19 Mar Wolverine Worldwide Provides Business Update Related To Covid-19
Wolverine World Wide Inc. on Thursday provided a business update to highlight the company’s strong liquidity, supply chain stability, and agile business model in light of the challenging environment currently caused by the spread of Covid-19.
“The safety and well-being of our employees, customers and communities remains our top priority, and we are taking proactive measures to help ensure that safety,” said Blake Krueger, Wolverine’s chairman, president and CEO. “As a company we are well positioned to weather the current challenges and accelerate the execution of our Global Growth Agenda as conditions improve globally. We are fortunate to have a disciplined operating model and a strong balance sheet that positions us well to navigate the rapidly changing conditions. As the market stabilizes, we will be ready to capitalize on the power of our brands and operating platform to service our global customers and consumers.”
The company’s supply chain is currently operating at near full capacity and its logistics operations and distribution centers are currently at full strength. In addition, Wolverine’s global e-commerce business is fully operational and ready to serve customers, and the company intends to deploy even more resources to connect with consumers and support its momentum in this important channel. The company has temporarily closed its retail stores through at least March 27, 2020. This is a fleet of approximately 90 stores representing less than $100 million of annual revenue.
“During this time of uncertainty, we are implementing significant measures to further strengthen our balance sheet and enhance liquidity,” said Mike Stornant, senior vice president and CFO. “This includes a disciplined focus on closely managing inventory and working capital, while adjusting discretionary spending in all parts of the organization. We are acting quickly and believe this proactive approach will benefit us in the short- and long-term. We expect to continue to have financial flexibility to support the company’s operations now and into the future.”
At the end of 2019, the company’s bank-defined leverage ratio was 2.05 times, and total liquidity was approximately $1.3 billion.
Due to the heightened uncertainty and recent volatility in the retail market relating to the potential impact of Covid-19 on the company’s operations, including its duration and effect on overall customer demand, the company is withdrawing its guidance issued on February 25, 2020. The company plans to provide more information during its first quarter earnings call.