The US footwear and clothing group Wolverine World Wide Inc. suffered significant losses in sales and profits in the third quarter of the 2023 financial year. The parent company of brands such as Merrell, Saucony, Sperry and Sweaty Betty then lowered its annual forecasts again on Thursday and announced that it would further tighten the current austerity program.
In the period from July to September, consolidated sales amounted to 527.7 million US dollars (493.0 million euros). This corresponded to a decline of 23.7 percent (-24.7 percent adjusted for currency effects) compared to the same quarter of the previous year. Revenues from continuing operations fell by 20.0 percent (-21.1 percent adjusted for currency effects).
The quarterly profit collapses by almost 78 percent
Despite extensive cost reductions, earnings also declined. The operating profit shrank by 53.6 percent to 27.3 million US dollars, the quarterly surplus attributable to shareholders even fell by 77.9 percent to 8.6 million US dollars (8.0 million euros).
In view of the acute weakness of the outdoor brand Merrell, which suffered a drop in sales of around 24 percent in the last quarter, the company revised its annual forecasts downwards again.
Sales from continuing operations are now expected to be between $2.19 and $2.20 billion, which would represent a decline of approximately 13 percent compared to 2022. The target range for diluted earnings per share was reduced to $0.35 to $0.40 from $0.43 to $0.53.
Management announces additional cost-cutting measures
The company also announced that it would continue to push ahead with its reform efforts. The plan is now to significantly streamline the corporate structures and, for example, to merge the organizational units for the USA and Canada into a common North America department in order to achieve increases in efficiency.
In addition, the separation of other strategically irrelevant business areas is already planned for the fourth quarter, the company announced. “Strategic alternatives” for the Sperry brand are currently being examined. Overall, the group expects the measures announced so far to generate annual savings of around $215 million.