Wolverine World Wide, Inc.

Welcome to the Wolverine Worldwide Fourth Quarter Fiscal 2024 Earnings 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, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Alex Weissman, Vice President of Finance. You may begin.

Good morning. and welcome to our fourth quarter fiscal 2024 conference call. On the call today are Chris Huffnagle, President and Chief Executive Officer, and Taryn Miller, Chief Financial Officer. This morning, we issued a press release announcing our financial results for the fourth quarter and full year 2024 in guidance for fiscal year 2025. Press release is available on many news sites and can be viewed on our corporate website at wolverineworldwide.com. This morning's press release and comments made during today's earnings call include non-GAAP financial measures. These non-GAAP financial measures, including references to the ongoing business, were reconciled to the most comparable GAAP financial measures in attached tables within the body of the release or on our investor relations page on our website, wolverineworldwide.com. 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 2025, 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, and thanks to everyone joining us on this morning's call. In the final quarter of 2024, our company inflected a top-line growth, with Merrill, Saucony, when adjusted for business model changes, Wolverine, and three of our four global regions all posting revenue increases compared to the prior year. Of course, margin expanded by more than 600 basis points compared to last year, achieving a new fourth-quarter record. The end result was earnings that exceeded our expectations. It was a good quarter by almost any measure, a fitting conclusion to what was a pivotal year for Wolverine Worldwide. Last year on this call, we shared an update on our ambitious plan to turn around the company and provided our corresponding financial expectations for fiscal 2024. Today, I'm pleased to report that our team delivered. We successfully completed the stabilization of the company and strengthened our balance sheet. finishing with our lowest debt level since the second quarter of 2021 and the cleanest inventory position we've had since the pandemic. We also meaningfully improved the business's profitability, achieving record full-year gross margin and delivering earnings per share nearly six times greater than last year. And finally, as we guided last February, the company inflected the growth to finish the year. In addition to solidifying our foundation and delivering improved financial results for our shareholders, we made good progress in transforming Wolverine worldwide for the future. We reshaped and simplified our portfolio brands to better align with long-term macro consumer trends, and we developed stronger capabilities to underpin our new brand building model, focused on building awesome products, telling amazing stories, and driving the business. We started with the consumer and established the collective to bolster consumer and trend insights. We complemented our already strong product design and development capabilities by adding new talent with a merchandising mindset, and by implementing advanced tools for greater effectiveness and efficiency. We opened our first-ever innovation hub in downtown Boston to tap into the concentration of exceptional talent in the region. We recruited new marketing leadership across our brands, and we equipped them with an in-house creative studio for fast, nimble asset creation to engage today's always-on consumers. We've been hard at work implementing new integrated planning processes to improve our forecasting and help ensure we've got the right product at the right place and at the right time. To drive the business and become better brand builders, we cleaned up the marketplace through a variety of brand protection measures, coupled with more disciplined distribution management, developed more strategic relationships with our partners domestically, internationally, and established a compelling platform to activate our brands with impact through our key city initiative, beginning in Tokyo and London. Finally, over the last year, we've significantly strengthened our team by adding great new talent to the organization. In the last few months alone, we've onboarded Susie Kuhn as president of our active group and two industry veterans to lead our product and marketing functions for Merrill. To date, we've made good progress, but I'm the first to admit we have more work to do. There's no doubt Wolverine Worldwide is much stronger today than it was just 12 months ago, but the most important chapter is certainly the next one. While it's still early in our inflection chapter, and I'm sure the path won't be perfectly straight, our company is growing again, and our biggest brands are positioned to meaningfully grow this year. Before I hand the call over to Taryn Miller, our Chief Financial Officer, to provide more detail on our results in fiscal 2025 Outlook, I'd like to share some additional insight on our brand's fourth quarter performance and how we plan to build the momentum we've generated. Beginning with Saucony. Saucony exceeded our expectations and grew 7% in the fourth quarter, adjusted for business model changes. In the quarter, the brand grew low teens in the U.S. and over 20% in EMA, and it did so at much healthier price points and margins, expanding gross margin globally by more than 1,400 basis points. Saucony's running business gained market share for the second consecutive quarter in the highly competitive and important U.S.-run specialty channel. Serious runners have long respected the brand for its innovation thanks to Pinnacle, a award-winning product like the Endorphin Collection, And now Saucony is successfully making progress on the broader run lifestyle opportunity, in part with what we call its core four franchises, the Ride, Guide, Triumph, and Hurricane. Across these key franchises, the team has improved performance with enhanced technology and cushioning, and elevated style with more versatile, wearable design. And the consumer is responding. In the fourth quarter sell-through in the U.S. of the core four franchise, the retail was up very strong double digits year over year. To fuel the pace, the brand opened 2025 with the introduction of the new ride and guide models, which are encouragingly also off to a strong start. In a few weeks, Saucony will push its innovation to the next level with the launch of its highly anticipated new super shoe, the Endorphin Elite 2. Built on next-generation IncrediRun foam and a full-length slotted carbon fiber plate for unmatched energy return. On the lifestyle side, Saucony continues to leverage its deep, authentic product archive to deliver trend-right styles to the marketplace, led by the ProGrid Omni, Ride Millennium, ProGrid Triumph, and others. And it continues to fuel brand heat with a powerhouse lineup of collaborations on these various platforms. Last quarter, the brand dropped collections with the likes of J Tips, Minted New York, Style Cow Paris, Homework, and Grayson. The team has done a remarkable job in a very short period of time, enjoying the social and cultural discourse, and is now thoughtfully translating this newfound energy into meaningful growth. Saucony continues to advance the company's key city effort as well. This year, the brand plans to repeat its sponsorship of the London 10K, expand its sponsorship efforts to include the Saucony Shoreditch and Eiffel Tower 10Ks, and open its first Pioneer store in London's Covent Garden in just a few months. I'm also excited by the progress the brand is making in Asia-Pacific, elevating our partnerships in the region's key markets and further expanding its branded store footprint. A year ago, I said I was bullish on the brand's prospects, and today I believe Saucony is on the cusp of doing something very special, leveraging its deep, authentic running roots, its tremendous performance product credibility, and the macro trends benefiting the category to leapfrog into a unique position at the intersection of running and culture, blurring the lines between performance and lifestyle. Moving on to Merrill. In the fourth quarter, Merrill posted its second consecutive quarter of growth, up 1% compared to the prior year. The health of the business continued to improve as well, resulting in gross margin expansion of nearly 400 basis points year over year. In the U.S. hiking category, the brand once again grew and took significant market share during the quarter. Its eighth time it has done so in the last nine quarters, while simultaneously gaining share in trail running. As a leader in hiking, Merrill remains focused on modernizing the trail through faster, lighter, and more versatile products like the Moab Speed 2 and Agility Peak 5. In Q4, both franchises continued to establish themselves as important collections for the brand, adding revenue and fueling performance with key accounts. This more athletic product has also enabled the brand to partner with several of its key retailers over the last year to reshape their assortments on the floor and begin evolving consumer perception of the brand in the marketplace. Further advancing its push to modernize the trail, Merrill launched the all-new, highly disruptive SpeedArc Surge BOA franchise last month, one of Time's Best New Inventions of 2024 and an ISPO Award winner. It employs advanced materials and the brand's new SpeedArc platform, including its Float Pro Plus supercritical foam and a stabilizing flex plate for a uniquely comfortable ride with exceptional energy return. So far, it has exceeded our expectations in selling through quickly at nearly a $300 price point. Layer of the score of the brand will follow up this introduction with a second style in the collection, the Speed Arc Madness. Merrill continues to make steady progress on the lifestyle side of the business as well. Tests with key counts this year have demonstrated demand with a younger consumer and driven an expansion of doors and revenue with U.S. specialty independents through strong double digits in Q4. Shipments of key performance franchises, including the Moab Speed 2, Agility Peak 5, and Moab 3, nearly quadrupled the lifestyle counts last quarter. Merrill's actively driving innovation in the category, and its strategy to modernize the trail is gaining real traction around the world. Switching over to Sweaty Betty. Sweaty Betty's top line was softer than our expectations for the quarter, but in alignment with our strategy, the brand continued to significantly improve its profitability with nearly 900 basis points of gross margin improvement versus last year. Store revenue was flat year over year, and e-commerce was down high single digits. The brand grew its mid-layer business in leggings, along with strong sell-through and outerwear, most notably the Nimbus collection. Sweaty Betty entered the new year with a healthier foundation and a strong team in place. The brand launched its new Don't Sweat It campaign a few weeks ago, which we plan to follow shortly with the next iteration of the venerable Wear the Damn Shorts campaign. And closing with the Wolverine brand. The print for Wolverine brand's revenue performance in the quarter is encouraging. However, our trends remain inconsistent based on order patterns, supply chain timing, and overall footing in the marketplace. Going forward, the brand is focused on bolstering its product innovation and pushing into more premium price points as a result. Starting with several new launches in 2025, including the new Vantage and Rancho Pro collections, which are built on the brand's new HyperRest technology for superior cushioning and energy return. In addition to improved product offerings, we're also focused on broadening the brand's reach. Wolverine plans to launch a new partnership in just a few weeks with country music superstar Jordan Davis, including a custom footwear collection apparel capsule later this year along with the Wolverine by Jordan Davis trade show that will celebrate the trades and donate to high school programs during his concerts this fall. As we turn the page to 2025, the company's on its firmest financial footing in years, and believably of our brands, are well positioned. Our teams are focused on continuing to dial in our product, sharpen our marketing, and drive the business forward. With the heavy lift of the stabilization behind us, everyone is excited for the next chapter for the company, a new chapter focused on growth. With that, I'd now like to hand the call over to Taryn to walk you through our fourth quarter results in detail and outlook for 2025. Taryn?