Wolverine Hikes FY Outlook, But Price Increases Likely Coming
Last week, the Merrell, Saucony and Sperry parent exceeded Q1 earnings expectations and raised its FY21 revenue range by $50 million to $2.24-$2.3 billion. But senior Wolverine executives also disclosed the company’s ongoing need to airfreight products to meet market demand and how an eight-year run of price stability and deflation for the footwear industry is likely over.
“Certainly rubber, cotton, leather, some other components, we see price increases happening in those areas,” Wolverine Worldwide chairman and CEO Blake Krueger commented. “We do expect some product cost increases in logistics, supply chain starting to flow through in the back half of the year.”
Krueger estimated product input costs will be up “low-single digits” for the Spring/Summer 2022 season and “a little bit more than that” for Fall/Winter 2022. He also told analysts the company will seek other savings to offset any higher costs and that “the consumer is poised to expect some product price increases” and didn’t push back much when unit prices jumped in recent years due to tariff issues.
As for the current state of WWW’s business, Q1 ecommerce revenues soared 84 percent as Saucony brand sales rose nearly 60 percent and Merrell sales increased nearly 25 percent, Merrell’s North American sales grew double digits as merrell.com revenues rose 135 percent year-over-year.
Among Wolverine’s work brands, Cat Footwear rose more than 30 percent and Wolverine brand sales were nearly 30 percent higher. Sperry, whose Q1 revenues declined 10 percent, is forecast to return to topline growth for the remainder of the FY.