Wolverine World Wide, Inc.

Greetings and welcome to Wolverine World Wide, Inc. Fourth Quarter Fiscal 2020 Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr. Brett Parent, Vice President of Strategy and Investor Relations. Please go ahead. You may begin, sir.

Good morning and welcome to our fourth quarter and full year 2020 conference call. On the call today are Blake Krieger, our Chairman and Chief Executive Officer, Brendan Hoffman, our President, and Mike Stornett, our Senior Vice President and Chief Financial Officer. Earlier this morning, we announced our financial results for the fourth quarter and full year 2020. The release is available on many news sites and can be viewed on our corporate website at wolverineworldwide.com. If you would prefer to have a copy of the news release sent to you directly, please call Allison Malkin at 203-682-8225. This morning's press release and comments made during today's earnings call include non-GAAP disclosures, which adjust, for example, for the impacts of environmental and other related costs Net-of-cost recoveries, costs related to the COVID-19 pandemic, including severance, credit loss expenses, certain inventory reserves and other related costs, and foreign exchange rate changes. These disclosures were reconciled and attached tables within the body of the release. I'd also like to remind you that statements describing the company's expectations, plans, predictions, and projections such as those regarding the company's outlook for fiscal year 2021 made during today's conference call our forward-looking statements under U.S. securities laws. As a result, we must caution you that there are a number of factors that could cause actual results to differ materially from those described in the forward-looking statements. These important risk factors are identified in the company's SEC filings and in our press releases. With that, Being said, I'd now like to turn the call over to Blake Krieger.

Thanks, Brett. Good morning, everyone, and thanks for joining us. I hope everyone on the call is safe and well. Earlier this morning, we reported fourth quarter revenue of approximately $510 million, adjusted earnings per share of 21 cents, and operating cash flow of $174 million, all exceeding our highest expectations entering the quarter. In Q4, we finished a year of an incredible effort that focused on change and agility, during which time we remained open for business, drove solid financial results and near-record cash flow, and also helped take care of our communities. We've set the stage for accelerated future growth. Specifically, we invested in new leadership, product design and innovation, digital product development tools, consumer insights, and digital marketing capabilities, all aimed at bringing to market a continuous flow of powerful product marketing stories. This all sets the stage for our brands, led by Saucony, Merrill, Sperry and Wolverine, to launch innovations related to their biggest product franchises in 2021, supported by compelling digital marketing content. We reoriented our brands around a DTC-first mindset and go-to-market operating model, while prioritizing our digital platforms globally. Our e-commerce revenue grew 32% in Q4, up 50% for the full year 2020, and so far in Q1 2021 has accelerated to over 60% growth. We added an elevated leadership talent in this area, and shifted even more of our marketing investments towards digital. We also continue to invest behind key global strategic growth initiatives with a focus on ramping up our joint venture in China to realize the sizable opportunity that exists for Saucony and Merrill in this market. A heartfelt thanks to our team who successfully dealt with a constant barrage of unprecedented challenges in 2020. enabling the company to jumpstart 2021. Our brands are well positioned in trending categories and distribution channels, and we have a clear line of sight to increase demand from our DTC business and retail partners. We will share more about our strategic priorities, growth drivers, and 2021 expectations later in the call. First, however, I'll provide some additional insight on our Q4 performance. Then Mike Stornett will detail our 2020 results and share our financial outlook for 2021. And Brendan will speak to our major growth initiatives. In the fourth quarter, the Wolverine Michigan Group's revenue was down 17.1% on a reported basis and down 17.3% on a constant currency basis. The Wolverine Boston Group's revenue was down 15.6% on a reported basis and down 16.1% on a constant currency basis. Let me focus on key brand performance starting with Saucony. Despite several planned product launch shifts out of Q4, Saucony revenue grew mid single digits in the quarter with growth across all major product categories. We expect the brand to accelerate to growth of about 50% in Q1 and deliver very strong increases in continued momentum throughout 2021. In Q4, Saucony.com grew over 65% and the brand expanded operating margin in this channel by more than 800 basis points. Asia Pacific also grew as the brand's new China JV began to gain some traction with 32 stores open by year end. Spectacular product is the key ingredient contributing to Saucony's success, led by the innovative Endorphin collection, which helped drive double-digit Q4 growth in the road running category. The Originals lifestyle business, which represents the brand's heritage retro running collection featured in top tier fashion accounts, also delivered growth in the quarter. Looking to 2021. Salken plans to launch new products across many of its biggest franchises, including the Canvara, Guide, Peregrine, and Ride franchises, along with expansions of the Endorphin series. And that's just in the first half of the year. The brand will continue to advance award-winning integration of its SpeedRoll design geometry and power-run midsole cushioning technology. Saucony will further leverage the Italian product design and marketing hub for its originals business, building on its pinnacle positioning and success in Italy, with elevated trend-right product that will expand into key strategic markets like China, the U.S., and Greater Europe. We anticipate a fast start to a big year for Saucony. Moving to Merrill. Revenue exceeded our expectations down low double digits in Q4, largely due to right-sizing the inventory position for some of our international partners, which we discussed last quarter. The brand delivered high single-digit growth in North America, with Merrill.com up over 60%, thanks to over 70% growth in new consumers. Merrill stores were down only mid-single digits in Q4 and nicely ahead of expectations, despite significant traffic declines related to the pandemic. Merrill remains focused on cultivating a strong mix of iconic product with compelling new franchises across both the performance and lifestyle categories. In Q4, the industry-leading Moab collection, along with the new Antora and Nova II, were among the top-selling styles. Cold weather boots contributed meaningfully to Merrill's Q4 performance as well, delivering growth of over 40%. Turning to 2021. This year marks Merrill's 40th anniversary, and the brand will maximize the moment with its Future 40 campaign and a slate of powerful global product marketing stories. We expect Merrill to have a strong year and build on its momentum with several significant introductions behind its biggest franchises, beginning with the Moab Collection, the number one hiking franchise in the market. The brand plans to launch the Moab Speed and Moab Flight, lighter, faster, and more athletic styles in Q1. In the back half, Merrill will launch new introductions of the Moab Speed Thermo and the award-winning Thermo Rogue 3, two innovative winter hikers that feel like sneakers. Merrill also plans to capitalize on the easy-on-off trend with compelling new colorways, patterns, and materials in the Jungle Mod. capped off with the launch of the new Jungle Moc Explorer in Q3. The fast-growing Hydro Moc and Hut Moc styles are expected to further bolster the brand strength in the slip-on category. Turning now to Sperry. Revenue was down just over 20% in Q4, a significant sequential improvement versus the prior two quarters. Boots helped deliver better than expected revenue in the U.S. wholesale channel, with diversified silhouettes and new colors for women and an expansion into men. Sperry's full-price business mix has been very strong, especially in boots, contributing to nearly 500 basis points of gross margin expansion for the brand in Q4. The Sperry brand possesses unique elasticity across genders, product categories, and price points, with the ability to sell products ranging from its premium Gold Cup collection to the authentic original boat shoe and saltwater boots, all the way to offerings at more accessible price points for a younger consumer, like the all-new Float collection. Launching in late March, Float is a fun and affordable injected version of the boat shoe and is expected to be one of Sperry's biggest launches in several years. Product capsules leveraging fashion, entertainment, and pop culture icons are planned throughout the year, including collaborations with John Legend with Becca Minkoff, the Netflix hit series Outer Banks, and Good Humor Ice Cream. Before Brendan and I share some additional insights on our strategic growth priorities in 2021, I'm going to hand it off to Mike to review the fourth quarter and full year financial results in more detail. Mike?