Wolverine World Wide, Inc.

Greetings and welcome to the Wolverine Worldwide Second Quarter Fiscal 2025 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If you'd like to ask a question, please press star and the number 1 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce you to your host, Jared Filippone, Head of Investor Relations. You may begin.

Good morning and welcome to our Second Quarter Fiscal 2025 Conference Call. On the call today are Chris Huffnagle, President and Chief Executive Officer, and Taryn Miller, Chief Financial Officer. Earlier this morning, we issued a press release announcing our financial results for the Second Quarter of 2025 and guidance for the Third Quarter of 2025. The 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 and 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 the Third Quarter of 2025, growth opportunities, and trends expected to affect the company's future performance made during today's conference call, or 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, I will now turn the call over to Christophe Nagle.

Thanks, Jared, and welcome again to Wolverine Worldwide. It's great to have you on the team. And good morning, everyone. Thanks for joining us on today's call. In the Second Quarter, we exceed our expectations on nearly every financial measure, headlined by double-digit revenue growth, with increases in every region and strong growth from our two biggest brands. Saucony was up 42% compared to last year, achieving record revenue for Q2, and Merrill grew 11%. The Work Group returned to growth, hosting a 2% revenue gain, while Sweaty Betty improved sequentially in the quarter, reflecting important progress in these two divisions. Our teams are intently focused on driving growth, building stronger brands, better managing the marketplace, and fueling consumer demand, and doing so in a healthy, profitable way. In the quarter, we delivered more than 400 basis points of gross margin expansion versus the prior year, once again achieving a quarterly record. Our high-quality growth enabled us to more than double earnings at the bottom line compared to last year. A good quarter by most measures. A new brand building playbook has proven effective, and we've been able to sequentially improve our -over-year revenue trends for five consecutive quarters now, this past quarter posting our best -over-year comparison in nearly three years. Our teams have done a tremendous job of embracing a new growth-focused mindset, and I'm grateful for their drive and resilience as we continue to build the new Wolverine worldwide. Looking ahead, I'm pleased we've built momentum in the business and that the company is on much firmer financial footing. We believe we're well positioned to navigate today's volatile macro environment, and that the actions we've taken to date and can take in the future will enable us to largely mitigate the impact of tariffs going forward. A new reality, however, is uncertainty in the global marketplace. Due to the ever-shifting global trade policies, coupled with a downstream effect on the economy and consumers, this reality informs both our outlook and our actions as we move forward into the back half of the year. With that, I'd like to share the progress our brands continue to make around the world for handing the call over to Taryn for more detail on the quarter and our outlook. Beginning with Saucony. Saucony delivered very strong broad-based revenue growth of 42%, coupled with 560 basis points of gross margin expansion in the quarter. The brand grew in every region and channel, while delivering record second quarter revenue. I believe 2025 will be a pivotal year for the brand, the result of an ambitious strategic reset in 2023 and 2024, and our new growth agenda. We positioned the brand at the intersection of authentic performance and lifestyle running, given unique footholds in the competitive landscape and opening of a significant addressable market opportunity for the brand. Over the last several months, Saucony executed with excellence on many fronts. Its run as one campaign, launched earlier this year, continued to position and build the brand with its target consumer. Brand search interest is up meaningfully around the world compared to last year, and we're seeing stronger affinity for the brand, specifically among runners and younger consumers. Saucony also continued to advance its key city strategy. Just a few weeks ago, following the recent opening of its store in Harajuku, Tokyo, the brand opened its Pioneer store in London's Covent Garden, one of the premier shopping destinations in the world. Importantly, the store serves as a valuable hub for brand activations in London. Last month, building on a success in 2024, Saucony was again the title sponsor for the London 10K, an amazing event with over 17,000 runners this year. The branch took over the city for the week with an impactful slate of great marketing and brand activations. I was fortunate to run in the event. It could have been more impressed by the brand's overwhelming presence around the city and how far the brand has come in such a short time. Saucony will expand its event sponsorship in London with a shortage 10K and then to France with the Eiffel Tower 10K later this year. In Paris, the brand garnered extensive interest a few weeks ago at Paris Fashion Week, highlighting its disruptive approach to collaborations and taking appointments with a rapidly growing number of highly influential retail partners. I'm also pleased to announce we just signed a lease to open the brand's third Pioneer store in Paris next year. Saucony's activations and compelling retail execution are engaging consumers directly and providing a vision inspiration for our partners around the world. Building on our efforts in Tokyo, for example, we've already started opening a host of new stores with our -in-class partners in Asia Pacific with plans to open more in the second half of this year. Saucony continues to fuel product innovation as well with its clinical endorphin franchise. The brand followed up the introduction of the award-winning endorphin Elite 2 Super Shoe in March with the new endorphin Speed 5, combining a nylon plate with power run PB foam for a fast lightweight design at less than $200. A compelling price point for so much innovation. The brand also continued to push forward its Core 4 franchises squarely aimed at the broader casual run opportunity with the launch of the Triumph 23, its premium neutral runner engineered to deliver plush comfort through innovative geometry and cushioning. Together, the Core 4 franchises, including the Ride, Guide, Triumph, and Hurricane, grew at a very strong double-digit pace at U.S. retail in the quarter. On the lifestyle side, Saucony continues to leverage its deep product archive to deliver authentic, trend-right styles to the marketplace. The brand's expansion of distribution within the lifestyle, athletic specialty channel continues to progress as a result of positive sales performance, adding roughly 400 doors for the back half of this year. This will raise the brand's door count in this channel to roughly 1,300 doors. While the opportunity is meaningful, we can take a methodical approach to thoughtfully expanding distribution. Saucony has made a remarkable amount of progress, but I maintain that it's poised to do more. The brand possesses a unique and compelling combination of heritage and authenticity, coupled with -in-class innovation and emerging cultural relevance. I believe that Saucony's vision does something very special. Moving to Merrill, our biggest brand, which came to build momentum and deliver another strong performance. The brand grew 11% in the second quarter, its fourth consecutive quarter of growth with increases in most regions and channels, and delivered nearly 600 basis points of gross margin expansion versus the prior year. Merrill remains focused on modernizing the trail. The brand's faster, lighter, more athletic product offerings continue to fuel momentum and drive significant share gains in the hype category. Moab Speed 2 revenue nearly quadrupled year over year at U.S. retail, making it the brand's second-largest hype franchise behind the industry-leading Moab 3, which grew at high single digits in the quarter. The award-winning SpeedArc Manus, built on the brand's new visually disruptive SpeedArc platform for a uniquely comfortable ride with exceptional energy return, is now the number four hype franchise at Merrill.com after just a few months of selling. Merrill has built good momentum, outpacing the market for 10 of the last 11 quarters in the U.S. hype category, which had been under pressure for the better part of two years. But encouragingly, we've now begun to see a broader hype trend improve a bit. We believe this is another positive indicator for Merrill, the market leader, moving forward. On a trail-running side, the Agility Peak 5 franchise is up double digits at U.S. retail, and the brand launched the new ProMorph, an all-terrain hybrid runner designed with premium flow plus foam for superior cushioning. Merrill's continued progress in modernizing the trail helps strengthen its ability to advance in lifestyle as well. Performance products like the Moab Speed 2 and Agility Peak 5 and lifestyle colorations and materials continue to gain traction at certain lifestyle retailers, reaching a younger consumer for the brand. In addition, revenue from progressive casual styles like our Wrap franchise and the iconic Jungle Mock grew significantly in the second quarter as well. In the U.S., Merrill, still in the early stages of evolving its distribution, has rationalized its points of distribution over the last couple of years. The brand is focused on developing more impactful -to-market plans with its key strategic outdoor specialty and sporting goods partners, and is establishing a footprint in the healthier lifestyle market. Globally, the brand saw accelerated growth in Asia Pacific in the quarter, thanks in part to its key city strategy, which has initially focused on Tokyo with its partner in Japan. Retail store concepts in Harajuku and Shibuya have continued to perform well, and together with compelling marketing and storytelling in the market, have effectively helped elevate the brand in one of the most influential cities in the world. Merrill is also now beginning to activate Paris as part of its key city strategy with focused campaign investment and in key to the brand built on its market share lead in outdoor footwear in France and delivered strong growth in the broader EMEA region. Moving on to Sweaty Betty and Wolverine. The two brands were focused on getting on track. Encouragingly, both brands saw sequential improvement in the second quarter. I'll start with Sweaty Betty. As we previously shared, our priority with Sweaty Betty has been to establish a healthy foundation from which to grow. We continue to make steady progress on reestablishing the brand's premium positioning. In Q2, we again increased the brand's full price mix and expanded gross margin by more than 500 basis points. Sweaty Betty's female-focused, inclusive positioning and storytelling has been effective, and our recent Wear the Dam Shorts campaign reinforced the brand's original rebellious, distinctive voice. Brand awareness is up. Consumer sentiment is dramatically higher and perception as an inner hot brand is trending positively. And while consumers already rank Sweaty Betty at the top of the competitive landscape for product quality, we're enhancing future product offerings with elevated design and more style innovation, including inducing more newness for the important holiday season this year. Looking ahead with a stronger foundation in place, we're taking action to drive profitable growth in Sweaty Betty with a multi-pronged strategy. First, the brand's -to-consumer business in the UK will be the number one priority. Digitally, we plan to deliver a reinvigorated flow of innovative premium products with a keen focus on our Madewell mover consumer target and deliver enhanced digital experiences for her, including the brand's recently launched app, which has been among the top downloaded shopping apps in the UK. Second, we're also taking action to further improve the productivity and profitability of our UK stores, along with a full fleet review of real estate to ensure we're in the right doors driving strong returns. Second, we're moving to a more disciplined, full-price DDC business online in the US. Sweaty became too promotional too often, which only served to erode the brand's equity. Third, we plan to expand the brand into new or nascent international markets, including leveraging Wolverine Worldwide's global network of -in-class distributor partners, as we began to do in China last year. Finally, we're integrating the brand's tools and processes into the Wolverine Worldwide ecosystem. We anticipate this will be largely complete later this month. This will be a critical enabler of our strategy and part of our broader technology modernization effort across the portfolio. In addition to these growth strategies for Sweaty Betty, we're exploring options to better leverage this team's DTC and broader apparel expertise across the portfolio to drive improved performance and growth in our footwear brands. One example is the brand's use of AI to better manage pricing and maximize margins, a solution Sweaty Betty piloted, and we expect to have a wider benefit across the portfolio. Today Sweaty Betty stands on better footing to scale over time, and I feel good about the recent work we've done to hone its strategy. I remain excited about the potential and opportunities Sweaty Betty provides for Wolverine Worldwide in the future. And concluding with Wolverine, in the second quarter, the brand's top line revenue trend improved and gross margin expanded over 400 basis points. We expect the brand to now be on a path of quarterly sequential improvement as new product and marketing initiatives begin to impact performance and the effects of comping elevated discounting in the prior year begin to displace. As we've discussed, the brand has been focused on strengthening its Western and premium price collections with products like the Rancher Pro. Over the past year, it has gained well over 100 basis points of market share in the US at prices above $125. To further this effort in June, the brand launched its new USA built workshop wedge, featuring premium full grain leather, a Goodyear welts construction, and price at $250. It sold out on Wolverine.com in less than a day. Just yesterday on the innovation front, the brand announced its new Infinity system, the pinnacle expression of its performance comfort technology, delivering two times the impact absorption and energy return of the leading workbook in the category, with price points between $175 and $155. As the market leader in the US workbook category, the brand continues to elevate product quality and innovation, while simultaneously telling better, more compelling stories and investing in the ground game with its wholesale partners. While we've made good progress for both sweaty, betty Wolverine in the last few months, there's more work to do to get them growing, contributing as we'd expect. With that, I'd now like to hand the call over to Taryn Miller to take you through our second quarter results and how we're viewing 2025 in greater detail. Taryn?