Wolverine World Wide, Inc.

Please stand by, your program is about to begin. If you need assistance during your conference today, please press star zero. Good day, everyone, and welcome to today's Wolverine Worldwide, Inc. Second Quarter Fiscal 2024 Earnings Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing star one on your telephone keypad. Please note that this call is being recorded. I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Alex Wiseman, Vice President of Finance.

Good morning and welcome to our second quarter fiscal 2024 conference call. On the call today are Chris Hufnagel, President and Chief Executive Officer, and Taryn Miller, Executive Vice President and Chief Financial Officer. Earlier this morning, we issued our press release and announced our financial results for the second quarter 2024. The press release is available on many new sites and can be viewed on our corporate website at wolverineworldwide.com. This morning's earnings press release and comments made during today's earnings call include non-GAAP financial measures. These non-GAAP financial measures were reconciled to the most comparable GAAP financial measures in attached tables within the body of the release. References made regarding financial results and the outlook for 2024 and comparable results from 2023 in each case for our ongoing business exclude the impact of KEDS, Wolverine Leathers, and Sperry. 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 2024 growth opportunities, and trends expected to affect the company's future performance made during today's conference call are 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 forward-looking statements. These important risk factors are identified in the company's SEC filings and in our press releases. With that, I'll now turn the call over to Chris Huffnagle.

Thanks, Alex. Good morning, everyone, and thank you for joining us on today's call. For the second quarter, we exceeded our revenue and earnings expectations with broad-based contributions from across the portfolio. We saw sequential revenue improvement, again drove meaningful gross margin expansion year on year, and further reduced our inventory and debt. Perhaps more importantly, we continue to strengthen our brand's positioning in the marketplace with improved product pipelines, more effective demand creation initiatives, and better brand management. While the macro environment remains dynamic and challenges no doubt remain on the horizon, we've seen key elements of our turnaround effort continue to build momentum, and we're encouraged that our strategies continue to gain traction. As a result, we're raising the midpoint of our revenue and earnings guidance for the year. Taryn Miller, our new CFO, will provide more details on our second quarter results and update outlook for the year in a few minutes. But first, I want to provide an update on our turnaround journey. Just under 365 days ago, on my first earnings call as CEO, I shared a picture of the situation our company faced at the time. Wolverine Worldwide was in a precarious position, and the state of the business was extraordinarily difficult, requiring decisive action. In the weeks following that call, we outlined an ambitious turnaround plan to first stabilize the business and then transform the organization, ultimately leading to an inflection to growth. all premised on Wolverine Worldwide becoming great global brand builders. While our work is not yet finished, one year in, I'm proud of what our team has accomplished. We've done exactly what we said we planned to do. Our fast and bold actions have stabilized the company, streamlining our cost structure and materially expanding our gross margins, significantly reducing the debt that constrained our ability to invest, and attacking the inventory issues that undermined our brand's position in the market and impeded our pipeline of new product innovation. At the same time we were doing this essential work, we also made great strides in transforming Wolverine Worldwide for the future, building a new culture aligned with our vision of being consumer-obsessed global brand builders, shaping our portfolio to focus on brands with the unique potential to win in attractive performance and lifestyle categories, developing key capabilities to execute our strategy, including The Collective, a center of excellence specialized in consumer and trend insight, along with new in-house creative and PR resources for today's always-on consumer, implementing brand protection measures to help clean up the marketplace, fostering stronger relationships with our wholesale and distribution partners here in the U.S. and around the world, fast-tracking new trend-right innovative products to market well ahead of our traditional development timelines, investing a greater portion of our dollars in demand creation to help drive our brand's awareness and affinity with consumers, and enhancing our team with new talent keenly focused on growth and modern brand building skill sets. Thanks to our team's hard work and grit, combined with a clear vision and bold call to action, we find the company in a much better place today. But be assured, no one is content with where we stand. We've done the work necessary to position the company to turn the page to the next chapter in its 141-year history, driving the business into the inflection phase of our turnaround to begin to generate profitable growth. And doing it on a sustained basis quarter after quarter, year after year. This next chapter in our story begins with our brands. Our brands have tremendous potential, possessing true authenticity and highly desirable categories that represent significant addressable markets today, and we believe are strongly aligned with consumer trends moving forward. More and more people are seeking to better their lives every day, gravitating towards activities that help them live healthier, more productive, more fulfilled lives, physically and mentally. Our brands are well-expected for making great, innovative products that enable consumers to run, hike, exercise, move, and work faster and longer and more comfortably. Award-winning products that are simply better and have disrupted the market over time. Our brands are recognized as originals, trailblazers, innovators, and leaders in their categories and possess unique and compelling DNA. Their product design credibility present amazing advantages to both excel in performance categories and build lasting lifestyle businesses. Today, however, the marketplace requires more than well-positioned brands and great products. Brands need to resonate beyond function, and their products need to deliver style and trend as well as performance and innovation. Brands need to tell differentiated, relevant stories that only they can credibly tell. And those stories need to engage our consumers where and when they want to be engaged. In short, our brands need to build awesome products and tell amazing stories that make every day of our consumers' lives better. Our team is energized by the opportunity we have in front of us to drive for better, better brands, better products, better storytelling, and ultimately better performance, culminating in greater returns for our shareholders. Our brand building model, focused squarely on the intersection of awesome products, amazing storytelling, and driving the business, is beginning to produce better performance. Before I hand it over to Taryn, I'd like to take a few minutes to share some concrete examples from our brands related to each aspect of our model, beginning with building awesome products. From the very start of our turnaround effort, we prioritized bolstering our brand's product pipelines as quickly as possible to inject newness with compelling innovation and trend-right design. Saucony is the furthest along on this journey, with accelerated product life cycles in the run category, driving a 900 basis point increase in revenue contribution year over year in the second quarter from new product introductions. On the heels of introducing the Ride and Guide 17 and Endorphin 4 collections earlier this year, The brand recently launched its award-winning premium runner, the Triumph 22, delivering strong double-digit growth for the collection and run specialty and on Saucony.com. The brand followed the strong debut with a launch last month of its most premium max cushion franchise, the Hurricane 24, featuring wearable styling for performance and lifestyle use, and sell-through is off to a strong start. Finally, as an early preview of the planned 2025 introduction and advance of the Olympics, The brand offered a limited release of its pinnacle franchise, the Endorphin Elite 2, a few weeks ago, selling out in just an hour. The super shoe, built on a credit run, the brand's most advanced foam developed through years of lab testing, will be worn by Olympic marathoner Melinda Elmore in Paris this weekend. On the lifestyle side, Saucony has authentically leveraged its deep product archive, along with influential collaborations to tap into the fast-growing retro-tech trend. With styles like the ProGrid Omni, ProGrid Triumph, and Ride Millennium driving strong sell-throughs and opening future distribution with the best retailers in Tier 0 through Tier 2. While Saucony is building strong momentum here in the U.S., its best expression today may just be in London, the focus of the company's and brand's new key city approach. Saucony.com grew 40% in the U.K. during Q2, contributing to an increase of over 20% in the brand's only commerce channel globally in the quarter. In July, Saucony was the title sponsor for the London 10K, the centerpiece of a host of activations which collectively propelled the brand to record search interest in the UK. Saucony is just beginning to hit stride around the world. Moving on to telling amazing stories. As I shared earlier, I believe brands need to do more than just have great products that perform well to win. They also need to engage consumers with timely stories that only they can tell, leveraging their unique DNA. In the second quarter, based on insights from one of its consumers that women at times feel insecure about wearing shorts, Sweaty Betty inspired its sisterhood to embrace their bodies with its Wear the Damn Shorts campaign. The campaign featured full funnel messaging and activations, nearly doubled the sale of shorts versus last year, and helped the brand deepen its emotional connections with its consumers. During the second quarter, Sweaty Betty saw double-digit growth of its important leggings category, driven by its hero franchise, Power. Earlier this year, the brand expanded its Trend Right Explorer collection, a light and wrinkle-free casual collection for warm weather and travel that allows the brand to further diversify its assortment. resulting in very strong double-digit growth year-to-date. The Sweaty Betty team remains intensely focused on its consumer and is beginning to influence our broader portfolio's thinking in this critical way. And finishing with driving the business, an intense focus on the health of the marketplace and driving sell-through performance every day has been a critical component of our turnaround as well. We've taken action to shut down rogue selling, optimize distribution, and elevate branded shopping experiences. Merrill, for example, has cultivated a much cleaner selling environment this past season and successfully reset several of its key accounts in the U.S. with more modern assortments to position the brand more appropriately. As a result, in the second quarter, Merrill drove growth at retail and hike, despite the category headwinds, and achieved its third straight quarter of acceleration in market share gains. Merrill's push to modernize the trail through key award-winning product franchises like the Moab Speed 2 and Agility Peak 5, faster and lighter styles at elevated price points, continues to drive sell-through and create momentum. The brand fueled energy and reached new consumers with several collaborations in the second quarter as well, including with Grayson, a very cool premium golf brand, which quickly sold out and generated 500 million earned media impressions in the process. Internationally, Merrill, together with its partner Japan, opened several key stores in Tokyo over the last year. The stores are performing well ahead of their plan, while also helping position Merrill as a relevant outdoor lifestyle brand with younger consumers in a highly influential city. As a leader in outdoor footwear, Merrill's stepping into the opportunity it has to reinvigorate the category through innovative and trend-right product and building the brand in key markets around the world. With that, I'm very pleased to hand the call over to Taryn Miller, our new CFO. Today's her 90th day with the company. She'll take you through our second quarter results and update guidance in much more detail. Taryn?