ROCKFORD — Executives at footwear and apparel company Wolverine World Wide Inc. say the actions they took earlier in the year in reaction to the COVID-19 pandemic paid off in “much stronger than expected” quarterly financial results.
Even so, revenues for the second quarter that ended June 27 plummeted 38.6 percent to $349.1 million for the Rockford-based Wolverine (NYSE: WWW). The company reported a quarterly net loss of $1.9 million, or 2 cents per diluted share, which included a loss of $1.6 million from operations.
One bright spot: Revenues from directly controlled digital e-commerce operations soared 96 percent year-over-year as many brick-and-mortar stores were forced to close to help stop the spread of COVID-19. The growth in e-commerce comes after a concerted effort to invest in company-owned digital retail assets in recent years.
Wolverine Chairman, CEO and President Blake Krueger said the company’s brands “excelled online” and benefited “from strength in key product categories that are resonating with consumers.” Wolverine’s diverse portfolio of brands spans the branded casual, active lifestyle, work, outdoor sport, athletic, children’s and uniform categories.
During the quarter, the company prioritized liquidity and asset management, which combined with better quarterly revenues and profits than expected and led to Wolverine generating $116 million of operating cash flow.
Wolverine paid down its revolving debt by $665 million and ended the quarter with $422.6 million in cash on its balance sheet.
“The acceleration of our digital direct offense, together with our diversified and agile business model, enabled the Company to adapt to the rapidly changing marketplace and deliver positive earnings and exceptional cash flow in the quarter,” Krueger said in an earnings statement. “We believe the Company is positioned well to accelerate out of the current market downturn once the impact of the pandemic subsides.”
Year-to-date revenues of $788.4 million were down 27.8 percent compared to 2019, while Wolverine’s $10.9 million in reported earnings through midyear, or 14 cents per diluted share, was well off its $80.8 million in earnings, or 88 cents per diluted share, from a year ago.
“These financial results are very encouraging and, importantly, are clear evidence of an operating model that can adjust quickly to unexpected challenges,” CFO and Senior Vice President Mike Stornant said in a statement. “While we expect the second half of the year to remain challenging, we are well prepared for various scenarios that may play out and are confident that the Company will remain strong during this volatile time.”