Wolverine Worldwide predicts better-than-expected Q2 on strong e-commerce gains

By

Robin Driver

Published
Jun 5, 2020

Active and outdoor apparel and footwear group Wolverine World Wide, Inc. (Wolverine World Wide) announced skyrocketing e-commerce sales in the first nine weeks of Q2 on Thursday, giving the company hope of achieving better-than-expected results in a quarter characterized by the negative impact of Covid-19.
 

In the first nine weeks of the second quarter, the Rockford, Michigan-based company saw a 90% increase in owned e-commerce sales compared to the same period in the previous year. The digital channel accounted for 40% of the group’s total revenue during these nine weeks.

Growth in e-commerce was led by Wolverine Worldwide’s performance brands Merrell and Saucony, as well as work brands Wolverine and Cat Footwear, all of which posted triple-digit rises.

Q2 is still anticipated to be the most challenging quarter of the fiscal year for Wolverine Worldwide, but the company’s total global revenues have declined less than 50% so far in the quarter, thanks to the increases in e-commerce offsetting decreases related to the temporary closure of the group’s brick-and-mortar stores.
 
Wolverine Worldwide has now begun reopening its owned stores and has seen a promising response from consumers. The company expects to have opened 70 of its 90 brick-and-mortar locations by mid-June.
 
“As the global economy continues to reopen, we are encouraged by some of the early trends,” said Wolverine Worldwide chairman, president and CEO Blake Krueger in a release. “Our investment in digital capabilities over the last several years is paying off, delivering significant, highly profitable online growth. We are also seeing some promising at-once order demand where stores are open.”
 
Currently, Wolverine Worldwide expects to finish the second quarter with approximately $1 billion of liquidity, of which $400 million is cash on hand and around $600 million is borrowing capacity available on its revolver.
 
The group still predicts that operating cash flow for fiscal 2020 will be between $150 million and $200 million.
 
Wolverine Worldwide plans to announce its full second-quarter financial results in early August.