0.1)						—
Net earnings attributable to Wolverine World Wide, Inc.			$	9.7					$	38.5					(74.8)		%
Diluted earnings per share			$	0.12					$	0.45					(73.3)		%

REVENUE

Revenue was $614.8 million for the first quarter of 2022, representing an increase of 20.4% compared to the first quarter of 2021. The change in revenue reflected a 10.6% increase from the Michigan Group, a 5.7% increase from the Boston Group and a 10.5% contribution from Sweaty Betty® revenue of $53.6 million. The Michigan Group’s revenue increase was driven by high-thirties increase from Cat®, low-teens increase from Wolverine®, and mid-forties increase from Chaco®. The Boston Group’s revenue increase was driven by high-teens increase from Sperry® and mid-single digit increase from Saucony®, partially offset by high-teens decline from Keds®. Changes in foreign exchange rates decreased revenue by $3.9 million during the first quarter of 2022. Direct-to-consumer revenue increased during the first quarter of 2022 by 23.7% compared to the first quarter of 2021, including a 38.0% contribution from the Sweaty Betty® acquisition.

Gross margin was 42.5% in the first quarter of 2022 compared to 43.5% in the first quarter of 2021. The gross margin decrease in the first quarter was driven by an unfavorable mix shift to the international third-party channel (100 basis points), unfavorable volume and outbound freight costs in the Company’s direct to consumer channel (70 basis points), and higher cost of products from inbound freight, labor and materials costs, in part offset by price increases (60 basis points), partially offset by the contribution from the Sweaty Betty® acquisition (100 basis points).

Operating expenses increased $77.5 million, from $164.2 million in the first quarter of 2021 to $241.7 million in the first quarter of 2022. The increase was primarily driven by higher environmental and other related costs, net of insurance recoveries ($40.6 million), an increase due to the contribution from Sweaty Betty® operating expenses ($29.9 million), higher selling costs ($3.9 million), higher general and administrative costs ($3.0 million), higher distribution costs ($2.2 million), higher product development costs ($0.7 million), partially offset by lower advertising costs ($2.1 million) and lower incentive compensation costs ($0.7 million). Environmental and other related costs were $40.4 million and $5.5 million in the first quarters of 2022 and 2021, respectively.

•Wolverine Michigan Group, consisting of Merrell® footwear and apparel, Cat® footwear, Wolverine® footwear and apparel, Chaco® footwear, Hush Puppies® footwear and apparel, Bates® uniform footwear, Harley-Davidson® footwear and Hytest® safety footwear; and

•Wolverine Boston Group, consisting of Sperry® footwear, Saucony® footwear and apparel, Keds® footwear, and the Kids’ footwear business, which includes the Stride Rite® licensed business, as well as Kids' footwear offerings from Saucony®, Sperry®, Keds®, Merrell®, Hush Puppies® and Cat®.

The Company also reports “Other” and “Corporate” categories. The Other category consists of the Sweaty Betty® activewear business, the Company’s leather marketing operations, sourcing operations that include third-party commission revenues and multi-branded consumer-direct retail stores. The Corporate category consists of unallocated corporate expenses, such as corporate employee costs, costs related the COVID-19 pandemic and environmental and other related costs.

The reportable segment results are as follows:

			Quarter Ended
(In millions)			April 2, 2022						April 3, 2021						Change						Percent Change
REVENUE
Wolverine Michigan Group			$	329.3					$	297.7					$	31.6					10.6		%
Wolverine Boston Group			212.3						200.9						11.4						5.7		%
Other			73.2						12.1						61.1						505.0		%
Total			$	614.8					$	510.7					$	104.1					20.4		%
OPERATING PROFIT (LOSS)
Wolverine Michigan Group			$	65.1					$	59.2					$	5.9					10.0		%
Wolverine Boston Group			29.2						34.1						(4.9)						(14.4)		%
Other			0.1						0.3						(0.2)						(66.7)		%
Corporate			(74.8)						(35.5)						(39.3)						(110.7)		%
Total			$	19.6					$	58.1					$	(38.5)					(66.3)		%

The Michigan Group’s revenue increased $31.6 million, or 10.6%, in the first quarter of 2022, compared to the first quarter of 2021. The revenue increase was driven by high-thirties increase from Cat®, low-teens increase from Wolverine®, and mid-forties increase from Chaco®. The Cat® increase was due to the strength of the work product category and timing of shipments between quarters. The Wolverine® increase was due to strong performance of its core franchises which includes Raider and Rancher, strength of the work product category, and expanded work footwear products. The Chaco® increase is the result of improved inventory positions in the current period versus the prior period which was negatively impacted by supply chain constraints.

The Michigan Group’s operating profit increased $5.9 million in the first quarter of 2022, compared to the first quarter of 2021. The operating profit increase was due to revenue increases, partially offset by a 140 basis point decrease in gross margin and a $3.4 million increase in selling, general and administrative costs. The decrease in gross margin in the current year period was due to an unfavorable mix shift to the international third-party channel, higher costs of products from inbound freight, labor and materials costs partially offset by price increases and unfavorable volume and outbound freight costs in the Company’s direct to

consumer channel. The increase in selling, general and administrative expenses in the current year period was primarily due to higher labor and distribution costs.

The Boston Group’s revenue increased $11.4 million, or 5.7%, during the first quarter of 2022, compared to the first quarter of 2021. The revenue increase was driven by high-teens increase from Sperry® and mid-single digit increase from Saucony®, partially offset by high-teens decline from Keds®. The Sperry® increase was driven by strong U.S. and international wholesale channel performance. The Saucony® increase was driven by the strength and expanded sales of core technical product franchises which include the Ride, Guide, Kinvara, Triumph, Peregrine and Endorphin series. The Keds® decline is due to logistics delays limiting the amount of inventory available for sale during the period.

The Other category’s revenue increased $61.1 million, or 505.0%, in the first quarter of 2022 compared to the first quarter of 2021. The revenue increase was driven by low-eighties increase in the performance leathers business and a $53.6 million contribution from the Sweaty Betty® acquisition.

(In millions)			April 2, 2022						January 1, 2022						April 3, 2021
Cash and cash equivalents			$	149.6					$	161.7					$	364.8
Debt			1,094.6						966.8						720.4
Available revolving credit facility (1)			639.0						769.2						793.9