Wolverine Worldwide, a leading US-based firm in footwear and apparel, has reported a decline in total revenue in the first quarter of fiscal 2024 (Q1 FY24), dropping 34.1 per cent year-on-year (YoY) to $394.9 million from $599.4 million. This decline was consistent across all business segments, with the active group seeing a 24.9 per cent decrease, the Work Group down by 21.3 per cent, and the other segment plummeting by an alarming 84.8 per cent.

Despite these setbacks, there was a notable improvement in gross margin, which increased to 45.9 per cent from 39.4 per cent the previous year, marking a gain of 650 basis points. Selling, general, and administrative expenses saw a modest decrease of 3.4 per cent to $184.5 million, the company said in a press release.

However, operating margin showed a significant downturn, from a positive 7.6 per cent in the prior year to a negative 0.8 per cent, an 840-basis point decline. This was reflected in the diluted earnings per share, which shifted from a positive $0.23 in the previous year to a negative $0.19.

Inventory levels also indicated a shift, with a dramatic 51.2 per cent reduction from the previous year, totalling $354.3 million.

Looking ahead, Wolverine Worldwide has set its fiscal 2024 (FY24) revenue expectations to between $1.68 billion and $1.73 billion, projecting a decline of about 13.2 per cent to 15.7 per cent compared to 2023. Despite the forecasted drop in revenue, the company anticipates an increase in gross margin to approximately 44.5 per cent and an operating margin of about 5.7 per cent, with an adjusted operating margin reaching around 7 per cent.

“We delivered better-than-expected revenue and earnings in the first quarter, and we are beginning to see proof points emerge as early validation of our strategy and execution—including record gross margin in the quarter, acceleration in our direct-to-consumer business, improving order trends across our wholesale operations, and a healthier balance sheet,” said Chris Hufnagel, president and chief executive officer of Wolverine Worldwide.

Fibre2Fashion News Desk (DP)

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