Establishes Profit Improvement Office to Accelerate Margin Expansion and Provide Investment Capacity
Wolverine World Wide, Inc. (NYSE: WWW) announced today a series of actions that will set the foundation for robust and sustainable future growth and provide more insight into the sources of value creation across the brand portfolio.
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(Graphic: Business Wire)
These moves include:
- Reorganizing the brand group structure into the Active, Work, and Lifestyle Groups, to better leverage common product and consumer categories, align with the Company's view of its global portfolio, and provide increased transparency to investors;
- Appointing new leaders of these brand groups, to better position each brand for success; and
- Establishing a Profit Improvement Office to accelerate cost savings and efficiencies that will accelerate operating margin expansion and provide capacity for future investments.
“The new group reporting structure announced today is a natural progression of our business as it combines brands that share similar traits under one segment, which we expect will pave the way for increased collaboration, sharing of best practices, and ultimately value creation for our shareholders,” said Brendan Hoffman, Wolverine Worldwide’s President and Chief Executive Officer.
“Our Company possesses exceptional talent, powerful brands, and a strong operating platform. I believe this new group structure will unlock our potential to not only grow faster but also become a more efficient and simplified organization that delivers industry-leading margins,” continued Hoffman. “With this in mind, we are also announcing today the establishment of a Profit Improvement Office to identify cost savings, increase efficiencies, and enable investments that will fuel our future growth. Our overarching goal is to deliver consistent and enhanced revenue and profit growth that will put the business on an accelerated path to return to and ultimately exceed 12% operating margin. I firmly believe the changes announced today are fundamental steps towards achieving our goals.”
New Brand Group Structure
As of the fourth quarter of Fiscal 2022, Wolverine Worldwide reorganized its portfolio of brands into three reportable segments:
- Active Group, consisting of Merrell® footwear and apparel, Saucony® footwear and apparel, Sweaty Betty® activewear, and Chaco® footwear;
- Work Group, consisting of Wolverine® footwear and apparel, Cat® footwear, Bates® uniform footwear, Harley-Davidson® footwear and HyTest® safety footwear; and
- Lifestyle Group, consisting of Sperry® footwear, Keds® footwear, and Hush Puppies® footwear and apparel.
Kids footwear results from Saucony®, Sperry®, Keds®, Merrell®, Hush Puppies®, and Cat® will be reported within the applicable brand.
“Our new reporting structure will allow us to focus on the brands and product categories that have the biggest opportunities to maximize future value creation. We will prioritize future investments and resource allocation to the areas that we expect to generate the greatest return,” said Mike Stornant, Executive Vice President and Chief Financial Officer. “This new segment presentation also provides investors and other stakeholders improved visibility into the underlying performance and results.”
This segment change was approved by the Wolverine Worldwide Board of Directors last week. Certain unaudited historical financial segment and supplemental brand information has been recast to reflect these segment reporting changes and is included in the Company's earnings release for the third quarter of 2022 and in a Current Report on Form 8-K filed with the SEC this morning.
New Leadership Appointments
In connection with reorganizing the brand group structure, the Company announced the following promotions and leadership appointments for three Company veterans:
Chris Hufnagel has been appointed as President of the Active Group. The Saucony and Chaco brands will now report into Mr. Hufnagel, who will also continue leading the Merrell brand. The Sweaty Betty brand will continue reporting into Mr. Hoffman.
Mr. Hufnagel is a 14-year veteran of the Company and has held several key leadership roles including Global President of Merrell since September 2019, Global President of Cat Footwear, and Corporate Senior Vice President and Head of Strategy. Prior to joining Wolverine Worldwide, Mr. Hufnagel held senior leadership roles at Under Armour, Gap, and Abercrombie & Fitch.
Tom Kennedy has been appointed as President of the Work Group, and the Wolverine, CAT Footwear, Bates, Harley-Davidson Footwear, and Hytest brands will continue reporting into him. Mr. Kennedy is a 7-year veteran of the Company and has held several key leadership roles, including Global President of Sperry and President of Apparel and Accessories. Prior to joining Wolverine Worldwide, Mr. Kennedy held senior leadership positions at Nike, Gap, Fossil, and PacSun.
Katherine Cousins has been appointed as President of the Lifestyle Group. The Hush Puppies brand will now report into Cousins, who joined the Company as President of Sperry in 2021 and has also overseen Keds since the beginning of 2022. Prior to joining Wolverine Worldwide, Ms. Cousins served as VP and General Manager of the Kodiak, Terra, and Work Authority brands at VF Corporation, and led global strategy, consumer research, licensing, and accessories for Timberland.
“Chris, Tom, and Katherine are each uniquely qualified for their new leadership appointments and bring significant breadth and depth of experience in leading global brands that deliver consistent and profitable growth. I am confident that their successful track records and leadership skills will elevate and enhance the portfolio of brands that they will each lead,” said Hoffman. “I am equally confident that the range of changes announced today will unlock efficiencies and value creation across the business, laying a strong foundation for robust and sustainable future growth.”
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®, Sperry®, Sweaty Betty®, 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.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements, including statements regarding the Company’s expectations regarding: future growth, value creation, success and brand enhancement; increased transparency in reporting; the purpose and expected results of the Profit Improvement Office; the expected benefits of the new group reporting structure, including increased collaboration and sharing of best practices, increased efficiency and industry-leading margins; future investments and resource allocation; and the new brand group reporting structure. 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.
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Contacts
Dave Latchana, (616) 863-4226
