Wolverine (WWW) Up 5% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Wolverine World Wide (WWW). Shares have added about 5% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Wolverine due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Wolverine Q2 Earnings Beat Estimates, Revenues Dip Y/Y

Wolverine World Wide reported mixed second-quarter 2024 results, wherein top and bottom lines surpassed the Zacks Consensus Estimate. However, both metrics fell year over year.

Wolverine posted better-than-expected revenues and earnings for the second quarter, reflecting significant progress in its ambitious turnaround plan initiated a year ago. The company has focused on becoming more consumer-centric and adopting a global brand-building model. 

This strategy has been executed with speed and urgency, resulting in substantial business improvements, including reduced debt and inventory levels, and an expanded gross margin. Wolverine is witnessing early signs of growth, driven by stronger product pipelines and enhanced demand creation. The company is confident that these ongoing efforts will position it for sustained growth, and deliver better performance and returns for shareholders.

Q2 Insights

The company posted second-quarter adjusted earnings of 15 cents a share, which beat the Zacks Consensus Estimate of 10 cents. However, the figure declined 21.1% from 19 cents in the prior-year quarter. At constant currency, the company’s earnings per share were 16 cents, down 15.8% from 19 cents in the prior-year quarter.

Revenues of $425.2 million surpassed the Zacks Consensus Estimate of $410 million and fell 27.8% year over year. The decline was attributable to lower revenues in most segments and brands. Revenues declined 27.7% in constant currency. Direct-to-consumer revenues of $113.4 million were down 14.4% year over year. WWW’s international business dropped 19.3% to $216 million.

Coming to segments, Active Group’s revenues dipped 20.2% year over year to $305.9 million. Revenues at the Work Group tumbled 10.9% year over year to $105 million. Revenues of the Other segment fell 83.8% year over year to $14.3 million. 

Brand-wise, Merrell’s revenues slipped 19.2% year over year to $142.7 million, Saucony's revenues fell 28% to $102 million and Wolverine's revenues dipped 3.1% to $40.1 million. Sweaty Betty generated revenues of $44 million, flat year over year.