Company continues transformation by further
strengthening balance sheet
Wolverine World Wide, Inc. (NYSE: WWW) announced today that it
has sold the Sperry brand to Authentic Brands Group, Inc., and the
ALDO Group. The transaction closed on January 10, 2024, and will
generate total proceeds of approximately $130 million in the first
quarter to pay down debt, further strengthening the Company’s
balance sheet.
“The sale of the Sperry brand is the next step in our turnaround
and strategic transformation,” said Chris Hufnagel, Wolverine
Worldwide’s President and Chief Executive Officer. “We conducted a
rigorous process that considered a comprehensive set of strategic
alternatives for the brand, and we believe this is the best outcome
for the Company and our vision for the future.”
Today’s announcement builds on the Company’s
previously-announced asset monetization transactions that
collectively generated nearly $250 million in cash in 2023.
“In a very short time, we have meaningfully reshaped Wolverine
Worldwide – simplifying the portfolio, reducing our debt, and
redesigning the organization to drive improved performance and
profitability,” Hufnagel added. “These efforts have enhanced the
Company’s capacity to invest in our brands and platforms, and I am
excited about the next chapter in our turnaround – focused squarely
on building consumer-obsessed global brands and delivering greater
value for our shareholders.”
Centerview Partners, LLC, served as financial advisors to
Wolverine Worldwide, and Honigman LLP and Warner, Norcross + Judd
LLP served as legal advisors.
ABOUT WOLVERINE WORLDWIDE
Founded in 1883, 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®, Hush
Puppies®, Wolverine®, 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 140 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 with
respect to: use of Sperry transaction proceeds to pay down debt,
the ability to focus on its growth brands, the ability to drive
improved performance and profitability, the capacity to invest in
sustainable growth, and the delivery of greater shareholder value.
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 risk that the
Company will be able to successfully implement its growth and
profit improvement strategies; 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; the
effects of the COVID-19 pandemic and other health crises and
containment efforts on the Company’s business, operations,
financial results and liquidity, including the duration and
magnitude of such effects; 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; effects of changes in general economic conditions
and/or the credit markets on the Company’s manufacturers,
distributors, suppliers and retailers; 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; 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, including the sale of the Sperry brand, and the
Company’s success in integrating acquired businesses, and
implementing new initiatives and ventures; risks related to
stockholder activism, 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.
###
SPERRY DIVESTITURE FINANCIAL
SUMMARY (Unaudited) (In millions)
In order to provide visibility regarding the financial impact of
the Sperry® business divestiture, the Company has provided
additional information within the supplemental table below. The
items included in the table represent amounts related to the
Sperry® business that are reflected in the Company’s reported Q1,
Q2 and Q3 2023 results and that will be reflected in the Company’s
reported Q4 2023 and full year fiscal 2023 results.
Q1
Q2
Q3
Q4
2023
Full-Year
Sperry business
Revenue
$
62.9
$
57.4
$
46.2
$
40.7
$
207.2
Operating profit
$
(2.3
)
$
0.2
$
(4.0
)
$
(4.2
)
$
(10.3
)
Operating profit adjusted (1)
$
2.5
$
4.6
$
(0.5
)
$
(1.1
)
$
5.5
Depreciation and amortization (2)
$
1.2
$
1.2
$
1.1
$
1.1
$
4.6
(1) Operating profit adjusted represents operating profit of the
Sperry® business before cost allocations for Company resources
shared by all Company brands, resources which were not sold as part
of the Sperry® divestiture and the costs for which the Company will
continue to bear.
(2) Depreciation and amortization expense
included in the determination of operating profit of the Sperry®
business.
The Company believes operating profit before internal cost
allocations for shared resources provides useful information to
both management and investors because it provides insights into the
Sperry brand contribution to the Company’s consolidated results of
operations, which contributions will not reoccur following the
divestiture of the Sperry brand. Management does not, nor should
investors, consider this financial measure in isolation from, or as
a substitute for financial information prepared in accordance with
GAAP.
The Q4 and 2023 full-year expected results described in this
table are preliminary estimates based on information available to
management as of the date of this press release and are subject to
change upon completion of the Company’s standard year-end closing
procedures. As the Company completes its year-end financial close
process and finalizes its financial statements, it will be required
to make significant judgments, which may result in changes to these
preliminary and unaudited estimates. Any changes to the expected
results described in this table may be material.
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version on businesswire.com: https://www.businesswire.com/news/home/20240111114825/en/
Dave Latchana, (616) 334-7099
Wolverine World Wide (NYSE:WWW)
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