Wolverine Worldwide, riding strong revenue gains, posted a profit for 2021 and sharply reduced its fourth-quarter loss, leading to a bullish outlook for 2022.
The footwear giant reported a net loss of $14.6 million for the quarter ended Jan. 1, 2022, compared to a $170.7 million loss in the year-ago period, while for all of 2021, there was a net profit of $68.6 million versus a loss of $136.9 million in 2020.
On a diluted earnings per share basis, the quarterly loss was $0.18, compared to a loss of $2.10 in the prior year. The bottom line was impacted by $44 million in costs from settlements of litigation on an environmental matter, and the acquisition of Sweaty Betty, the women’s activewear brand acquired for $410 million in August 2021, bringing Wolverine Worldwide into a new category for the company.
Fourth-quarter revenue rose 24.7 percent to $635.6 million from $509.6 million. Excluding Sweaty Betty, revenue increased 9.4 percent versus the prior year and decreased 8.2 percent versus 2019.
Revenue for all of 2021 was up 34.8 percent to $2.42 billion from $1.79 billion. Excluding Sweaty Betty, revenue increased 28.3 percent versus the prior year and 1 percent versus 2019.
Among Wolverine Worldwide’s extensive portfolio, the biggest revenue gainers were the Merrell, Saucony, Sperry and Sweaty Betty brands. The portfolio also includes Hush Puppies, Wolverine, Keds, Chaco, Bates, HYTEST and Stride Rite. Wolverine Worldwide is also the global footwear licensee of the Cat and Harley-Davidson brands.
Adjusted diluted earnings per share were $0.41 last quarter compared to $0.21 in the year-ago quarter. Excluding Sweaty Betty, adjusted diluted earnings per share were $0.31 compared to $0.21 in the prior year.
E-commerce revenue in the fourth quarter was up 58.3 percent versus the prior year and up 108.5 percent versus 2019. Excluding Sweaty Betty, e-commerce was up 12.7 percent versus the prior year and up 48.5 versus 2019.
Diluted earnings per share are expected to be between $2.30 to $2.45 and adjusted diluted earnings per share are expected to be between $2.50 to $2.65, representing growth of 19.4 percent to 26.5 percent.
Gross margin is expected to be in the range of 43.5 percent to 44 percent
For 2021, diluted earnings per share were $0.81, compared to a loss of $1.70 in the prior year. Adjusted diluted earnings per share were $2.09. Excluding Sweaty Betty, adjusted diluted earnings per share were $1.98 compared to $0.93 in the prior year.
Gross margin in the quarter was 41.3 percent, compared to 40.1 percent in the prior year. Adjusted gross margin was 43 percent, compared to 41.4 percent in the prior year. Excluding Sweaty Betty, adjusted gross margin was 41.5 percent compared to 41.4 percent in the prior year.
Total debt at the end of the quarter was $966.8 million, or $244.3 million more than in the prior year, reflecting the impact of the Sweaty Betty acquisition. Total liquidity including cash and available borrowings under the company’s revolving line of credit was approximately $900 million.
E-commerce reported revenue was up 39.7 percent last year versus the prior year and up 109.4 percent versus 2019. Excluding Sweaty Betty, e-commerce revenue was up 18.3 percent versus the prior year and up 77.3 percent versus 2019.
“We are very encouraged by our fourth quarter and full-year performance and momentum, despite the ongoing impact of the pandemic on our business. Revenue and earnings exceeded expectations entering the year,” said Mike Stornant, senior vice president and chief financial officer. “As we transition to 2022, demand remains at historic levels and the progress made in 2021 to improve flow of goods and our inventory position gives us confidence in our outlook for high-teens revenue growth in 2022.”
