Wolverine Reports Supply Chain Problems Slowing Footwear Sales

With continuing supply chain challenges affecting both the brand and its wholesale customers, footwear manufacturer Wolverine Worldwide reported Wednesday (Nov. 9) that both revenue and profit came in below expectations for the quarter ended Oct. 1.

“We are facing congestion in our own U.S. distribution centers and inland transportation networks, and many wholesale customers are currently dealing with heavier inventories and warehouse constraints,” Wolverine Worldwide President and CEO Brendan Hoffman said in a Wednesday press release. “These headwinds have resulted in certain shipping delays that impacted most of our brands.”

Wednesday morning, about 15 minutes after Wolverine’s earnings call ended, the company’s stock was down about 21% from the previous day’s price.

For the quarter, Wolverine Worldwide reported year-over-year revenue growth of 8.6% driven by its Merrell brand, which was up 33.6%. The revenue of the company’s other four brands was down between 0.6% and 12.4%.

Together with the supply chain problems, Wolverine Worldwide cited greater promotional spending at retail and deteriorating macro conditions as reasons for falling short of its guidance.

At the brand level, lifestyle brand Sperry — which saw the biggest drop among the company’s brands — was impacted by lower-than-expected demand for boat shoes and boots, Hoffman said.

The one brand making gains — the active- and outdoors-focused Merrell — introduced a new light trail running shoe during the quarter that helped it gain share in that category, the company said in a presentation released in conjunction with the call.

Moving ahead, the company will reduce its forward purchases with suppliers — especially in products that it has in its warehouse — and will “forcefully” move through seasonal products, Hoffman said Wednesday during the earnings call.

“While we have not navigated the supply chain as seamlessly as we would have liked, we have plans in place that should allow us to improve the flow of goods, increase the rate of on-time deliveries and reduce inventory levels,” Hoffman said during the call.

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