Shares of branded consumer products provider Wolverine Worldwide (NYSE:WWW) are plummeting today after it posted disappointing second-quarter numbers. Revenue declined 17.4% year-over-year to $589.1 million but landed better than expectations by $6.1 million. EPS at $0.19 came in line with estimates.
During the quarter, Wolverine witnessed a double-digit decline across its Active Group, Work Group, Lifestyle Group, and other verticals, with Active Group, the largest vertical, clocking 10.5% lower revenue at $383.3 million. Moreover, revenues at its key brands, including Merrell, Sperry, Sweaty Betty, and Wolverine, saw a sharp contraction.
While the company had a cash pile of $370 million at the end of the quarter, net debt stood at $930 million with a leverage ratio of 3.5x. Amid lower demand and a challenging environment in the global wholesale channels, Wolverine has scaled back its revenue and earnings expectations.
For the full-year 2023, revenue is seen landing between $2.26 billion and $2.28 billion (pointing to a 10.7% to 10% drop over the prior year). EPS for the year is expected to hover between $0.45 and $0.55. The company also plans to sell non-core assets to the tune of $50 million to pare down its debt. Separately, Wolverine has also promoted Chris Hufnagel as its President and CEO.
Overall, the Street has a $17 consensus price target on Wolverine alongside a Hold consensus rating. This implies a mouth-watering 44% potential upside in the stock.
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