Company Accelerates Transformation Efforts and Updates Fiscal 2023 Guidance

Wolverine World Wide, Inc. (NYSE: WWW) today reported financial results for the third quarter ended September 30, 2023.

“In the third quarter, we achieved several critical milestones as we took decisive action to stabilize and transform the Company, while delivering revenue and earnings in-line with our expectations,” said Chris Hufnagel, President and Chief Executive Officer of Wolverine Worldwide. “We continued to reshape our portfolio, reduce our inventory, and redesign the Company to become consumer-obsessed brand builders – focused squarely on building compelling products and telling amazing stories. We announced additional details on these actions in another press release this morning. While market conditions remain challenging, we're taking the necessary steps to reinvigorate our brands and position the Company for profitable growth as conditions improve. We're confident in our brands, platforms, and most importantly, our people. We're executing more boldly and at a greater pace to improve our profitability and enable future investments focused on our biggest growth opportunities – all aimed at delivering greater value for our shareholders.”

FINANCIAL HIGHLIGHTS AND FULL-YEAR OUTLOOK

Financial results and guidance for 2023, and comparable results from 2022, in each case, for our ongoing business exclude the impact of Keds, which was sold in February 2023, the U.S. Wolverine Leathers business, which was sold in August 2023, the non-U.S. Wolverine Leathers business, which is the subject of a sale process, and reflect an adjustment for the transition of our Hush Puppies North America business to a licensing model in the second half of 2023. Tables have been provided in the back of this release showing the impact of these adjustments on financial results for 2023 and 2022. For visibility regarding this impact on our 2023 operating results, the Company will report actual results reflecting its ongoing businesses and separately report results for Keds, which will be limited to the period through February 3, 2023 and Wolverine Leathers to the extent it owns and operates the business.

THIRD-QUARTER 2023 FINANCIAL HIGHLIGHTS

Revenue of $527.7 million declined 23.7% versus the prior year and declined 24.7% on a constant currency basis. Revenue from the ongoing business was $519.5 million and declined 21.1% on a constant currency basis.

The Company's international revenue of $229.0 million was down 24.4% compared to the prior year and international revenue from the ongoing business of $221.8 million was down 22.3% compared to the prior year, or 24.6% on a constant currency basis. Direct-to-Consumer revenue of $136.6 million was down 14.5% compared to the prior year and down 12.8% for the ongoing business compared to the prior year.

Gross margin was 40.8% compared to 40.2% in the prior year and improved due to profit improvement initiatives and channel mix, partially offset by the sale of higher-cost inventory due to transitory supply chain costs from 2022 and higher mix of closeout sales in the quarter.

Selling, General & Administrative expenses were $188.1 million, or 35.6% of revenue. Adjusted SG&A expenses of $191.7 million or 36.9% of adjusted revenue, were 510 basis points higher than the prior year.

Inventory at the end of the quarter was $563.8 million and was down approximately 33% compared to the prior year.

Net Debt at the end of the quarter was $930 million, and liquidity was approximately $400 million. The Company's bank-defined leverage ratio was 3.4x.

FOURTH QUARTER AND FULL YEAR 2023 OUTLOOK

"Fourth quarter brand performance is expected to be mixed across the portfolio,” said Mike Stornant, Executive Vice President and Chief Financial Officer. “The Saucony and Sweaty Betty businesses have stabilized and are showing signs of improvement. However, Merrell continues to operate in a challenged outdoor category, and our Work Group brands continue to experience headwinds in wholesale demand. As a result, we are reducing our fourth quarter revenue outlook to a range of $515 million to $525 million and adjusted diluted earnings per share to a range of ($0.30) to ($0.25) for our ongoing business.”

“We are driving additional profit improvement benefits and now expect the Profit Improvement Office to deliver approximately $215 million of annualized savings in 2024. We are also improving our balance sheet metrics and are on track to achieve our year-end inventory target of $490 million. The strategic alternatives review for the Sperry brand is progressing, and we are pursuing the sale of other non-core assets in Q4.”

Full year 2023 outlook is as follows:

• Revenue from our ongoing business is expected to be approximately $2.19 billion to $2.20 billion, representing a decline of approximately 13% versus the prior year
• Gross margin is expected to be approximately 38.7%, and adjusted gross margin is expected to be approximately 39.1%
• Operating margin is expected to be approximately 4.8%, and adjusted operating margin is expected to be approximately 3.4%
• The effective tax rate is expected to be approximately 25%, and the adjusted tax rate is expected to be approximately 18%.
• Diluted earnings per share are expected to be between $0.35 and $0.40, and adjusted diluted earnings per share are expected to be between $0.05 and $0.10. These full-year EPS expectations include an approximate $0.18 negative impact from foreign currency exchange rate fluctuations.
• Diluted weighted average shares are expected to be approximately 79.4 million.
• Net Debt at year-end is expected to be approximately $850 million resulting in bank-defined leverage of approximately 3x.

NON-GAAP FINANCIAL MEASURES

Measures referred to in this release as “adjusted” financial results and the financial results of the "ongoing business" are non-GAAP measures. Adjusted financial results exclude environmental and other related costs net of recoveries, impairment of long-lived assets, reorganization costs, debt modification costs, gain on the sale of businesses, trademarks and intangible assets, Sperry® store closure costs, costs associated with divestitures and costs associated with Sweaty Betty® integration. The financial results of the ongoing business exclude financial results from the Keds business, Wolverine Leathers business and reflect an adjustment for the transition of our Hush Puppies North America business to a licensing model in the second half of 2023. The Company also presents constant currency information, which is a non-GAAP measure that excludes the impact of fluctuations in foreign currency exchange rates. The Company calculates constant currency basis by converting the current-period local currency financial results using the prior period exchange rates and comparing these adjusted amounts to the Company's current period reported results. The Company believes providing each of these non- GAAP measures provides valuable supplemental information regarding its results of operations, consistent with how the Company evaluates performance.

The Company has provided a reconciliation of each of the above non-GAAP financial measures to the most directly comparable GAAP financial measure. The Company believes these non-GAAP measures provide useful information to both management and investors because they increase the comparability of current period results to prior period results by adjusting for certain items that may not be indicative of core operating results and enable better identification of trends in our business. The adjusted financial results are used by management to, and allow investors to, evaluate the operating performance of the Company on a comparable basis. Management does not, nor should investors, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

EARNINGS CALL INFORMATION

The Company will host a conference call today at 8:30 a.m. EST to discuss these results and current business trends. The conference call will be broadcast live and accessible under the “Investor Relations” tab at www.wolverineworldwide.com. A replay of the conference call will be available on the Company’s website for a period of approximately 30 days.

ABOUT WOLVERINE WORLDWIDE

Founded in 1883 on the belief in the possibility of opportunity, Wolverine World Wide, Inc. (NYSE:WWW) is one of the world’s leading marketers and licensors of branded casual, active lifestyle, work, outdoor sport, athletic, children's and uniform footwear and apparel. Through a diverse portfolio of highly recognized brands, our products are designed to empower, engage and inspire our consumers every step of the way. The Company’s portfolio includes Merrell®, Saucony®, Sweaty Betty®, Sperry®, Hush Puppies®, Wolverine®, Chaco®, Bates®, HYTEST®, and Stride Rite®. Wolverine Worldwide is also the global footwear licensee of the popular brands Cat® and Harley-Davidson®. Based in Rockford, Michigan, for 140 years, the Company's products are carried by leading retailers in the U.S. and globally in approximately 170 countries and territories. For additional information, please visit our website, www.wolverineworldwide.com or visit us on Facebook, LinkedIn, and Instagram.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements, including statements regarding the Company’s outlook for 2023 including: reported and constant currency revenue; revenue from our ongoing business, reported and adjusted gross margin; reported and adjusted operating margin; effective tax rate; reported and adjusted diluted earnings per share; the impact of foreign currency exchange rate fluctuations on diluted earnings per share; and the year-end inventory target; as well as statements regarding the Company's execution of its strategies to improve profitability and enable future investments focused on its biggest growth opportunities, expected significant profit improvement in 2024, the amount and timing of transitory supply chain and excess inventory expenses and profit improvement initiative savings; and the Company’s plans to sell non-core assets and repay debt. In addition, words such as “estimates,” “anticipates,” “believes,” “forecasts,” “step,” “plans,” “predicts,” “focused,” “projects,” “outlook,” “is likely,” “expects,” “intends,” “should,” “will,” “confident,” variations of such words, and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions (“Risk Factors”) that are difficult to predict with regard to timing, extent, likelihood, and degree of occurrence.

Risk Factors include, among others: changes in general economic conditions, employment rates, business conditions, interest rates, tax policies, inflationary pressures and other factors affecting consumer spending in the markets and regions in which the Company’s products are sold; the inability for any reason to effectively compete in global footwear, apparel and consumer-direct markets; the inability to maintain positive brand images and anticipate, understand and respond to changing footwear and apparel trends and consumer preferences; the inability to effectively manage inventory levels; increases or changes in duties, tariffs, quotas or applicable assessments in countries of import and export; foreign currency exchange rate fluctuations; currency restrictions; supply chain or other capacity constraints, production disruptions, quality issues, price increases or other risks associated with foreign sourcing; the cost and availability of raw materials, inventories, services and labor for contract manufacturers; the effects of COVID-19 and other health crises, on the Company’s business, operations, financial results and liquidity, including the duration and magnitude of such effects, and numerous factors that the Company cannot accurately predict, including: the duration and scope of health crisis, the negative impact on global and regional markets, unemployment rates, consumer confidence and discretionary spending, governmental action, and the effects of health crisis on the Company’s supply chain and customers; labor disruptions; changes in relationships with, including the loss of, significant wholesale customers; risks related to the significant investment in, and performance of, the Company’s consumer-direct operations; risks related to expansion into new markets and complementary product categories; the impact of seasonality and unpredictable weather conditions; increases in the Company’s effective tax rates; failure of licensees or distributors to meet planned annual sales goals or to make timely payments to the Company; the risks of doing business in developing countries, and politically or economically volatile areas; the ability to secure and protect owned intellectual property or use licensed intellectual property; the impact of regulation, regulatory and legal proceedings and legal compliance risks, including compliance with federal, state and local laws and regulations relating to the protection of the environment, environmental remediation and other related costs, and litigation or other legal proceedings relating to the protection of the environment or environmental effects on human health; the potential breach of the Company’s databases or other systems, or those of its vendors, which contain certain personal information, payment card data or proprietary information, due to cyberattack or other similar events; strategic actions, including new initiatives and ventures, acquisitions and dispositions, including the disposition of the Keds® business and of Hush Puppies® intellectual property in China,

Hong Kong and Macau, and the Company’s success in integrating acquired businesses, and implementing new initiatives and ventures; the risk of impairment to goodwill and other intangibles; changes in future pension funding requirements and pension expenses; and additional factors discussed in the Company’s reports filed with the Securities and Exchange Commission and exhibits thereto. The foregoing Risk Factors, as well as other existing Risk Factors and new Risk Factors that emerge from time to time, may cause actual results to differ materially from those contained in any forward-looking statements. Given these or other risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Furthermore, the Company undertakes no obligation to update, amend, or clarify forward-looking statements.

The following tables contain information regarding the non-GAAP financial measures used by the Company in the presentation of its financial results:

DIVESTITURE

FINANCIAL SUMMARY

(Unaudited)

(In millions, except per share amounts)

In order to provide visibility regarding the financial impact of completed and planned divestitures, and the impact of the transition of Hush Puppies® from a wholesale model to a license model on July 1, 2023, the Company has provided additional information within the supplemental table below. The items included in the tables represent amounts that are reflected in the reported fiscal 2023 and 2022 results that are related to businesses the Company has sold or announced that the Company does not intend to include the business in the Company's long-term plans. The Company believes providing the following information is helpful to better understand the impact of the divestitures and transition to a license model on the Company's ongoing business.

* To supplement the consolidated condensed financial statements presented in accordance with Generally Accepted Accounting Principles ("GAAP"), the Company describes what certain financial measures would have been if environmental and other related costs net of recoveries, impairment of long-lived assets, reorganization costs, debt modification costs, gain on the sale of businesses, trademarks and intangible assets, Sperry® store closure costs, costs associated with divestitures and costs associated with Sweaty Betty® integration were excluded. The financial results of the ongoing business exclude financial results from the Keds business, Wolverine Leathers business and reflect an adjustment for the transition of our Hush Puppies North America business to a licensing model in the second half of 2023. The Company believes these non-GAAP measures provide useful information to both management and investors by increasing comparability to the prior period by adjusting for certain items that may not be indicative of the Company's core ongoing operating business results and to better identify trends in the Company's ongoing business. The adjusted financial results are used by management to, and allow investors to, evaluate the operating performance of the Company on a comparable basis.

The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. The Company believes providing constant currency information provides valuable supplemental information regarding results of operations, consistent with how the Company evaluates performance. The Company calculates constant currency by converting the current-period local currency financial results using the prior period exchange rates and comparing these adjusted amounts to the Company's current period reported results.

Management does not, nor should investors, consider such non-GAAP financial measures in isolation from, or as a substitution for, financial information prepared in accordance with GAAP. A reconciliation of all non-GAAP measures included in this press release, to the most directly comparable GAAP measures are found in the financial tables above.

The supplemental information included below about transitory supply chain expenses and profit improvement initiative savings are intended to show the quarterly timing of the impact of these items on Gross Profit, Selling, general and administrative expense and Operating profit. The transitory costs are more prominent in the first half of the year and the cost savings are more prominent in the back half the year.

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