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What changed in WOLVERINE WORLD WIDE INC /DE/'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of WOLVERINE WORLD WIDE INC /DE/'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+295 added−341 removedSource: 10-K (2025-02-20) vs 10-K (2023-12-30)

Top changes in WOLVERINE WORLD WIDE INC /DE/'s 2024 10-K

295 paragraphs added · 341 removed · 268 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

46 edited+5 added−10 removed39 unchanged
Biggest changeEffective January 10, 2024 the Company sold the global Sperry ® business to Authentic Brands Group LLC. Keds ® : For over 100 years, Keds ® has been making timeless, comfortable, accessible footwear for consumers to step out into the world their way.
Biggest changeKeds ® : For over 100 years, Keds ® has been making timeless, comfortable, accessible footwear for consumers to step out into the world their way. Effective February 4, 2023 the Company sold the global Keds ® business to Designer Brands, Inc. Wolverine Leathers Division: The Wolverine Leathers Division markets pigskin leather for use primarily in the footwear industry.
Domestic Sales and Distribution The Company uses a variety of means to support sales to a variety of domestic distribution channels: • The Company uses a dedicated sales force and customer service team, third party sales representatives and point-of-purchase materials to support domestic sales. • The Company maintains core in-stock inventories to service department stores, national chains, specialty retailers, catalog retailers, independent retailers, uniform outlets and its own direct-to-consumer business. • The Company uses volume direct programs to ship products to retail customers and to provide products at competitive prices to service major retail, catalog, mass merchant and government customers. • The Company also operates brick and mortar retail stores and eCommerce sites.
Domestic Sales and Distribution The Company uses a variety of means to support sales to a variety of domestic distribution channels: • The Company uses a dedicated sales force and customer service team, third party sales representatives and point-of-purchase materials to support domestic sales. 7 • The Company maintains core in-stock inventories to service department stores, national chains, specialty retailers, catalog retailers, independent retailers, uniform outlets and its own direct-to-consumer business. • The Company uses volume direct programs to ship products to retail customers and to provide products at competitive prices to service major retail, catalog, mass merchant and government customers. • The Company also operates brick and mortar retail stores and eCommerce sites.
The Company’s brand marketing has an omni-channel, always-on approach and includes various means of delivery across digital, print and 7 radio, including advertising through event sponsorship, social networking sites, event sponsorships, in-store activation and sales and technical assistance. The Company operates branded eCommerce sites that the Company believes are effective tools for marketing and selling to consumers.
The Company’s brand marketing has an omni-channel, always-on approach and includes various means of delivery across digital, print and radio, including advertising through event sponsorship, social networking sites, event sponsorships, in-store activation and sales and technical assistance. The Company operates branded eCommerce sites that the Company believes are effective tools for marketing and selling to consumers.
Merrell ® can be found across the globe, on Merrell.com, in key outdoor and sporting goods retail stores and in Company owned Merrell ® stores. 5 Saucony ® : Saucony ® is a leading purpose-driven performance running lifestyle brand with roots dating back to 1898. Saucony ® targets both elite and casual runners through award-winning design, innovation and performance technology.
Merrell ® can be found across the globe, on Merrell.com, in key outdoor and sporting goods retail stores and in Company owned Merrell ® stores. Saucony ® : Saucony ® is a leading purpose-driven performance running lifestyle brand with roots dating back to 1898. Saucony ® targets both elite and casual runners through award-winning design, innovation and performance technology.
The Company seeks to maximize engagement and contribution of team members and the Company stays connected with team members across many experience touchpoints throughout the employee lifecycle, including regular pulse and check in surveys. Insights from these surveys are valuable to understanding employees' needs, which helps us develop strategies to maintain positive employee well-being.
The Company seeks to maximize engagement and contribution of team members and the Company stays connected with team members across many experience touchpoints throughout the employee lifecycle, including regular pulse and check in surveys. Insights from these surveys are valuable to understanding employees' needs, which helps us develop strategies to maintain positive employee sentiment and well-being.
The Company’s portfolio of brands are organized into the following reportable segments. • Active Group, consisting of Merrell ® footwear and apparel, Saucony ® footwear and apparel, Sweaty Betty ® activewear, and Chaco ® footwear; • Work Group, consisting of Wolverine ® footwear and apparel, Cat ® footwear, Bates ® uniform footwear, Harley-Davidson ® footwear and HYTEST ® safety footwear; Kids' footwear offerings from Saucony ® , Sperry ® , Keds ® , Merrell ® , Hush Puppies ® and Cat ® are included with the applicable brand.
The Company’s portfolio of brands is organized into the following reportable segments. • Active Group, consisting of Merrell ® footwear and apparel, Saucony ® footwear and apparel, Sweaty Betty ® activewear, and Chaco ® footwear; and • Work Group, consisting of Wolverine ® footwear and apparel, Cat ® footwear, Bates ® uniform footwear, Harley-Davidson ® footwear and HYTEST ® safety footwear; Kids' footwear offerings from Saucony ® , Sperry ® , Keds ® , Merrell ® , Hush Puppies ® and Cat ® are included with the applicable brand.
Cat ® Footwear originally created a small collection of rugged work boots designed to provide workers with the comfort and durability that met the challenges of the worksite. Today, Cat ® Footwear offers a wide range of footwear, including work boots and casual shoes for men, women and children, sold through a global distribution network.
Cat ® Footwear originally created a small collection of rugged work boots designed to provide workers with the comfort and durability that met the challenges of the worksite. Today, Cat ® Footwear offers a wide range of footwear, including work boots and casual shoes for men and women, sold through a global distribution network.
The Company believes that its overall global manufacturing strategy provides the flexibility to properly balance the need for timely shipments, high quality products and competitive pricing. 8 Trademarks, Licenses and Patents The Company holds a significant portfolio of registered and common law trademarks that identify its branded products and technologies.
The Company believes that its overall global manufacturing strategy provides the flexibility to properly balance the need for timely shipments, high quality products and competitive pricing. Trademarks, Licenses and Patents The Company holds a significant portfolio of registered and common law trademarks that identify its branded products and technologies.
The Company’s third-party sourcing strategy allows the Company to (i) benefit from lower manufacturing costs and state-of-the-art manufacturing facilities; (ii) source high quality raw materials from around the world; and (iii) avoid capital expenditures necessary for additional owned factories.
The Company’s third-party sourcing strategy allows the Company to (i) benefit from lower manufacturing costs and state-of-the-art manufacturing facilities; (ii) source high quality raw materials from around the world; and (iii) avoid capital expenditures necessary for owned factories.
Development starts on day one with an enriching day one experience designed to help employees 9 start off on the right foot from the moment they begin their career with the Company. The Company strives to be one of the best places to work.
Development starts on day one with an enriching day one experience designed to help employees start off on the right foot from the moment they begin their career with the Company. The Company strives to be one of the best places to work.
Historically, cash provided by operating activities is higher in the second half of the fiscal year due to collection of wholesale channel receivables and higher direct-to-consumer sales during the holiday season.
Historically, cash provided by operating 8 activities is higher in the second half of the fiscal year due to collection of wholesale channel receivables and higher direct-to-consumer sales during the holiday season.
The Company believes that its primary competitive advantages are its well-recognized brand names, patented proprietary designs, diverse product offerings and comfort technologies, wide range of distribution channels and diversified manufacturing and sourcing base. The Company combines quality materials and skilled workmanship to produce footwear according to its specifications at both Company-owned and third-party manufacturing facilities.
The Company believes that its primary competitive advantages are its well-recognized brand names, patented proprietary designs, diverse product offerings and comfort technologies, wide range of distribution channels and diversified manufacturing and sourcing base. The Company combines quality materials and skilled workmanship to produce footwear according to its specifications at third-party manufacturing facilities.
The Company meets its working capital requirements through internal operating cash flows and, as needed, borrowings under its revolving credit facility, as discussed in more detail under the caption "Liquidity and Capital Resources" in Item 7: "Management's Discussion and Analysis of Financial Condition and Results of Operations". The Company's working capital could also be impacted by other events, including pandemics.
The Company meets its working capital requirements through internal operating cash flows and, as needed, borrowings under its revolving credit facility, as discussed in more detail under the caption "Liquidity and Capital Resources" in Item 7: "Management's Discussion and Analysis of Financial Condition and Results of Operations". The Company's working capital could also be impacted by other events.
Through Saucony ® Run For Good brand platform and charitable foundation, Saucony ® is strengthening connections with consumers and elevating the positioning of the brand. The brand’s products are distributed primarily through leading run specialty and sporting goods retailers, as well as in Company-owned Saucony ® retail stores and an eCommerce site.
Through Saucony ® Run For Good brand platform and charitable foundation, Saucony ® is strengthening connections with consumers and elevating the positioning of the brand. The brand’s products are distributed primarily through leading run specialty, mall specialty and sporting goods retailers, as well as via an eCommerce site and in Company-owned Saucony ® retail stores.
HYTEST ® Safety Footwear : The HYTEST ® product line consists of high-quality work boots and shoes that incorporate various specialty safety features designed to protect against hazards of the workplace, including steel toe, composite toe, nano toe, metatarsal guards, electrical hazard protection, static dissipating and conductive footwear.
HYTEST ® Safety Footwear : The HYTEST ® product line consists of high-quality work boots and shoes that incorporate various specialty safety features designed to protect against hazards of the workplace, including metatarsal guards, steel toe, composite toe, nano toe, electrical hazard protection, static dissipating, puncture resistant and conductive footwear.
The brand is focused on meeting the functional biomechanical needs of runners while delivering on their emotional style needs as well.
The brand is focused on meeting the functional biomechanical needs of runners while delivering on their emotional 5 style needs as well.
The Company is the exclusive global footwear licensee of Caterpillar Inc., and for over two decades, Cat ® Footwear has been living up to the hardworking spirit of both the Caterpillar ® trademark and the millions of consumers who trust the brand.
The Company is the exclusive global footwear licensee of Caterpillar Inc., and for over three decades, Cat ® Footwear has been living up to the hardworking spirit of both the Caterpillar ® trademark and the millions of consumers who trust the brand.
The Company's annual talent planning process provides invaluable data to help retain top talent through career planning and leadership continuity by using that data to identify and mitigate succession gaps through hiring and development.
The Company's annual talent planning process provides invaluable data to help retain key talent through career planning and leadership continuity by using that data to identify and mitigate succession gaps through hiring and development.
Talent Recruitment, Retention and Development : The Company's talent strategy is focused on attracting top talent and developing, engaging, investing in and retaining top employees through a variety of retention and development efforts and world class corporate amenities. We strive to hire world class talent, while ensuring opportunities for growth and development for team members.
Talent Recruitment, Retention and Development : The Company's talent strategy is focused on attracting top talent and developing, engaging, investing in and retaining top employees through a variety of retention and development efforts and world class corporate amenities. We strive to hire world class talent, while aiming to ensure opportunities for growth and development for team members.
International Operations and Global Licensing The Company’s foreign-sourced revenue is generated from a combination of (i) sales of branded footwear and apparel through the Company’s owned operations in Canada, the United Kingdom and certain countries in continental Europe and Asia-Pacific; (ii) revenue from third-party distributors for certain markets and businesses; (iii) revenue from a network of third-party licensees; and (iv) revenue and income from joint ventures that market the Company’s branded products in Mexico and China.
International Operations and Global Licensing The Company’s foreign-sourced revenue is generated from a combination of (i) sales of branded footwear and apparel through the Company’s owned operations in Canada, the United Kingdom and certain countries in continental Europe and Asia-Pacific; (ii) revenue from third-party distributors for certain markets and businesses; (iii) revenue from a network of third-party licensees; and (iv) revenue and income from a joint venture that markets the Company’s branded products in Mexico.
Work Group Wolverine ® : For more than 135 years, Wolverine ® has existed to support people who forge their own path: men and women who stop at nothing to build the future they want. Wolverine ® designs and creates footwear, apparel and accessories made to outfit those working in the core trades across the world.
Work Group Wolverine ® : For more than 140 years, Wolverine ® has existed to support people who forge their own path: those who stop at nothing to build the future they want. Wolverine ® designs and creates footwear, apparel and accessories made to outfit those working in the core trades across the world.
CAT ® , CATERPILLAR, their respective logos, "Caterpillar Corporate Yellow", as well as corporate product identity used herein, are registered trademarks of Caterpillar Inc. Bates ® : Bates ® Footwear is a leading supplier of tactical and uniform footwear for first responders and U.S. Military members.
CAT ® , CATERPILLAR, their respective logos, "Caterpillar Corporate Yellow", as well as corporate product identity used herein, are registered trademarks of Caterpillar Inc. Bates ® : Bates ® Footwear is a leading supplier of tactical and uniform footwear for first responders.
With a persistent focus on innovation, thoughtful design and rigorous testing, Merrell ® has become a global leader in hiking footwear, with a rapidly growing following in trail running and lifestyle. All of this is fueled by a desire to build a world where everyone can safely enjoy the benefits of being outdoors.
After over 40 years, with a persistent focus on innovation, design and testing, Merrell ® has become a global leader in hiking footwear, with a rapidly growing following in trail running and lifestyle. All of this is fueled by a desire to build a world where everyone can safely enjoy the benefits of being outdoors.
Health and Safety : The health and safety of the Company's employees is one of its highest priorities. The Company has developed safety protocols to enhance the health and safety of all employees. The Environmental, Health, & Safety Council is composed of representatives from across the Company and coordinates health and safety matters on a real time basis.
The Company has developed safety protocols to enhance the health and safety of all employees. The Environmental, Health, & Safety Council is composed of representatives from across the Company and coordinates health and safety matters on a real time basis.
The brand services its loyal, fast-growing community worldwide through SweatyBetty.com, complemented by retail locations across the United Kingdom, Europe and Asia and the world’s best luxury retailers, including Selfridges, Harrods, Neiman Marcus and Nordstrom.
The brand services its loyal, fast-growing community worldwide through SweatyBetty.com, complemented by retail locations across the United Kingdom, United States, Europe, New Zealand and Asia and in the world’s best luxury retailers, including Selfridges, Harrods and Nordstrom.
The Company’s owned trademarks include Hush Puppies ® , Wolverine ® , Bates ® , Bounce ® , Chaco ® , HYTEST ® , Merrell ® , Saucony ® , Stride Rite ® , Sweaty Betty ® , and related logos and design marks.
The Company’s owned trademarks include but are not limited to Hush Puppies ® , Wolverine ® , Bates ® , Bounce ® , Chaco ® , HYTEST ® , Merrell ® , Saucony ® , Stride Rite ® , Sweaty Betty ® , and related logos and design marks.
Financial information regarding the Company’s environmental remediation activities is found in Note 17 to the Company's Consolidated Financial Statements. Human Capital Resources Employee Profile : As of December 30, 2023, the Company had approximately 4,100 domestic and foreign production, office and sales employees.
Financial information regarding the Company’s environmental remediation activities is found in Note 17 to the Company's Consolidated Financial Statements. Human Capital Resources Employee Profile : As of December 28, 2024, the Company had approximately 3,100 domestic and foreign retail, distribution, office and sales employees.
Marketing The Company’s marketing strategy is to develop brand-specific plans and related promotional materials that drive consumer demand creation, fuel consumer obsession and foster a consistent message for each of the Company’s brands across the globe.
The Wolverine Leathers Division was sold in two separate transactions in 2023. Marketing The Company’s marketing strategy is to develop brand-specific plans and related promotional materials that drive consumer demand creation, fuel consumer obsession and foster a consistent message for each of the Company’s brands across the globe.
The Company also holds many design and utility patents, copyrights and various other proprietary rights. The Company protects its proprietary rights under applicable laws. Seasonality The Company experiences moderate fluctuations in sales volume during the year, as reflected in quarterly revenue. The Company expects current seasonal sales patterns to continue in future years.
The Company protects its proprietary rights under applicable laws. Seasonality The Company experiences moderate fluctuations in sales volume during the year, as reflected in quarterly revenue. The Company expects current seasonal sales patterns to continue in future years.
Widely recognized for award-winning technologies, Saucony ® innovations include PWRRUN™ PB, a beaded superfoam that delivers high-performance energy return; PWRRUN+™ a cushioning foam for a plush ride; SPEEDROLL™ Technology, a blend of premium foam and forward geometry to promote a faster transition; and PWRTRAC™, a trail-specific outsole rubber.
Widely recognized for award-winning technologies, Saucony ® innovations include INCREDIRun foam, a revolutionary TPEE compound engineered to provide exceptional efficiency; PWRRUN™ PB, a beaded superfoam that delivers high-performance energy return; PWRRUN+™ a cushioning foam for a plush ride; and SPEEDROLL™ Technology, a blend of premium foam and forward geometry to promote a faster transition.
One of the Company's Core Values is "Our People Are the Difference," and the Company works to maximize the engagement and contribution of its current workforce and to attract the best talent available from outside the organization when needed.
The Company values its employees and works to maximize the engagement and contribution of its current workforce and to attract the best talent available from outside the organization when needed.
The Company's reportable segments and related brands are described in more detail below. 1. Active Group Merrell ® : Merrell ® believes in sharing the simple power of being outside – no matter who you are, where you come from, who you love, or how you move.
The Company's reportable segments and related brands are described in more detail below. 1. Active Group Merrell ® : Merrell ® believes in sharing the simple power of being outside.
Originating as an innovation in the whitewater rafting world, Chaco ® is the vibrant outdoor brand designing footwear for all walks of life and for a lifetime of adventure. Chaco ® products are distributed primarily through specialty footwear retailers, the Chaco ® eCommerce site, and other leading online and brick and mortar retailers. 2.
Originating as an innovator in the whitewater rafting world, Chaco ® continues to design footwear for all walks of life and for a lifetime of adventure, in and out of water. Chaco ® products are distributed primarily though the Chaco ® eCommerce site and other leading online and brick and mortar retailers. 2.
The Company has footwear marketing and distribution rights under the Cat ® and Harley-Davidson ® trademarks pursuant to license arrangements with the respective trademark owners. The Cat ® license was recently renewed and the license term runs through December 31, 2028 and the Harley-Davidson ® license term runs through December 31, 2024.
The Company has footwear marketing and distribution rights under the Cat ® and Harley-Davidson ® trademarks pursuant to license arrangements with the respective trademark owners. The Cat ® license term runs through December 31, 2028 and the Harley-Davidson ® license term runs through December 31, 2029. Both licenses are subject to early termination for breach.
Both licenses are subject to early termination for breach. The Company believes that consumers identify its products by the Company’s trademarks and that its trademarks are valuable assets. The Company has a policy of registering its primary trademarks and vigorously defending its trademarks against infringement or other threats whenever practicable.
The Company believes that consumers identify its products by the Company’s trademarks and that its trademarks are valuable assets. The Company has a policy of registering its primary trademarks and vigorously defending its trademarks against infringement or other threats whenever practicable. The Company also holds many design and utility patents, copyrights and various other proprietary rights.
Through the Sweaty Betty Foundation, the brand aims to give more girls access to activities they love, helping the next generation get and stay active for life. Chaco ® : For more than 30 years Chaco ® has been creating premium footwear for outdoor adventure in and out of water.
Through the Sweaty Betty Foundation, the brand aims to give more girls access to activities they love, helping the next generation get and stay active for life. Chaco ® : For more than 35 years Chaco ® has been inspiring new generations to take on everyday adventures.
The Company signed a multi-year license agreement in 2023 to license the Hush Puppies ® brand in the United States and Canada. The Company sold the rights to the Hush Puppies ® trademarks, patents, copyrights and domains in China, Hong Kong and Macau to its current sublicensee, Beijing Jiaman Dress Co., Ltd. The transaction closed on September 14, 2023.
The Company sold the rights to the Hush Puppies ® trademarks, patents, copyrights and domains in China, Hong Kong and Macau to its current sublicensee, Beijing Jiaman Dress Co., Ltd. The transaction closed on September 14, 2023. Stride Rite ® Licensed Business: With a history dating back to 1919, Stride Rite ® is an industry leader in kids' footwear.
The Company encourages individuals to support these goals, including through internal Employee Resource Groups that connect, celebrate, and support communities across the organization. The Company offers employees a comprehensive diversity, equity, and inclusion learning program which includes learning about inclusive teams, inclusive leadership, and inclusive selection.
The Company has internal Employee Resource Groups open to all employees that connect, celebrate, and support communities across the organization. In addition, the Company offers employees a comprehensive inclusion learning program which includes learning about inclusive teams, inclusive leadership, and inclusive selection. Health and Safety : The health and safety of the Company's employees is one of its highest priorities.
Sweaty Betty ® : Sweaty Betty ® is a global women’s activewear and lifestyle brand that has been on a mission to empower women through fitness and beyond since 1998. Famous for its “bum-sculpting” leggings and innovative designs, Sweaty Betty ® fuses performance and style with technical, high-performance fabrics and responsibly sourced materials.
Sweaty Betty ® : Sweaty Betty ® is a global women’s activewear and lifestyle brand that has been on a mission to empower women through fitness and beyond since 1998.
HYTEST ® footwear is distributed primarily through a network of independently-owned Shoemobile ® mobile truck 6 retail outlets providing direct sales of the Company’s occupational and work footwear brands to workers at industrial facilities and also through direct sales arrangements with large industrial customers.
HYTEST ® footwear is distributed primarily through a distributor network with Shoemobile ® mobile trucks and retail outlets providing direct sales of the Company’s occupational and work footwear brands to workers at industrial facilities and through direct sales arrangements with large industrial customers. 6 Other Businesses In addition to its reportable segments, the Company operates sourcing operations, a multi-brand direct-to-consumer business, the licensing of its Stride Rite ® brand and Hush Puppies ® brand.
Sourcing Division: The sourcing division earns third-party commission revenue by providing consulting services related to product development, production control, quality assurance, materials procurement, compliance and other services. Multi-brand Direct-to-Consumer Division: The multi-brand direct-to-consumer division includes retail stores that sell footwear and apparel from the Company's brand portfolio and other brands.
The Company signed a multi-year license agreement in 2017 to license the Stride Rite ® brand. Sourcing Division: The sourcing division earns third-party commission revenue by providing consulting services related to product development, production control, quality assurance, materials procurement, compliance and other services.
The Company believes that optimism is contagious and that by encouraging positivity it can help shape a better world. Hush Puppies ® footwear is distributed through wholesale and licensed channels, and through eCommerce sites.
Today, Hush Puppies ® exists to inspire consumers to live life on the bright side. The Company believes that optimism is contagious and that by encouraging positivity it can help shape a better world.
The Company also operated a performance leathers business, which was sold in 2023. Sperry ® : Sperry ® was founded in 1935 by avid sailor, inventor and intrepid explorer Paul Sperry. The brand is fully rooted in the history of American style and continues to craft the tools for life’s memorable experiences on, off and by the water.
The brand is fully rooted in the history of American style and continues to craft the tools for life’s memorable experiences on, off and by the water. Effective January 10, 2024 the Company sold the global Sperry ® business to Authentic Brands Group LLC.
Effective February 4, 2023 the Company sold the global Keds ® business to Designer Brands, Inc. Hush Puppies ® : Launched in 1958, Hush Puppies ® has a history of bringing color and optimism to a boring, brown shoe category. Today, Hush Puppies ® exists to inspire consumers to live life on the bright side.
The Company's results included in Other also include brands and businesses that the Company sold in 2023 and 2024, as noted below. Hush Puppies ® : Launched in 1958, Hush Puppies ® has a history of bringing color and optimism to a boring, brown shoe category.
The Company believes that leaders should be developed at every stage of their career, from new managers to executives. We have a global leadership development program for all people leaders in which we partner with top educational institutions.
The Company believes that leaders should be developed at every stage of their career, from new managers to executives. Through partnership with Harvard Business School, our new manager leadership development program fosters collaboration and teaches managers leadership skills needed to build, retain, and inspire our teams.
In addition, the Hush Puppies ® brand is licensed to third parties engaged in the manufacturing, marketing and distribution of apparel, handbags, eyewear, socks, watches and plush toys sold around the world. Hush Puppies ® , with its basset hound icon, is one of the most well-known and loved brands worldwide.
As a result of the decision to license the brand in North America in 2023, Hush Puppies® became a fully global licensed brand with over 560 Hush Puppies stores and multiple eCommerce sites across the globe. Hush Puppies®, with its basset hound icon, is one of the most well-known and loved brands worldwide.
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Other Businesses In addition to its reportable segments, the Company operates sourcing operations, a multi-brand direct-to-consumer business, the licensing of its Stride Rite ® brand and Hush Puppies ® brand. The Company’s results included in Other also included Sperry ® , which was sold in 2024, and Keds ® , which was sold in 2023.
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Famous and trusted for its “bum-sculpting” leggings and innovative designs, Sweaty Betty ® fuses performance and style with technical, high-performance fabrics and responsibly sourced materials designed to outlast, outperform and outfit active women at all life stages.
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From the invention of the world's first boat shoe, Sperry ® is a market leader in both boat shoes and wet weather boots, and has expanded its business into casuals and sneakers. The brand is primarily distributed through Sperry.com and in Company owned Sperry ® retail stores, as well as leading premium and better lifestyle retailers.
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Multi-brand Direct-to-Consumer Division: The multi-brand direct-to-consumer division includes retail stores that sell footwear and apparel from the Company's brand portfolio and other brands. Sperry ® : Sperry ® was founded in 1935 by avid sailor, inventor and intrepid explorer Paul Sperry.
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Ever since the creation of the iconic Keds ® Champion "sneaker" back in 1916, Keds ® has held the belief that when we feel comfortable inside and out, we can leap forward and make our marks on the world. This belief continues to inspire and drive us every day.
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The Company's internal global leadership programs teach skills needed to lead through transformation and build key leadership capabilities needed for the Company to 9 grow. The Company also provides high potential assessments and executive coaching to its leadership to build capabilities needed to grow the Company’s business and talent.
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Keds ® designs every product to support everyone—to give them the versatility, comfort, and style they need to confidently live as their truest selves. Keds ® is focused on driving unique marketing and product stories through Keds.com and distributing footwear at leading footwear retailers worldwide.
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To enhance all corporate employees’ career development and growth, the Company offers a vast library of expert-led courses covering business, technical, and creative skills, quick reference guides, toolkits and internal one-on-one professional coaching.
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Stride Rite ® Licensed Business: With a history dating back to 1919, Stride Rite ® is an industry leader in kids' footwear. The Company signed a multi-year license agreement in 2017 to license the Stride Rite ® brand. Wolverine Leathers Division: The Wolverine Leathers Division markets pigskin leather for use primarily in the footwear industry.
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Inclusion and Belonging : Wolverine World Wide is committed to creating an inclusive culture where everyone feels valued and respected, and all have an equal opportunity to succeed. The Company recently launched UN1TED, the goal of which is to amplify the progress made to date in advancing the Company's inclusion and belonging initiatives.
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The Company believes pigskin leather offers superior performance and other advantages over cowhide leather. The Company’s waterproof and stain resistant leathers are featured in some of the Company’s footwear lines and also sold to external footwear brands. The Wolverine Leathers Division was sold in two seperate transactions in 2023.
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This program focuses on sharpening participants' business leadership capabilities needed to grow the Company's business and people leadership capabilities needed to build, retain, and inspire top performing teams. As we continue to evolve and transform, the continued development of leaders is critical to our future success.
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To enhance employees career development, the Company offers a wide variety of virtual learning courses, instructor led classes, video libraries, and quick reference documents and provides tuition reimbursement to help employees achieve higher education goals.
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Diversity, Equity, and Inclusion: Wolverine Worldwide is committed to creating a diverse and inclusive culture where everyone feels a sense of belonging and being valued, and to building a team that is representative of everywhere the Company's employees work, live, and do business.
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The Company started this journey in 2020, focusing on creating a framework, establishing relationships, and working with expert outside partners to lay a foundation on which to build. The Company's newly established internal DE&I office plans to continue and amplify the progress made to date to advance the Company's diversity, equity and inclusion goals.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

128 edited+7 added−42 removed28 unchanged
Biggest changePotential impacts to the Company’s business can be materially adversely affected by several factors related to a health crisis, including, but not limited to: • The inability of employees, suppliers and other business providers to carry out tasks at ordinary levels of performance as a result of safety measures taken to limit the spread of infectious disease outbreaks. • Required closures of retail stores operated by the Company or the Company's wholesale customers as well as decreased retail traffic due to social distancing measures, store closures, reduced operating hours, and/or changes in consumer behavior. • Negative effects on consumer demand for our products as a result of decreased consumer spending due to general macroeconomic conditions, decreased disposable income and increased unemployment. • Wholesale and distributor customer order cancellations due to lower consumer demand. • Decline in the performance or financial condition of the Company’s major wholesale customers as a result of retail store closures, bankruptcy or liquidation. • Consumer demand for our products may be adversely impacted by economic conditions. 11 • Disruption to the operations of the Company’s distribution centers and its third-party manufacturers because of facility closures, reductions in operating hours, labor or material shortages, travel limitations or mass transit disruptions. • Additional expenses related to mitigating the impact of a health crisis on regular operations. • Supply chain disruption effecting the Company's ability to receive and distribute goods as well as increases in supply chain costs. • Increased cyber security risk due to the increase in the number of employees working remotely. • Volatility in the availability and prices for commodities for raw materials used in the Company's products and related inflationary pressures.
Biggest changePotential future impacts to the Company’s business related to a health crisis, include, among others: • The inability of employees, suppliers and other business providers to carry out tasks at ordinary levels of performance due to measures taken to limit the spread of infectious diseases. • Decreased retail traffic due to store closures, social distancing measures, reduced operating hours, and/or changes in consumer behavior. • Wholesale and distributor customer order cancellation and decreased consumer demand for the Company's products as a result of decreased consumer spending due to general macroeconomic conditions, decreased disposable income and increased unemployment. • Decline in the performance or financial condition of the Company’s major wholesale customers as a result of retail store closures, bankruptcy or liquidation. • Disruption to the operations of the Company’s distribution centers and its third-party manufacturers because of facility closures, reductions in operating hours, labor or material shortages, travel limitations or mass transit disruptions. • Additional expenses related to mitigating the impact of a health crisis on regular operations. • Supply chain disruption affecting the Company's ability to receive and distribute goods and increasing supply chain costs. • Increased cyber security risk due to the increase in the number of employees working remotely. • Volatility in the availability and prices for commodities for raw materials used in the Company's products and related inflationary pressures.
Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, board and workforce diversity, labor conditions, human rights, and cybersecurity and data privacy. Third parties have also developed proprietary ratings or analyses of companies based on certain ESG metrics.
Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, board and workforce diversity, labor conditions, human rights, and cybersecurity and data privacy. Third parties have developed proprietary ratings or analyses of companies based on certain ESG metrics.
Foreign currency exchange rate fluctuations may 14 also adversely impact third parties that manufacture the Company’s products by increasing their costs of production and raw materials and making such costs more difficult to finance, thereby raising prices for the Company, its distributors and its licensees. The Company’s hedging strategy may not successfully mitigate the Company’s foreign currency exchange rate risk.
Foreign currency exchange rate fluctuations may also adversely impact third parties that manufacture the Company’s products by increasing their costs of production and raw materials and making such costs more difficult to finance, thereby raising prices for the Company, its distributors and its licensees. The Company’s hedging strategy may not successfully mitigate the Company’s foreign currency exchange rate risk.
The Company’s continued ability to sell its products at competitive prices and to meet shifts in consumer preferences quickly will affect its future sales. If the Company is unable to respond effectively to competitive pressures, its results of operations and financial position may be adversely affected. Unseasonable or extreme weather conditions could adversely affect the Company’s results of operations.
The Company’s continued ability to sell its products at competitive prices and to meet shifts in consumer preferences quickly will affect its sales. If the Company is unable to respond effectively to competitive pressures, its results of operations and financial position may be adversely affected. Unseasonable or extreme weather conditions could adversely affect the Company’s results of operations.
Failure to comply with legal requirements could result in, among other things, revocation of required licenses, administrative enforcement actions, fines and civil and criminal liability. Various third parties have brought, and in the future could bring actions against the Company alleging health-related or other harm arising from non-compliance.
Failure to comply with legal requirements could result in, among other things, revocation of required licenses, enforcement actions, fines and civil and criminal liability. Various third parties have brought, and in the future could bring actions against the Company alleging health-related or other harm arising from non-compliance.
The Company relies on a combination of trade secret, patent, trademark, copyright and other laws, license agreements and other contractual provisions and technical measures to protect its intellectual property rights; however, some countries’ laws do not protect intellectual property rights to the same extent U.S. laws do.
The Company relies on a combination of trade secret, patent, trademark, copyright and other laws, license agreements and other contractual provisions and technical measures to protect its intellectual property rights; however, some countries’ laws do not protect intellectual property rights to the same extent as U.S. laws.
The Company's insurance coverage may be insufficient to cover all losses and would not remedy damage to the Company's reputation. In addition, employees may intentionally or inadvertently cause data or security breaches that result in unauthorized release of personal or confidential information.
The Company's insurance coverage may be insufficient to cover all losses and would not remedy damage to the Company's reputation. In addition, employees may intentionally or inadvertently cause security breaches that result in unauthorized release of personal or confidential information.
The imposition of such costs or restrictions in countries where the Company operates, as well as in countries where its third-party distributors and licensees operate, could result in increases in the cost of the Company’s products generally and adversely affect its sales and profitability.
The imposition of such costs or restrictions in countries where the Company operates, as well as in countries where its third-party distributors and licensees operate, could result in increases in the cost of the Company’s products and adversely affect its sales and profitability.
The Company’s attempts to protect its brands through approval rights over design, production processes, quality, packaging, merchandising, distribution, advertising and promotion of its licensed products may not be successful as the Company cannot completely control the use by its licensees of its licensed brands. The misuse of a brand by a licensee could adversely affect the value of such brand.
The Company’s attempts to protect its brands through approval rights over design, production processes, quality, packaging, merchandising, distribution, advertising and promotion of its licensed products may not be successful as the Company cannot completely control its licensees' use of its licensed brands. The misuse of a Company brand by a licensee could adversely affect the value of such brand.
Conversely, excess inventory can result in lower gross margins if the Company lowers prices in order to liquidate inventory. In addition, inventory may become obsolete as a result of changes in consumer preferences over time. The Company’s business, results of operations and financial position could be adversely affected if it is unable to effectively manage its inventory.
Conversely, excess inventory can result in lower gross margins if the Company lowers prices in order to liquidate inventory. In addition, inventory may become obsolete as a result of changes in consumer preferences. The Company’s business, results of operations and financial position could be adversely affected if it is unable to effectively manage its inventory.
Furthermore, if any of the Company’s major wholesale customers experiences a significant downturn in its business, or fails to remain committed to the Company’s products or brands, these wholesale customers may reduce or discontinue purchases from the Company, which could have an adverse effect on the Company’s results of operations and financial position.
If any of the Company’s major wholesale customers experiences a significant downturn in its business, or fails to remain committed to the Company’s products, these customers may reduce or discontinue purchases from the Company, which could have an adverse effect on the Company’s results of operations and financial position.
Concerns regarding acts of terrorism or regional and international conflicts and concerns regarding public health threats, such as COVID-19, have created and may in the future create significant global economic and political uncertainties that may have adverse effects on consumer demand, acceptance of U.S. brands in international markets, foreign sourcing of products, shipping and transportation, product imports and exports and the sale of products in foreign markets, any of which could adversely affect the Company’s ability to source, manufacture, distribute and sell its products.
Concerns regarding acts of terrorism or regional and international conflicts and concerns regarding public health threats, such as COVID-19, have created and may in the future create significant global economic and political uncertainties that may adversely affect consumer demand, acceptance of U.S. brands in international markets, foreign sourcing of products, shipping and transportation, product imports and exports and the sale of products in foreign markets, any of which could adversely affect the Company’s ability to source, manufacture, distribute and sell its products.
The Company’s quarterly sales and earnings may fluctuate, and the Company or securities analysts may not accurately estimate the Company’s financial results, which may result in volatility in, or a decline in, the Company's stock price. Decreases in the returns provided to our stockholders may ultimately adversely affect our business, results of operations and financial condition.
The Company’s quarterly sales and earnings may fluctuate, and the Company or securities analysts may not accurately estimate the Company’s financial results, which may result in volatility, or a decline, in the Company's stock price. Decreases in the returns provided to the Company's stockholders may ultimately adversely affect its business, results of operations and financial condition.
Increases in costs for commodities, equipment, services and materials used in production could have a negative impact on the Company’s results of operations and financial position. An increase in the Company’s effective tax rate or negative determinations by domestic or foreign tax authorities could have an adverse effect on the Company’s results of operations and financial position.
Increases in costs for commodities, equipment, services and materials could have a negative impact on the Company’s results of operations and financial position. An increase in the Company’s effective tax rate or negative determinations by domestic or foreign tax authorities could have an adverse effect on the Company’s results of operations and financial position.
In addition, the restrictive covenants in the Credit Agreement require the Company to maintain specified financial ratios and satisfy other financial condition tests. These restrictive covenants may limit the Company’s ability to finance future operations or capital needs or to engage in other business activities.
In addition, the Credit Agreement requires the Company to maintain specified financial ratios and satisfy other financial condition tests. These restrictive covenants may limit the Company’s ability to finance future operations or capital needs or to engage in other business activities.
The annual cost of benefits can vary significantly depending on a number of factors, including changes in the assumed or actual rate of return on pension plan assets, a change in the discount rate or mortality assumptions used to determine the annual service cost related to the defined benefit 18 plans, a change in the method or timing of meeting pension funding obligations and the rate of health care cost inflation.
The annual cost of benefits can vary significantly depending on various factors, including changes in the assumed or actual rate of return on pension plan assets, a change in the discount rate or mortality assumptions used to determine the annual service cost related to defined benefit plans, a change in the method or timing of meeting pension funding obligations and the rate of health care cost inflation.
Provisions of the Delaware General Corporation Law, as well as the Company’s certificate of incorporation and bylaws, could discourage, delay or prevent a merger, acquisition or other change in control of the Company that might benefit the Company's stockholders.
Provisions of the Delaware General Corporation Law and the Company’s certificate of incorporation and bylaws could discourage, delay or prevent a merger, acquisition or other change in control of the Company that might benefit the Company's stockholders.
These issues have in the past and may in the future delay importation of products or require the Company to locate alternative ports or warehousing providers to avoid disruption to customers. These alternatives may not be available on short notice or could result in higher costs, which could have an adverse impact on the Company’s business and financial condition.
These issues have in the past and may in the future delay importation of products or require the Company to locate alternative ports or warehousing providers. Alternatives may not be available on short notice or could result in higher costs, which could have an adverse impact on the Company’s business and financial condition.
The final determination of any of these examinations could have an adverse effect on the Company’s results of operations and financial position. 17 An impairment of goodwill or other intangibles could have an adverse impact to the Company’s results of operations.
The final determination of any of these examinations could have an adverse effect on the Company’s results of operations and financial position. 16 An impairment of goodwill or other intangibles could have an adverse impact to the Company’s results of operations.
The Company’s competitors may own or license brands with greater name recognition; implement more effective marketing campaigns; adopt more aggressive pricing policies; make more attractive offers to potential employees, distribution partners and manufacturers; or respond more quickly to changes in consumer preferences.
The Company’s competitors may have brands with greater name recognition; implement more effective marketing campaigns; adopt more aggressive pricing policies; make more attractive offers to potential employees, distribution partners and manufacturers; or respond more quickly to changes in consumer preferences.
The Company’s ability to effectively manage its inventories and accurately forecast demand are important factors in its operations. Inventory shortages can impede the Company’s ability to meet demand, adversely affect the timing of shipments to customers and, consequently, adversely affect business relationships with retail customers, diminish brand loyalty and decrease sales.
The Company’s ability to effectively manage its inventories and accurately forecast demand are important factors in its operations. Inventory shortages can impede the Company’s ability to meet demand and, consequently, adversely affect business relationships with retail customers, diminish brand loyalty and decrease sales.
Responding to these actions can be costly and time-consuming and could divert the attention of our board and senior management from managing our operations and pursuing our business strategies. Changes in general economic conditions and other factors affecting consumer spending could adversely affect the Company’s sales, costs, operating results or financial position.
Responding to these actions can be costly and time-consuming and could divert the attention of the board and senior management from managing the Company's operations. Changes in general economic conditions and other factors affecting consumer spending could adversely affect the Company’s sales, costs, operating results or financial position.
The Company sells its products to wholesale customers and extends credit based on an evaluation of each wholesale customer’s financial condition. The financial difficulties of a wholesale customer could cause the Company to stop doing business with that wholesale customer or reduce its business with that wholesale customer.
The Company extends credit to its wholesale customers based on an evaluation of each wholesale customer’s financial condition. A wholesale customer's financial difficulties could cause the Company to reduce or stop doing business with that customer.
Any intellectual property lawsuits or threatened lawsuits in which the Company is involved, either as a plaintiff or as a defendant, could cost the Company a significant amount of time and money and distract management’s attention from operating the Company’s business.
Any intellectual property lawsuits or threatened lawsuits in which the Company is a plaintiff or a defendant could cost the Company a significant amount of time and money and distract management’s attention from operating the Company’s business.
The Company’s quarterly sales and earnings can vary due to a number of factors, many of which are beyond the Company’s control, including the following: • In the wholesale business, sales of footwear depend on orders from major customers, who may change delivery schedules, change the mix of products they order or cancel orders without penalty. • Changes to the Company's estimated annual tax rate which is based on projections of its domestic and international operating results for the year, which the Company reviews and revises as necessary each quarter. • The Company's earnings are also sensitive to a number of factors that are beyond the Company’s control, including certain manufacturing and transportation costs, changes in product sales mix, geographic sales trends, weather conditions, customer demand, consumer sentiment and currency exchange rate fluctuations.
The Company’s quarterly sales and earnings can vary due to a number of factors, many of which are beyond its control, including: • Orders from major wholesale customers, which may change delivery schedules, change the mix of products they order or cancel orders without penalty. • Changes to the Company's estimated annual tax rate, which is based on projections of its domestic and international operating results for the year, which the Company reviews and revises as necessary each quarter. • Certain manufacturing and transportation costs, changes in product sales mix, geographic sales trends, weather conditions, customer demand, consumer sentiment and currency exchange rate fluctuations.
If the Company is unable to maintain or enhance the images of its brands or if it is unable to timely and appropriately respond to new competition, changing consumer preferences and evolving footwear and apparel trends, consumers may consider its brands’ images to be outdated and associate its brands with styles that are no longer popular, which would decrease demand for its products.
If the Company is unable to maintain and improve its competitive position, maintain or enhance the images of its brands, timely and appropriately respond to new competition, changing consumer preferences and evolving footwear and apparel trends, consumers may consider the Company's brands’ images to be outdated and associate its brands with styles that are no longer popular, which would decrease demand for its products.
Increased ESG-related compliance costs could result in increases to the Company’s overall operational costs. Failure to adapt to or comply with regulatory requirements or investor or other stakeholder expectations and standards could negatively impact the Company’s reputation, ability to do business with certain partners, and stock price.
Increased ESG-related compliance costs could increase the Company’s overall operational costs. Failure to adapt to or comply with regulatory requirements or investor or other stakeholder expectations and standards could negatively impact the Company’s reputation, ability to do business with certain partners, and stock price.
In particular, the techniques used by criminals to obtain unauthorized access to sensitive data change frequently and often are not recognized until launched against a target; accordingly, the Company may be unable to anticipate these techniques or implement adequate preventative measures.
The techniques used to obtain unauthorized access to sensitive data change frequently and often are not recognized until launched against a target; accordingly, the Company may be unable to anticipate these techniques or implement adequate preventative measures.
The Company’s logistics and distribution systems include computer-controlled and automated equipment, which are subject to a number of risks related to computer system upgrades, data accuracy, security or computer viruses, the proper operation of software and hardware, power interruptions or other system failures. Substantially all of the Company’s products are distributed from a relatively small number of locations.
The Company’s logistics and distribution systems include computer-controlled and automated equipment, which are subject to a number of risks related to, data accuracy, security breaches or computer viruses, software or hardware malfunction, power interruptions or other system failures. Substantially all of the Company’s products are distributed from a relatively small number of locations.
For example, regulatory actions, punitive class actions lawsuits and individual lawsuits have been filed against the Company alleging claims relating to property damage, remediation and human health effects, among other claims, arising from the Company’s operations, including its handling, storage, treatment, transportation and/or disposal of waste.
The Company may be named as a defendant lawsuits and regulatory actions. For example, regulatory actions, punitive class actions lawsuits and individual lawsuits have been filed against the Company alleging claims relating to property damage, remediation and human health effects, among other claims, arising from the Company’s operations, including its handling, storage, treatment, transportation and/or disposal of waste.
If a party with which the Company does business is found to have violated applicable laws or ethical standards, the Company could be subject to negative publicity that could damage its reputation, negatively affect the value of its brands and subject the Company to legal risks.
If a party with which the Company does business is found to have violated applicable laws or ethical standards, the Company could be subject to negative publicity that damages its reputation, negatively affects the value of its brands and subjects the Company to legal risks.
Foreign Corrupt Practices Act (“FCPA”), which prohibits U.S. companies from making improper payments to foreign officials for the purpose of obtaining or retaining business; • unexpected changes in regulatory requirements; and • new tariffs or other barriers in some international markets, including China.
Foreign Corrupt Practices Act (“FCPA”), which prohibits U.S. companies from making improper payments to foreign officials for the purpose of obtaining or retaining business; and • new tariffs or other barriers in international markets, including China.
The Company’s failure to successfully respond to these factors could adversely affect the Company’s direct-to-consumer business, as well as limit the Company's ability to successfully develop and expand the omni-channel experience for customers, damage its reputation and brands, and have an adverse effect on the Company’s results of operations and financial position.
The Company’s failure to respond to these factors successfully could adversely affect the Company’s direct-to-consumer business, limit the Company's ability to develop and expand the omni-channel experience for customers or damage its reputation and brands, any of which may have an adverse effect on the Company’s results of operations and financial position.
An increase in the Company’s effective tax rate could have an adverse effect on its results of operations and financial position. In addition, the Company’s income tax returns are subject to examination by the Internal Revenue Service and other domestic and foreign tax authorities.
An increase in the Company’s effective tax rate could have an adverse effect on its results of operations and financial position. The Company’s income tax returns are subject to examination by domestic and foreign tax authorities.
The Company’s reputation and competitive position depend on its third-party manufacturers, distributors, licensees and others complying with applicable laws and ethical standards. The Company cannot ensure that its independent contract manufacturers, third-party distributors, third-party licensees and others with which it does business comply with all applicable laws and ethical standards relating to working conditions and other matters.
The Company’s reputation and competitive position depend on its third-party manufacturers, distributors, licensees and others complying with applicable laws and ethical standards. The Company cannot ensure that its independent contract manufacturers, third-party distributors, third-party licensees and others with which it does business comply with all applicable laws and ethical standards.
If the Company does not prevail on any intellectual property claims, then the Company may have to change its manufacturing processes, products or trade names, any of which could reduce its profitability. In addition, some of the Company’s branded footwear operations are operated pursuant to licensing agreements with third-party trademark owners. These agreements are subject to early termination for breach.
If the Company does not prevail on any intellectual property claims, it may have to change its manufacturing processes, products or trade names, any of which could reduce its profitability. In addition, some of the Company’s branded footwear operations are operated pursuant to licensing agreements with third-party trademark owners.
The Company’s operations are subject to various federal, state and local laws and regulations relating to the protection of the environment, including those governing the discharge of pollutants into the air, soil and water, the management and disposal of solid and hazardous materials and wastes, employee exposure to hazards in the workplace, and the investigation and 19 remediation of contamination resulting from releases of hazardous materials.
The Company’s operations are subject to various federal, state and local laws and regulations relating to the protection of the environment, including those governing the discharge of pollutants, the management and disposal of hazardous materials and wastes, employee exposure to workplace hazards, and the investigation and remediation of contamination resulting from releases of hazardous materials.
The cost of commodities, equipment, services and materials is subject to change based on availability and general economic and market conditions that are difficult to predict. Various conditions, such as diseases affecting the availability of leather, affect the cost of the footwear marketed by the Company.
The cost of commodities, equipment, services and materials is subject to change based on availability and general economic and market conditions that are difficult to predict. Various conditions, such as diseases affecting the availability of leather, affect the cost of the Company's products.
Any failures or delays in completing divestitures could have an adverse effect on the Company’s financial results and ability to execute its strategy. The Company’s international operations may be affected by legal, regulatory, political and economic risks. The Company’s ability to conduct business in new and existing international markets is subject to legal, regulatory, political and economic risks.
Any failures or delays in completing divestitures could have an adverse effect on the Company’s financial results and ability to execute its strategy. The Company’s international operations may be affected by legal, regulatory, political and economic risks.
The Company is subject to inflationary pressures, including increased costs in many aspects of our business, such as the cost of raw materials, transportation, and labor, which the Company may not be able to offset with cost savings or price increases on its 15 products.
The Company is subject to inflationary pressures, including increased costs of raw materials, transportation, labor and other aspects of its business, which the Company may not be able to offset with cost savings or price increases on its products.
Foreign currency exchange rate fluctuations affect the Company’s revenue and profitability. Changes in foreign currency exchange rates may impact the Company’s financial results positively or negatively in any given period, which may make it difficult to compare the Company’s operating results from different periods.
Changes in foreign currency exchange rates may impact the Company’s financial results positively or negatively in any given period, which may make it difficult to compare the Company’s operating results from different periods.
The Company’s ability to remain competitive depends upon its continued ability to secure and protect trademarks, patents and other intellectual property rights in the U.S. and internationally for all of the Company’s lines of business.
The Company’s ability to remain competitive depends upon its continued ability to secure and protect trademarks, patents and other intellectual property rights in the U.S. and internationally.
The Company’s business could be significantly harmed if it is not able to protect its intellectual property or if a court found it to be infringing on other persons’ intellectual property rights.
The Company’s business could be significantly harmed if it is not able to protect its intellectual property or if it was found to infringe on other persons’ intellectual property rights.
If the Company 13 encounters problems affecting its distribution system, its results of operations and its ability to meet customer expectations, manage inventory, complete sales and achieve operating efficiencies could be adversely affected. The Company faces risks associated with its growth strategies including acquiring and disposing of businesses.
Problems affecting the performance of the Company's distribution system could adversely affect its results of operations and its ability to meet customer expectations, manage inventory, complete sales and achieve operating efficiencies. The Company faces risks associated with its growth strategies including acquiring and disposing of businesses.
Item 1A. Risk Factors Business and Operational Risks The Company’s operating results could be adversely affected if it is unable to maintain its brands’ positive images with consumers or anticipate, understand and respond to changing footwear and apparel trends and consumer preferences.
Item 1A. Risk Factors Business and Operational Risks The Company’s operating results could be adversely affected if it is unable to maintain its brands’ positive images with consumers or anticipate, understand and respond to changing footwear and apparel trends and consumer preferences. The popularity of particular designs and categories of footwear and apparel, with consumers generally changes over time.
The Company’s ability to hire and retain qualified personnel may be affected by a number of factors, including: the ability to attract and motivate employees; the competition the Company faces from other companies in hiring and retaining qualified personnel; and the Company’s ability to offer employees remote work opportunities.
The Company’s ability to hire and retain qualified personnel may be affected by a number of factors, including: its ability to attract and motivate employees; competition from other companies for qualified personnel; and the Company’s ability to offer employees remote work opportunities.
These provisions could also discourage proxy contests and make it more difficult for stockholders to replace the majority of the Company's directors and take other corporate actions that may be beneficial to the Company’s stockholders.
These provisions could also discourage proxy contests and make it more difficult for stockholders to replace the majority of the Company's directors and take other corporate actions that may be beneficial to the Company’s stockholders. 19 Item 1B. Unresolved Staff Comments None.
These agreements also expire by their terms and as the agreements expire, the Company may be forced to stop selling the related products. Expiration or early termination by the licensor of any of these license agreements could have an adverse effect on the Company’s business, results of operations and financial position.
As these agreements end, whether expired by their terms or terminated early for breach, the Company may be forced to stop selling the related products. Expiration or termination of any of these license agreements could have an adverse effect on the Company’s business, results of operations and financial position.
These provisions are intended to provide the Company’s Board of Directors with continuity and also serve to encourage negotiations between the Company’s Board of Directors and any potential acquirer. Such provisions include a Board of Directors that is classified so that only one-third of directors stand for election each year.
These provisions are intended to provide the Company’s Board of Directors with continuity and to encourage negotiations between the Company’s Board and any potential acquirer. Such provisions include a classified Board of Directors under which one-third of the directors stand for election each year.
Changes in general economic conditions and/or the credit markets affecting the Company's distributors, suppliers and retailers could adversely affect the Company’s results of operations and financial position. Changes in general economic conditions and/or the credit markets could have an adverse impact on the Company’s future results of operations and financial position.
Changes in general economic conditions and/or the credit markets affecting the Company's distributors, suppliers and retailers could adversely affect the Company’s results of operations and financial position.
The Company’s results of operations depend on factors affecting consumer disposable income and spending patterns. These factors include general economic conditions, employment rates, business conditions, interest rates and tax policy in each of the markets and regions in which the Company or its third-party distributors and licensees operates.
The Company’s results of operations depend on factors affecting consumer disposable income and spending patterns such as general economic conditions, inflation, employment rates, credit availability, business conditions, interest rates, consumer 14 confidence and tax policy in the markets and regions in which the Company or its third-party distributors and licensees operates.
For a more detailed discussion of the risks related to foreign currency exchange rate fluctuations, see Item 7A: “Quantitative and Qualitative Disclosures About Market Risk.” In addition, the Company's foreign subsidiaries purchase products in U.S. dollars and the cost of those products will vary depending on the applicable foreign currency exchange rate, which will impact the price charged to customers.
For a more detailed discussion of the risks related to foreign currency exchange rate fluctuations, see Item 7A: “Quantitative and Qualitative Disclosures About Market Risk.” The Company's foreign subsidiaries and foreign distributors purchase Company products in U.S. dollars and the cost of those products varies depending on the applicable foreign currency exchange rate.
The Company is also subject to general political and economic risks in connection with its international operations, including: • political instability, war and terrorist attacks; • differences in business culture; • different laws governing relationships with employees and business partners; • changes in diplomatic and trade relationships, including with China; and • general economic fluctuations in specific countries or markets.
The Company is also subject to general social, political and economic risks in connection with its international operations, including: • social and political instability, war and terrorist attacks; • differences in business culture and laws governing relationships with employees and business partners; • changes in diplomatic and trade relationships, including with China, Canada, Mexico and other U.S. trading partners; and 13 • changes in general economic conditions in specific countries or markets.
Acquisitions may also cause the Company to incur debt or result in dilutive issuances of its equity securities, write-offs of goodwill and substantial amortization expenses associated with other intangible assets. The Company may not be able to obtain financing for future acquisitions on favorable terms, making any such acquisitions more expensive.
Acquisitions may cause the Company to incur debt or result in dilutive issuances of its equity securities, write-offs of goodwill and substantial amortization expenses associated with other intangible assets. If financing for future acquisitions is not available on favorable terms, such acquisitions would be more expensive. Any such financing may have terms that restrict the Company’s operations.
The protection of the Company’s customer, associate and Company data is critically important to the Company. The Company relies on its networks, databases, systems and processes, as well as those of third parties such as vendors, to protect its proprietary information and information about its customers, employees and vendors.
The Company relies on its networks, databases, systems and processes, as well as those of third parties such as vendors, to protect its proprietary information and information about its customers, employees and vendors.
The success of its direct-to-consumer operations also depends on the Company’s ability to identify and adapt to changes in consumer spending patterns and retail shopping preferences, including the shift from brick and mortar to eCommerce and mobile channels, reductions in mall traffic and the Company’s ability to effectively develop its eCommerce and mobile channels.
The success of its direct-to-consumer operations also depends on the Company’s ability to identify and adapt to changes in consumer spending patterns and retail shopping preferences, including the shift from brick and mortar to eCommerce and mobile channels and the continuing evolution of omni-channel retailing.
Changes in regulatory, geopolitical, social or economic policies and other factors may have an adverse effect on the Company’s business in the future or may require the Company to exit a particular market or significantly modify the Company's current business practices. Foreign currency exchange rate fluctuations could adversely impact the Company’s business.
Changes in regulatory, geopolitical, social or economic policies and other factors may have an adverse effect on the Company’s business or require the Company to exit a particular market or significantly modify its current business practices.
Acquisitions involve numerous risks, including risks inherent in entering new markets in which the Company may not have prior experience; potential loss of significant customers or key personnel of the acquired business; not obtaining the expected benefits of the acquisition on a timely basis or at all; managing geographically-remote operations; and potential diversion of management’s attention from other aspects of the Company’s business operations.
Acquisitions involve numerous risks, including risks inherent in entering markets in which the Company may not have prior experience; potential loss of an acquired business's significant customers or key personnel; managing geographically-remote operations; and potential diversion of management’s attention from other aspects of the Company’s business.
The Company may seek to mitigate the negative impacts of foreign currency exchange rate fluctuations through price increases and further actions to reduce costs, but the Company may not be able to fully offset the impact, if at all.
The Company may seek to mitigate the negative impacts of foreign currency exchange rate fluctuations through price increases and further actions to reduce costs, but the Company may not be able to fully offset the impact, if at all. The Company’s success depends, in part, on its ability to manage these various foreign currency impacts.
The Company collects, maintains and uses data provided to it through its online activities and other consumer interactions in its business.
The Company collects, maintains and uses data it receives through online activities and other consumer interactions in its business, including its marketing programs.
Outbreaks of disease, and actions taken in response to an outbreak, have in the past materially negatively impacted, and could in the future materially negatively impact, the Company's workforce as well as its business, operations, and financial results in many ways, both directly and indirectly.
Outbreaks of disease and actions taken in response, have in the past materially negatively impacted, and could in the future materially negatively impact, the Company's workforce, business, operations, and financial results in many ways.
Foreign manufacturing is subject to a number of risks, including work stoppages, transportation delays and interruptions, political instability, foreign currency exchange rate fluctuations, changing economic conditions, expropriation, nationalization, the imposition of tariffs, import and export controls and other non-tariff barriers and changes in governmental policies.
Foreign manufacturing is subject to a number of risks, including work stoppages, transportation delays and interruptions, political instability, foreign currency exchange rate fluctuations, changing economic conditions, expropriation, nationalization, the imposition of tariffs, including recent U.S. tariffs imposed or threatened to be imposed on other countries and any retaliatory actions taken by such countries, import and export controls and other non-tariff barriers and changes in governmental policies.
The failure to successfully integrate newly acquired businesses or achieve the expected benefits of strategic acquisitions in the future, or consummate a potential acquisition after incurring material costs, could have an adverse effect on the Company’s business, results of operations and financial position.
The failure to achieve the expected benefits of strategic acquisitions in the future, or consummate a potential acquisition after incurring material costs, could have an adverse effect on the Company’s business, results of operations and financial position. From time to time, the Company may seek to sell one or more businesses, or sell or license one or more brands.
Such adverse effects, as well as other factors, may cause stockholders to take actions to involve themselves in the strategic direction and governance of the Company, including through private engagement, publicity campaigns, stockholder proposals and proxy contests.
Decreases in the trading price of the Company's stock may adversely affect its stockholders' returns. Such adverse effects, as well as other factors, may cause stockholders to take actions to involve themselves in the strategic direction and governance, including through private engagement, public campaigns, stockholder proposals and proxy contests.
The Company’s business interruption insurance may not adequately protect the Company from the adverse effects that could be caused by significant disruptions affecting its distribution facilities, such as the long-term loss of customers or an erosion of brand image.
The Company’s business interruption insurance may not adequately protect the Company from the adverse effects of significant disruptions of distribution activities, such as the loss of customers or an erosion of brand image.
As a result of these specific and other general factors, the Company’s operating results will vary from quarter to quarter and the results for any particular quarter may not be indicative of results for the full year. In addition, various securities analysts follow the Company’s financial results and issue reports.
As a result of these and other factors, the Company’s operating results will vary from quarter to quarter and the results for any particular quarter may not be indicative of results for the full year.
The Company may incur investigation, remediation or other costs related to releases of hazardous materials or other environmental conditions at its currently or formerly owned or operated properties, regardless of whether such environmental conditions were created by the Company or a third-party, such as a prior owner or tenant.
The Company may incur investigation, remediation or other costs related to releases of hazardous materials or other environmental conditions at its currently or formerly owned or operated properties, regardless of whether such environmental conditions were created by the Company or a third-party. The Company has incurred, and continues to incur, costs to address soil and groundwater contamination at some locations.
In addition, changes in the channels of distribution, such as the continued growth of eCommerce and related competitive pressures, and the sale of private label products by major retailers, could have an adverse effect on the Company’s results of operations and financial position. 12 The Company’s direct-to-consumer operations continue to require substantial investment and commitment of resources and are subject to numerous risks and uncertainties.
In addition, changes in distribution channels, such as the continued growth of eCommerce and related competitive pressures, and the sale of private label products by major retailers, could have an adverse effect on the Company’s results of operations and financial position.
Many of the Company’s competitors have greater resources and larger customer and consumer bases, are able, or elect, to sell their products at lower prices, or have greater financial, technical or marketing resources than the Company, particularly its competitors in the apparel and direct-to-consumer businesses.
Many have larger customer and consumer bases, and/or greater financial, technical or marketing resources than the Company, particularly its competitors in the apparel and direct-to-consumer businesses.
In addition, commercial laws in these areas may not be well developed or consistently administered, and new unfavorable laws may be retroactively applied. Any of these risks could have an adverse impact on the Company’s prospects and results of operations in these areas. Financial Risks The Company’s operating results depend on effectively managing inventory levels.
Commercial laws in these areas may not be well developed or consistently administered, and new unfavorable laws may be retroactively applied. Any of these risks could have an adverse impact on the Company’s prospects and results of operations in these areas. Foreign currency exchange rate fluctuations could adversely impact the Company’s business.
Because the Company processes and transmits payment card information, the Company is subject to the Payment Card Industry (“PCI”) Data Security Standard (the “Standard”), and card brand operating rules (“Card Rules”).
Because the Company processes and transmits payment card information, the Company is subject to card brand operating rules (“Card Rules”) requiring it to comply with the Payment Card Industry (“PCI”) Data Security Standard (the “Standard”). The Standard is a comprehensive set of requirements relating to payment account data security.
If the Company encounters problems affecting its logistics and distribution systems, its ability to deliver its products to the market could be adversely affected. The Company relies on owned or independently operated distribution facilities to transport, warehouse and ship products to its customers.
Additionally, the Company may be adversely affected if it is unable to improve, upgrade, maintain, and expand its technology systems. Problems affecting the Company's logistics and distribution systems could adversely affect its ability to deliver its products to the market. The Company relies on owned and independently operated distribution facilities to transport, warehouse and ship products to its customers.
The Company’s and its vendors’ databases containing personal information and payment card data of the Company’s customers, employees and other third parties could be breached, which could subject the Company to adverse publicity, litigation, fines and expenses. If the Company is unable to comply with bank and payment card industry standards, its operations could be adversely affected.
The Company’s and its vendors’ databases containing personal information and payment card data of the Company’s customers, employees and other third parties could be breached, which could subject the Company to adverse publicity, litigation, fines and expenses. The protection of the Company’s customer, associate and Company data is critically important.
Due to the high fixed-cost structure associated with the Company’s brick and mortar direct-to-consumer operations, a decline in sales or the closure or poor performance of individual or multiple stores could result in significant lease termination costs, write-offs of equipment and leasehold improvements and employee-related costs.
The Company also has substantial operating lease commitments for retail space. Due to the high fixed-cost structure of the Company’s brick and mortar direct-to-consumer operations, the closure or poor performance of any stores could result in significant lease termination costs, write-offs of equipment and leasehold improvements and employee-related costs.
If unauthorized parties gain access to these networks or databases, they may be able to steal, publish, delete or modify the Company’s private and sensitive third-party or employee information.
If unauthorized parties gain access to the Company's networks or databases, they may be able to steal, publish, delete or modify the Company’s private and sensitive third-party or employee information. Improper activities may result in compromise or breach of the Company’s networks, payment card terminals or other payment systems.
Provisions of Delaware law and the Company’s certificate of incorporation and bylaws could prevent or delay a change in control or change in management that could be beneficial to the Company’s stockholders.
In addition, the Company may have to devote substantial resources and executive time to the defense of such proceedings. Provisions of Delaware law and the Company’s certificate of incorporation and bylaws could prevent or delay a change in control or change in management that could be beneficial to the Company’s stockholders.
The Company’s ability to import products in a timely and cost-effective manner may also be affected by conditions at ports or issues that otherwise affect transportation and warehousing providers, such as fluctuations in freight costs, port and shipping capacity, labor disputes or severe weather due to climate change.
Any of these events could adversely effect the Company’s business, results of operations and financial position. The Company’s ability to import products in a timely and cost-effective manner may also be affected by issues that affect transportation and warehousing providers, such as fluctuations in freight costs, port and shipping capacity, labor disputes or severe weather.
If an audit, self-assessment or other test 20 determines that the Company needs to take steps to remediate any deficiencies, the Company may be required to undertake remediation efforts, which may be costly or could result in periods of time during which the Company cannot accept payment cards.
The results of any audit, self-assessment or other test may require the Company to undertake remediation efforts, which may be costly or result in periods of time during which the Company cannot accept payment cards.
A decline in disposable income and consumer spending has adversely affected demand for the Company’s products, and could further adversely affect demand and Company's results of operations. If the Company reduces the prices of its products, offers additional promotions or increases marketing efforts due to decreases in consumer spending, the Company's profitability could decline.
If the Company reduces the prices of its products, offers additional promotions or increases marketing efforts due to decreases in consumer spending, the Company's profitability could decline.
Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to the Company’s environmental, social and governance (“ESG”) practices may impose additional costs on the Company or expose it to new or additional risks.
Increases in the Company’s overall employment and pension costs could have an adverse effect on the Company’s business, results of operations and financial position. 17 Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to the Company’s environmental, social and governance (“ESG”) practices may impose additional costs on the Company or expose it to new or additional risks.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Company has protocols by which certain cybersecurity incidents that meet established reporting thresholds are escalated within the Company and, where appropriate, reported promptly to the Board and Audit Committee, as well as ongoing updates regarding any such incident until it has been addressed. 21 Management At the management level, the CISO, who has extensive cybersecurity knowledge and skills gained from over 16 years of work experience at the Company and elsewhere, heads the cross-functional team responsible for implementing, monitoring, and maintaining cybersecurity and data protection practices across the business and reports directly to the CIO, who reports directly to the Chief Executive Officer.
Biggest changeManagement At the management level, the CISO, who has extensive cybersecurity knowledge and skills gained from over 16 years of work experience at the Company and elsewhere, heads the cross-functional team responsible for implementing, monitoring, and maintaining cybersecurity and data protection practices across the business and reports directly to the CIO, who reports directly to the Chief Executive Officer.
Over the past two years, the Company has implemented multiple new security tools designed to provide visibility and controls allowing the cybersecurity team to safeguard data against theft or loss. The Company maintains various role-based access controls to safeguard data and systems. Data center assets are protected and monitored by badged key systems and video surveillance.
Over the past two years, the Company has 20 implemented multiple new security tools designed to provide visibility and controls allowing the cybersecurity team to safeguard data against theft or loss. The Company maintains various role-based access controls to safeguard data and systems. Data center assets are protected and monitored by badged key systems and video surveillance.
Material Cybersecurity Risks, Threats & Incidents 22 The Company relies on information technology and third party vendors to support its operations, including its secure processing of personal, confidential, sensitive, proprietary and other types of information.
Material Cybersecurity Risks, Threats & Incidents The Company relies on information technology and third-party vendors to support its operations, including its secure processing of personal, confidential, sensitive, proprietary and other types of information.
The CISO works closely with the legal team to oversee compliance with legal, regulatory and contractual security requirements. Internal Cybersecurity Team The Internal Cybersecurity Team, led by the CISO, is responsible for the implementation, monitoring, and maintenance of the cybersecurity and data protection practices across the Company.
The CISO collaborates closely with the legal team to oversee compliance with legal, regulatory and contractual security requirements. Internal Cybersecurity Team The Internal Cybersecurity Team, led by the CISO, is responsible for the implementation, monitoring, and maintenance of the cybersecurity and data protection practices across the Company.
The Company maintains a Privacy Policy that describes the personal information that it collects about its customers, including how the Company may use such information and when it shares such information with third parties. The Company conducts annual cyber-risk mitigation exercises including awareness outreach, annual IT Security Awareness training, monthly phishing tests, and a variety of ongoing vulnerability scans.
The Company maintains a Privacy Policy that describes the personal information that it collects about its customers, including how the Company may use such information and when it shares such information with third parties. The Company conducts annual cyber-risk mitigation exercises including awareness outreach, annual IT Security Awareness training, periodic phishing simulations, and a variety of ongoing vulnerability scans.
Removed
Access is periodically reviewed and updated. In addition, an external consultant in conjunction with the Company conducted a cybersecurity gap assessment in November 2023 to review and confirm that the Company has appropriate measures in place to assess, identify and manage cybersecurity risks, and the Company is implementing the recommendations made as a result of the gap assessment.
Added
The Company has protocols by which certain cybersecurity incidents that meet established reporting thresholds are escalated to management and, where appropriate, reported promptly to the Board and Audit Committee, as well as ongoing updates regarding any such incident until it has been addressed.
Removed
The cybersecurity, legal, and Executive Leadership teams also participated in a data security incident tabletop exercise in December 2023 to simulate responses to a ransomware attack and use the findings to improve the Company’s processes and technologies.
Added
Access is periodically reviewed and updated. The Company measures its security posture through several third-party score-based cybersecurity tools. Scores from these tools are reviewed weekly and measure the Company's posture regarding securing applications, infrastructure, data and other assets from theft or loss, both internally and externally. Thresholds are in place for escalation to management.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties The Company operates its domestic administration, sales and marketing operations primarily from an owned facility of approximately 307,000 square feet in Rockford, Michigan, as well as leased facilities of approximately 84,700 square feet in Waltham, Massachusetts and 80,000 square feet in the United Kingdom.
Biggest changeProperties The Company operates its domestic administration, sales and marketing operations primarily from an owned facility of approximately 307,000 square feet in Rockford, Michigan; a leased facility of approximately 117,000 square feet in Rockford, Michigan; a leased facility of approximately 11,000 square feet in Boston, Massachusetts and a leased facility of approximately 32,000 square feet in the United Kingdom.
The Company also leases or owns offices, showrooms and other facilities throughout the U.S., Canada, the United Kingdom, continental Europe, Hong Kong and China to meet its operational requirements. In addition, the Company operates 166 retail stores primarily through leases with various third-party landlords in the U.S., United Kingdom, and Canada that collectively occupy approximately 388,000 square feet.
The Company also leases offices, showrooms and other facilities throughout the U.S., Canada, the United Kingdom, continental Europe, Hong Kong and China to meet its operational requirements. In addition, the Company operates 119 retail stores primarily through leases with various third-party landlords in the U.S., United Kingdom, and Italy that collectively occupy approximately 260,000 square feet.
The Company operates its distribution operations primarily through a leased distribution facility of approximately 720,000 square feet in Beaumont, California; a leased distribution facility of approximately 520,000 square feet in Louisville, Kentucky; a leased distribution center of approximately 468,000 square feet in Howard City, Michigan; a leased distribution center of approximately 242,000 square feet in Ontario, Canada and a leased distribution center of approximately 125,000 square feet in Heerhugowaard, Netherlands.
The Company operates its distribution operations primarily through a leased distribution facility of approximately 720,000 square feet in Beaumont, California; a leased distribution center of approximately 468,000 square feet in Howard City, Michigan; a leased distribution center of approximately 215,000 square feet in Ontario, Canada and a leased distribution center of approximately 125,000 square feet in Heerhugowaard, Netherlands.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeRasch has served the Company as Senior Vice President, General Counsel and Secretary since January 2023. From May 2021 through November 2022, he was the Chief Legal Officer and Corporate Secretary of Party City Holdco Inc., a publicly traded party goods company. Mr.
Biggest changeFrom February 2015 to September 2021 he served as Associate General Counsel and Assistant Secretary. Taryn Miller has served the Company as Chief Financial Officer and Treasurer since May 2024. From October 2022 through October 2023, she was the Vice President, Corporate and Commercial Finance for Corteva Inc., a publicly traded agricultural chemical and seed company.
Item 4. Mine Safety Disclosures Not applicable. Supplemental Item. Information about our Executive Officers The following table lists the names and ages of the Executive Officers of the Company and their positions held with the Company as of January 31, 2024.
Item 4. Mine Safety Disclosures Not applicable. Supplemental Item. Information about our Executive Officers The following table lists the names and ages of the Executive Officers of the Company and their positions held with the Company as of January 31, 2025.
From January 2013 through July 2018, he served as Senior Vice President and Head of Corporate Strategy. Amy M. Klimek has served the Company as Executive Vice President, Global Human Resources since May 2016. From October 2014 to May 2016, she served as Vice President of Human Resources. Reginald M.
From January 2013 through July 2018, he served as Senior Vice President and Head of Corporate Strategy. Amy M. Klimek has served the Company as Chief Human Resources Officer since January 2024, and Executive Vice President, Global Human Resources since May 2016. From October 2014 to May 2016, she served as Vice President of Human Resources. Susan J.
The information provided below the table lists the business experience of each such Executive Officer for at least the past five years. All Executive Officers serve at the pleasure of the Board of Directors of the Company, or, if not appointed by the Board of Directors, at the pleasure of management. Name Age Positions held with the Company Christopher E.
The information provided below the table lists the business experience of each such 21 Executive Officer for at least the past five years. All Executive Officers serve at the pleasure of the Board of Directors of the Company, or, if not appointed by the Board of Directors, at the pleasure of management.
From April 2014 to June 2018, she served as Vice President and General Manager for Vans, Timberland and Kipling in South America at VF Corporation, a publicly traded footwear and apparel retailer. Michael D. Stornant has served the Company as Executive Vice President, Chief Financial Officer and Treasurer since June 2015.
From April 2014 to June 2018, she served as Vice President and General Manager for Vans, Timberland and Kipling in South America at VF Corporation, a publicly traded footwear and apparel retailer. PART II
Rasch was employed by Rakuten, a global technology conglomerate, from 2005 to May 2021, where he was the Rakuten Americas Head of Legal and Secretary from 2016 to May 2021. 23 Isabel Soriano has served the Company as President, International since June 2021. From June 2018 to May 2021, she served as Vice President and Managing Director of EMEA.
From April 2017 through October 2022, she was the Chief Financial Officer, Global Business Units, Enterprise FP&A and Investor Relations for Kimberly-Clark Corporation, a publicly traded consumer goods and personal care company. Isabel Soriano has served the Company as President, International since June 2021. From June 2018 to May 2021, she served as Vice President and Managing Director of EMEA.
Removed
Hufnagel 51 President and Chief Executive Officer Amy M. Klimek 50 Executive Vice President, Global Human Resources Reginald M. Rasch 53 Senior Vice President, General Counsel and Secretary Isabel Soriano 53 President, International Michael D. Stornant 57 Executive Vice President, Chief Financial Officer and Treasurer James D. Zwiers 56 Executive Vice President and President, Global Operations Group Christopher E.
Added
Name Age Positions held with the Company Christopher E. Hufnagel 52 President and Chief Executive Officer Amy M. Klimek 51 Chief Human Resources Officer Susan J. Kuhn 49 President Active Group David A. Latchana 47 Chief Legal Officer and Corporate Secretary Taryn L. Miller 52 Chief Financial Officer and Treasurer Isabel Soriano 54 President, International Christopher E.
Removed
From January 2013 through June 2015, he served as Vice President, Corporate Finance. James D. Zwiers has served the Company as Executive Vice President since February 2017 and President, Global Operations Group since January 2021. From February 2016 through February 2017, he served as President, Wolverine Outdoor & Lifestyle Group.
Added
Kuhn has served the Company as President, Active Group since October 2024. From January 2020 through April 2023, she was the President and General Manager for Europe, Middle East and Africa for Foot Locker BV, a subsidiary of Foot Locker, Inc., a footwear and apparel retailer. David A.
Removed
From June 2014 through February 2016, he served as Senior Vice President and President, International Group . PART II
Added
Latchana has served the Company as Chief Legal Officer and Secretary since April 2024, and served as Vice President, Interim General Counsel and Secretary from January 2024 through April 2024. From September 2021 through January 2024, he served as Vice President, Executive Compensation, Benefits and Communications.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Amount that May Yet Be Purchased Under the Plans or Programs Period 10 (October 1, 2023 to November 4, 2023) Common Stock Repurchase Program (1) — $ — — $ — Employee Transactions (2) 2,269 $ 7.93 Period 11 (November 5, 2023 to December 2, 2023) Common Stock Repurchase Program (1) — $ — — $ — Employee Transactions (2) 3,897 $ 8.40 Period 12 (December 3, 2023 to December 30, 2023) Common Stock Repurchase Program (1) — $ — — $ — Employee Transactions (2) — $ — Total for the Fourth Quarter Ended December 30, 2023 Common Stock Repurchase Program (1) — $ — — $ — Employee Transactions (2) 6,166 $ 8.22 (1) On September 11, 2019, the Company’s Board of Directors approved a common stock repurchase program that authorized the repurchase of $400.0 million of common stock over a four-year period, incremental to the $113.4 million available as of that date for repurchases under the previous program.
Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Amount that May Yet Be Purchased Under the Plans or Programs Period 10 (September 29, 2024 to November 2, 2024) Common Stock Repurchase Program (1) — $ — — $ 150,000,000 Employee Transactions (2) 37,162 $ 15.69 Period 11 (November 3, 2024 to November 30, 2024) Common Stock Repurchase Program (1) — $ — — $ 150,000,000 Employee Transactions (2) 5,252 $ 23.40 Period 12 (December 1, 2024 to December 28, 2024) Common Stock Repurchase Program (1) — $ — — $ 150,000,000 Employee Transactions (2) — $ — Total for the Fourth Quarter Ended December 28, 2024 Common Stock Repurchase Program (1) — $ — — $ 150,000,000 Employee Transactions (2) 42,414 $ 16.65 (1) On March 7, 2024, the Company’s Board of Directors approved a common stock repurchase program that authorized the repurchase of $150.0 million of common stock over a three-year period.
The Company’s employee stock compensation plans provide that the shares delivered or attested to, or withheld, shall be valued at the closing price of the Company’s common stock on the date the relevant transaction occurs. Item 6. Reserved
The Company’s employee stock compensation plans provide that the shares delivered or attested to, or withheld, shall be valued at the closing price of the Company’s common stock on the date the relevant transaction occurs. 23 Item 6. Reserved
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is traded on the New York Stock Exchange under the symbol “WWW.” The number of stockholders of record on February 9, 2024, was 654. A quarterly dividend of $0.10 per share was declared on February 7, 2024.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is traded on the New York Stock Exchange under the symbol “WWW.” The number of stockholders of record on February 7, 2025, was 629. A quarterly dividend of $0.10 per share was declared on February 5, 2025.
The Company currently expects that comparable cash dividends will be paid in future quarters in fiscal 2024.
The Company currently expects that comparable cash dividends will be paid in future quarters in fiscal 2025.
Stock Performance Graph The following graph compares the five-year cumulative total stockholder return on the Company’s common stock to the Standard & Poor’s 1500 Index and the Standard & Poor’s 1500 Consumer Durables & Apparel Index, assuming an investment of $100 at the beginning of the period indicated.
Stock Performance Graph The following graph compares the five-year cumulative total stockholder return on the Company’s common stock to the S&P Composite 1500 Index and the S&P Composite1500 Consumer Durables & Apparel Index, assuming an investment of $100 at the beginning of the period indicated and reinvestment of dividends.
The Company is part of both the Standard & Poor’s 1500 Index and the Standard & Poor’s 1500 Consumer Durables & Apparel Index.
The Company is part of both the S&P 1500 Index and the S&P 1500 Consumer Durables & Apparel Index.
This Stock Performance Graph shall not be deemed to be incorporated by reference into the Company’s SEC filings and shall not constitute soliciting material or otherwise be considered filed under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
This Stock Performance Graph shall not be deemed to be incorporated by reference into the Company’s SEC filings and shall not constitute soliciting material or otherwise be considered filed under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. 22 Five-Year Cumulative Total Return Summary The following table provides information regarding the Company’s purchases of its own common stock during the fourth quarter of fiscal 2024.
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Five-Year Cumulative Total Return Summary 24 The following table provides information regarding the Company’s purchases of its own common stock during the fourth quarter of fiscal 2023.
Added
Since that date, the Company has not repurchased any common stock.
Removed
Since that date, the Company repurchased $146.9 million of common stock. The annual amount of any stock repurchases is restricted under the terms of the Company's amended senior credit facility and senior notes indenture. The common stock repurchase program expired on September 11, 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe decrease was driven by lower impairment of long-lived assets ($243.4 million), the gain on the sale of businesses, trademarks, and long-lived assets ($90.4 million), lower advertising costs ($51.4 million), lower environmental and other related costs, net of recoveries ($44.1 million), lower incentive compensation costs ($22.1 million), lower selling costs ($9.6 million), lower product development costs ($4.8 million), lower distribution costs ($4.7 million), and lower Sweaty Betty ® integration costs ($2.0 million), partially offest by the prior year gain recorded on the sale of the Champion trademarks for footwear in the United States and Canada ($90.0 million), higher reorganization costs ($36.8 million), higher divestiture costs ($5.1 million), and higher general and administrative costs ($2.1 million).
Biggest changeThe decrease was primarily driven by lower impairment of long-lived assets ($176.3 million), lower general and administrative costs ($48.8 million), lower selling costs ($45.2 million), lower advertising costs ($28.9 million), lower distribution costs ($25.5 million), lower reorganization costs ($18.0 million), and lower product development costs ($7.8 million), partially offset by lower gains on the sale of businesses, trademarks, and long-lived assets ($81.8 million), higher incentive compensation costs ($12.9 million) and lower environmental and other related costs, net of recoveries ($0.1 million).
The Company also reports “Other” and “Corporate” categories. The Other category consists of Sperry ® footwear, Keds ® footwear, Hush Puppies ® footwear and apparel, the Company’s leather marketing operations, sourcing operations that include third-party commission revenues, multi-branded direct-to-consumer retail stores and the Stride Rite ® licensed business.
The Company also reports “Other” and “Corporate” categories. The Other category consists of Hush Puppies ® footwear, sourcing operations that include third-party commission revenues, multi-branded direct-to-consumer retail stores, the Stride Rite ® licensed business, Sperry ® footwear, Keds ® footwear, and apparel and the Company’s leather marketing operations,.
REPORTABLE SEGMENTS The Company’s portfolio of brands are organized into the following reportable segments. • Active Group, consisting of Merrell ® footwear and apparel, Saucony ® footwear and apparel, Sweaty Betty ® activewear, and Chaco ® footwear; • Work Group, consisting of Wolverine ® footwear and apparel, Cat ® footwear, Bates ® uniform footwear, Harley-Davidson ® footwear and HYTEST ® safety footwear; Kids' footwear offerings from Saucony ® , Sperry ® , Keds ® , Merrell ® , Hush Puppies ® and Cat ® are included with the applicable brand.
REPORTABLE SEGMENTS The Company’s portfolio of brands is organized into the following reportable segments. • Active Group, consisting of Merrell ® footwear and apparel, Saucony ® footwear and apparel, Sweaty Betty ® activewear, and Chaco ® footwear; and • Work Group, consisting of Wolverine ® footwear and apparel, Cat ® footwear, Bates ® uniform footwear, Harley-Davidson ® footwear and HYTEST ® safety footwear; Kids' footwear offerings from Saucony ® , Sperry ® , Keds ® , Merrell ® , Hush Puppies ® and Cat ® are included with the applicable brand.
Goodwill and Indefinite-Lived Intangibles Goodwill and intangible assets deemed to have indefinite lives are not amortized, but are subject to impairment tests at least annually. The Company reviews the carrying amounts of goodwill and indefinite-lived intangible assets by reporting unit at least annually, or when indicators of impairment are present, to determine if such assets may be impaired.
Goodwill and Indefinite-Lived Intangible Assets Goodwill and intangible assets deemed to have indefinite lives are not amortized, but are subject to impairment tests at least annually. The Company reviews the carrying amounts of goodwill and indefinite-lived intangible assets by reporting unit at least annually, or when indicators of impairment are present, to determine if such assets may be impaired.
The Company evaluates the probability a tax position will be effectively sustained and the appropriateness of the amount recognized for uncertain tax positions based on 34 factors including changes in facts or circumstances, changes in tax law, settled audit issues and new audit activity.
The Company evaluates the probability a tax position will be effectively sustained and the appropriateness of the amount recognized for uncertain tax positions based on factors including changes in facts or circumstances, changes in tax law, settled audit issues and new audit activity.
If these assumptions change, the Company may be required to record valuation allowances against its gross deferred tax assets in future years, which would cause the Company to record additional income tax expense in its consolidated statements of operations.
If these assumptions change, the 32 Company may be required to record valuation allowances against its gross deferred tax assets in future years, which would cause the Company to record additional income tax expense in its consolidated statements of operations.
A discussion of a comparison of the Company's results of operations and liquidity and capital resources for fiscal 2022 and 2021 has been omitted from this Form 10-K but may be found in Item 7.
A discussion of a comparison of the Company's results of operations and liquidity and capital resources for fiscal 2023 and 2022 has been omitted from this Form 10-K but may be found in Item 7.
The Revolving Facility allows the Company to borrow up to an aggregate amount of $1.0 billion. The Company’s $550.0 million 4.0% senior notes issued on August 26, 2021 are due on August 15, 2029. Related interest payments are due semi-annually. The senior notes are guaranteed by substantially all of the Company’s domestic subsidiaries.
The Revolving Facility allows the Company to borrow up to an aggregate amount of $800.0 million. The Company’s $550.0 million 4.0% senior notes issued on August 26, 2021 are due on August 15, 2029. Related interest payments are due semi-annually. The senior notes are guaranteed by substantially all of the Company’s domestic subsidiaries.
Control of the Company's goods and services, and associated revenue, are transferred to customers at a point in time. The Company’s contract revenue consist of wholesale revenue and direct-to-consumer revenue. Wholesale revenue is recognized for products sourced by the Company when control transfers to the customer generally occurring upon the purchase, shipment or delivery of branded products to the customer.
Control of the Company's goods and services, and associated revenue, are transferred to customers at a point in time. The Company’s contract revenue consists of wholesale revenue and direct-to-consumer revenue. Wholesale revenue is recognized for products sourced by the Company when control transfers to the customer generally occurring upon the shipment or delivery of branded products to the customer.
Overall, these reserves reflect the Company’s best estimates of the amount of consideration to 32 which it is entitled based on the terms of the respective underlying contracts. Revenue recognized during the year ended December 30, 2023 related to the Company’s contract liabilities was nominal. Inventory The Company values its inventory at the lower of cost or net realizable value.
Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the respective underlying contracts. Revenue recognized during the year ended December 28, 2024 related to the Company’s contract liabilities was nominal. 30 Inventory The Company values its inventory at the lower of cost or net realizable value.
Estimated future interest payments on outstanding debt obligations are based on interest rates as of December 30, 2023. Actual cash outflows may differ significantly due to changes in underlying interest rates. (2) Purchase obligations related primarily to inventory and capital expenditure commitments.
Estimated future interest payments on outstanding debt obligations are based on interest rates as of December 28, 2024. Actual cash outflows may differ significantly due to changes in underlying interest rates. (2) Purchase obligations related primarily to inventory and capital expenditure commitments.
Pension expense is also impacted by the expected long-term rate of return on plan assets, which the Company has determined to be 6.88% and 6.87% for fiscal 2023 and 2022, respectively.
Pension expense is also impacted by the expected long-term rate of return on plan assets, which the Company has determined to be 6.96% and 6.88% for fiscal 2024 and 2023, respectively.
The Company’s brands are marketed in approximately 170 countries and territories at December 30, 2023, including through owned operations in the U.S., Canada, the United Kingdom and certain countries in continental Europe and Asia Pacific.
The Company’s brands are marketed in approximately 170 countries and territories at December 28, 2024, including through owned operations in the U.S., Canada, the United Kingdom and certain countries in continental Europe and Asia Pacific.
(4) The total amount of unrecognized tax benefits on the consolidated balance sheet at December 30, 2023 is $2.6 million. At this time, the Company is unable to make a reasonably reliable estimate of the timing of payments in individual years beyond 12 months due to uncertainties in the timing of tax audit outcomes.
(4) The total amount of unrecognized tax benefits on the consolidated balance sheet at December 28, 2024 is $1.6 million. At this time, the Company is unable to make a reasonably reliable estimate of the timing of payments in individual years beyond 12 months due to uncertainties in the timing of tax audit outcomes.
As of December 30, 2023, the Company was in compliance with all covenants and performance ratios under the Credit Agreement. The Company’s debt at December 30, 2023 totaled $920.8 million, compared to $1,158.0 million at December 31, 2022. The Company expects to use the current borrowings to fund organic growth initiatives, pay dividends and for general corporate purposes.
As of December 28, 2024, the Company was in compliance with all covenants and performance ratios under the Credit Agreement. The Company’s debt at December 28, 2024 totaled $648.0 million, compared to $920.8 million at December 30, 2023. The Company expects to use the current borrowings to fund organic growth initiatives, pay dividends and for general corporate purposes.
Environmental The Company establishes a reserve for estimated environmental remediation costs based upon the evaluation of currently-available facts with respect to each individual affected site.
The Company has established a reserve for estimated environmental remediation costs based upon an evaluation of currently available facts with respect to each individual affected site.
During 2023 and 2022, the Company made payments of $6.4 million and $15.0 million towards the total cap, respectively. Due to the 30 uncertainty of the timing and amounts related to the Company's other environmental remediation costs, they have been excluded from this table. See Note 17 to the Company's Consolidated Financial Statements for additional information.
During 2024 and 2023, the Company made payments of $12.2 million and $6.4 million towards the total cap, respectively. Due to the 28 uncertainty of the timing and amounts related to the Company's other environmental remediation costs, they have been excluded from this table. See Note 17 to the Company's Consolidated Financial Statements for additional information.
The bonds selected are listed as high grade by at least two recognized ratings agency and are non-callable, currently purchasable and non-prepayable. The calculated discount rate was 5.30% at December 30, 2023, compared to 5.56% at December 31, 2022.
The bonds selected are listed as high grade by at least two recognized ratings agency and are non-callable, currently purchasable and non-prepayable. The calculated discount rate was 5.75% at December 28, 2024, compared to 5.30% at December 30, 2023.
LIQUIDITY AND CAPITAL RESOURCES Fiscal Year (In millions) 2023 2022 Cash and cash equivalents (1) $ 184.6 $ 135.5 Debt 920.8 1,158.0 Available Revolving Facility (2) 688.4 569.3 (1) Cash and cash equivalents at the end of the year in the Consolidated Statements of Cash Flows includes $5.6 million and $4.0 million of cash and cash equivalents that are classified as held for sale as of December 30, 2023 and December 31, 2022, respectively, that are not included in cash and cash equivalents in the Consolidated Balance Sheets. 29 (2) Amounts are net of both borrowings, if any, and outstanding standby letters of credit issued in accordance with the terms of the Revolving Facility.
LIQUIDITY AND CAPITAL RESOURCES Fiscal Year (In millions) 2024 2023 Cash and cash equivalents (1) $ 152.1 $ 184.6 Debt 648.0 920.8 Available Revolving Facility (2) 724.0 688.4 (1) Cash and cash equivalents at the end of the year in the Consolidated Statements of Cash Flows includes $5.6 million of cash and cash equivalents that are classified as held for sale as of December 30, 2023 that are not included in cash and cash equivalents in the Consolidated Balance Sheets. 27 (2) Amounts are net of both borrowings, if any, and outstanding standby letters of credit issued in accordance with the terms of the Revolving Facility.
In other regions (Latin America, portions of Europe and Asia Pacific, the Middle East and Africa), the Company relies on a network of third-party distributors, licensees and joint ventures. At December 30, 2023, the Company oper ated 166 retail stores in the U.S., United Kingdom, and Canada an d 56 direct-to-consumer eCommerce sites.
In other regions (Latin America, portions of Europe and Asia Pacific, the Middle East and Africa), the Company relies on a network of third-party distributors, licensees and joint ventures. At December 28, 2024, the Company oper ated 119 retail stores in the U.S., United Kingdom, and Italy an d 39 direct-to-consumer eCommerce sites.
Note 17 to the Company's Consolidated Financial Statements also includes a detailed discussion of environmental litigation matters. As of December 30, 2023, the Company had recorded liabilities of $2.7 million for certain of these environmental litigation matters which are recorded as other accrued liabilities in the consolidated condensed balance sheets.
Note 17 to the Company's Consolidated Financial Statements also includes a detailed discussion of environmental litigation matters. As of December 28, 2024, the Company had recorded liabilities of $10.1 million for certain of these environmental litigation matters which are recorded as other accrued liabilities in the consolidated balance sheets.
Cash from operations during 2023 was higher compared to 2022, due primarily to a decrease in net working capital representing a source of cash of $168.0 million.
Cash from operations during 2024 was higher compared to 2023, due primarily to a decrease in net working capital representing a source of cash of $82.6 million.
Cash Flows The following table summarizes cash flow activities: Fiscal Year Ended (In millions) December 30, 2023 December 31, 2022 Net cash provided by (used in) operating activities 121.8 (178.9) Net cash provided by investing activities 171.6 54.6 Net cash provided by (used in) financing activities (246.3) 107.1 Additions to property, plant and equipment (14.6) (36.5) Depreciation and amortization 35.1 34.6 Operating Activities The principal source of the Company’s operating cash flow is net earnings, including cash receipts from the sale of the Company’s products, net of costs of goods sold.
Cash Flows The following table summarizes cash flow activities: Fiscal Year Ended (In millions) December 28, 2024 December 30, 2023 Net cash provided by operating activities 180.1 121.8 Net cash provided by investing activities 86.8 171.6 Net cash used by financing activities (299.2) (246.3) Additions to property, plant and equipment (20.2) (14.6) Depreciation and amortization 26.2 35.1 Operating Activities The principal source of the Company’s operating cash flow is net earnings, including cash receipts from the sale of the Company’s products, net of costs of goods sold.
The Company had $688.4 million of borrowing capacity available under the Revolving Facility as of December 30, 2023. Cash and cash equivalents located in foreign jurisdictions totaled $161.8 million as of December 30, 2023. Cash flow from operating activities is expected to be sufficient to meet the Company’s working capital needs for the foreseeable future.
The Company had $724.0 million of borrowing capacity available under the Revolving Facility as of December 28, 2024. Cash and cash equivalents located in foreign jurisdictions totaled $134.1 million as of December 28, 2024. Cash flow from operating activities is expected to be sufficient to meet the Company’s working capital needs for the foreseeable future.
In the fourth quarter of 2022, after completion of the annual impairment testing, the Company recorded a $48.4 million impairment charge for Sweaty Betty ® goodwill. The Company did not recognize any impairment charges for goodwill during 2023 and 2021.
In the fourth quarter of 2022, after completion of the annual impairment testing, the Company recorded 31 a $48.4 million impairment charge for Sweaty Betty ® goodwill. The Company did not recognize any impairment charges for indefinite-lived intangible assets during 2024.
Environmental and other related costs were $8.4 million and $56.3 million in 2023 and 2022, respectively. See Note 17 to the Company's Consolidated Financial Statements for further discussion of environmental remediation costs. 27 INTEREST, OTHER AND TAXES Net interest expense was $63.5 million in 2023 compared to $47.3 million in 2022.
Environmental and other related costs were $15.6 million and $8.4 million in 2024 and 2023, respectively. See Note 17 to the Company's Consolidated Financial Statements for further discussion of environmental remediation costs. 25 INTEREST, OTHER AND TAXES Net interest expense was $42.7 million in 2024 compared to $63.5 million in 2023.
The Company paid $5.8 million and $7.7 million in 2023 and 2022, respectively, in connection with shares or units withheld to pay employee taxes related to awards under stock incentive plans. The Company received $31.2 million and $7.0 million from noncontrolling interests in 2023 and 2022, respectively.
The Company paid $2.6 million and $5.8 million in 2024 and 2023, respectively, in connection with shares or units withheld to pay employee taxes related to awards under stock incentive plans. The Company received $31.2 million from noncontrolling interests in 2023. The Company declared cash dividends of $0.40 per share in each of 2024 and 2023 .
The Work Group’s revenue decline was driven primarily by a decrease of $46.3 million from Wolverine ® , $40.2 million from Cat ® , $15.9 million from Harley-Davidson ® and $6.5 million from Bates ® .
The Work Group’s revenue decrease was driven primarily by a decrease of $9.0 million from Cat ® , $8.1 million from Wolverine ® , $3.3 million from Bates ® , $2.6 million from Harley-Davidson ® and $2.3 million from HYTEST ® .
The average cost of inventory is used for finished product inventories of the Company’s direct-to-consumer business and Sweaty Betty ® inventory. The Company has applied these inventory cost valuation methods consistently from year to year.
The average cost of inventory is used for finished product inventories of the Company’s U.S. retail store business inventory. The Company has applied these inventory cost valuation methods consistently from year to year.
Interest expense increased in the current year due to higher average principal balances of variable rate debt and higher average interest rates on the Company’s variable rate debt. Other expense was $2.5 million in 2023 compared to other income of $2.8 million in 2022. The effective tax rate in 2023 was 70.7%, compared to 25.2% in 2022.
Interest expense decreased in the current year due to lower average principal balances of variable rate debt and lower weighted average interest rates on variable rate debt. Other income was $3.3 million in 2024 compared to other expense of $2.5 million in 2023. The effective tax rate in 2024 was 16.3%, compared to 70.7% in 2023.
The decrease in selling, general and administrative expenses in 2023 is primarily due to lower advertising costs, selling expenses and employee costs. Work Group The Work Group’s revenue decreased $109.9 million, or 18.6%, in 2023 compared to 2022.
The decrease in selling, general and administrative expenses in 2024 is primarily due to lower advertising costs, selling expenses, distribution costs, and employee costs. Work Group The Work Group’s revenue decreased $25.3 million, or 5.3%, in 2024 compared to 2023.
As of December 30, 2023, the Company has a reserve of $57.9 million, of which $31.3 million is expected to be paid in the next 12 months and is recorded as a current obligation in other accrued liabilities, with the remaining $26.6 million recorded in other liabilities and expected to be paid over the course of up to 25 years.
As of December 28, 2024, the Company has a reserve of $39.7 million, of which $19.4 million is expected to be paid in the next 12 months and is recorded as a current obligation in other accrued liabilities, with the remaining $20.3 million recorded in other liabilities and expected to be paid over the course of up to 25 years.
The Active Group's revenue decline was driven by a decrease of $88.4 million from Merrell ® , $25.3 million from Chaco ® , $9.6 million from Saucony ® and $7.8 million from Sweaty Betty ® .
The Active Group's revenue decrease was driven by a decrease of $89.3 million from Saucony ® , $77.4 million from Merrell ® , $21.4 million from Chaco ® , and $4.9 million from Sweaty Betty ® .
The revenue decline was primarily driven by a decrease of $46.3 million from Wolverine ® , $40.2 million from Cat ® , $15.9 million from Harley-Davidson ® and $6.5 million from Bates ® .
The revenue decrease was primarily driven by a decrease of $9.0 million from Cat ® , $8.1 million from Wolverine ® , $3.3 million from Bates ® , $2.6 million from Harley-Davidson ® and $2.3 million from HYTEST ® .
Working capital balances were favorably impacted by a decrease in inventories of $286.5 million and a decrease in accounts receivable of $2.8 million, partially offset by an increase in other operating assets of $16.8 million, a decrease in accounts payable of $65.6 million and a decrease in other operating liabilities of $36.6 million.
Working capital balances were favorably impacted by a decrease in inventories of $127.1 million and a decrease in accounts receivable of $16.7 million, partially offset by a decrease in other operating liabilities of $47.9 million, an increase in other operating assets of $5.6 million, a decrease in income taxes payable of $4.3 million, and a decrease in accounts payable of $3.4 million.
Fiscal Year (In millions, except per share data) 2023 2022 Percent Change Revenue $ 2,242.9 $ 2,684.8 (16.5) % Cost of goods sold 1,370.4 1,614.4 (15.1) % Gross profit 872.5 1,070.4 (18.5) % Selling, general and administrative expenses 856.2 906.4 (5.5) % Gain on sale of businesses, trademarks and long-lived assets (90.4) (90.0) (0.4) % Impairment of long-lived assets 185.3 428.7 (56.8) % Environmental and other related costs (income), net of recoveries (10.4) 33.7 (130.9) % Operating profit (loss) (68.2) (208.4) 67.3 % Interest expense, net 63.5 47.3 34.2 % Other expense (income), net 2.5 (2.8) 189.3 % Earnings (loss) before income taxes (134.2) (252.9) 46.9 % Income tax expense (benefit) (95.0) (63.8) (48.9) % Net earnings (loss) (39.2) (189.1) 79.3 % Less: net earnings (loss) attributable to noncontrolling interests 0.4 (0.8) 150.0 % Net earnings (loss) attributable to Wolverine World Wide, Inc. $ (39.6) $ (188.3) 79.0 % Diluted earnings (loss) per share $ (0.51) $ (2.37) 78.5 % REVENUE Revenue was $2,242.9 million for 2023, representing a decline of 16.5% compared to the prior year's revenue of $2,684.8 million.
Fiscal Year (In millions, except per share data) 2024 2023 Percent Change Revenue $ 1,755.0 $ 2,242.9 (21.8) % Cost of goods sold 973.5 1,370.4 (29.0) % Gross profit 781.5 872.5 (10.4) % Selling, general and administrative expenses 690.0 856.2 (19.4) % Gain on sale of businesses, trademarks and long-lived assets (8.5) (90.4) (90.6) % Impairment of long-lived assets 9.3 185.3 (95.0) % Environmental and other related costs (income), net of recoveries (10.3) (10.4) (1.0) % Operating profit (loss) 101.0 (68.2) 248.1 % Interest expense, net 42.7 63.5 (32.8) % Other expense (income), net (3.3) 2.5 (232.0) % Earnings (loss) before income taxes 61.6 (134.2) 145.9 % Income tax expense (benefit) 10.1 (95.0) 110.6 % Net earnings (loss) 51.5 (39.2) 231.4 % Less: net earnings (loss) attributable to noncontrolling interests 3.6 0.4 800.0 % Net earnings (loss) attributable to Wolverine World Wide, Inc. $ 47.9 $ (39.6) 221.0 % Diluted earnings (loss) per share $ 0.58 $ (0.51) 213.7 % REVENUE Revenue was $1,755.0 million for 2024, representing a decrease of 21.8% compared to the prior year's revenue of $2,242.9 million.
In 2023 the Company recognized more tax benefits compared to 2022 primarily related to the generation and utilization of a capital loss. The tax benefits increased the tax benefit recognized from the pretax loss, resulting in a higher effective tax rate in 2023.
In 2023 the Company recognized more tax benefits compared to 2024 primarily related to the generation and utilization of a capital loss.
Active Group The Active Group’s revenue decreased $131.1 million, or 8.3%, in 2023 compared to 2022. The revenue decline was driven by a decrease of $88.4 million from Merrell ® , $25.3 million from Chaco ® , $9.6 million from Saucony ® and $7.8 million from Sweaty Betty ® .
Active Group The Active Group’s revenue decreased $193.0 million, or 13.4%, in 2024 compared to 2023. The revenue decrease was driven by a decrease of $89.3 million from Saucony ® , $77.4 million from Merrell ® , $21.4 million from Chaco ® and $4.9 million from Sweaty Betty ® .
Effective February 4, 2023, the Company completed the sale of the Keds ® business. In the third quarter of fiscal 2023, the Company entered into a multi-year licensing agreement of the Hush Puppies ® brand in the United States and Canada.
In the third quarter of fiscal 2023, the Company entered into a multi-year licensing agreement of the Hush Puppies ® brand in the United States and Canada. In addition, the Company completed the sale of the Hush Puppies ® trademarks, patents, copyrights, and domains in China, Hong Kong, and Macau.
The increase is due primarily to proceeds from the sale of businesses, trademarks, long-lived assets and other assets of $188.9 million, cash provided by operating activities of $121.8 million and contributions from noncontrolling interests of $31.2 million, partially offset by net revolver payments of $120.0 million, long-term debt payments of $118.3 million, cash dividends paid of $32.6 million, additions to property, plant, and equipment of $14.6 million and shares acquired related to employee stock plans of $5.8 million.
The decrease is due primarily to net revolver payments of $235.0 million, long-term debt payments of $39.2 million, cash dividends paid of $32.5 million, additions to property, plant, and equipment of $20.2 million and shares acquired related to employee stock plans of $2.6 million, partially offset by cash provided by operating activities of $180.1 million, proceeds from the sale of businesses, trademarks, long-lived assets and other assets of $102.4 million, proceeds from company-owned life insurance policy liquidations of $7.9 million and proceeds from company-owned life insurance policies of $7.0 million.
The operating profit decrease was due to revenue decreases and a 200 basis point decrease in gross margin partially offset by a $26.9 million decrease in selling, general and administrative costs. The decrease in gross margin in the current year period was primarily due to increased closeout sales and higher promotional activity in the Company’s wholesale and direct-to-consumer channels.
The operating profit increase was due to a 520 basis point increase in gross margin and a $58.9 million decrease in selling, general and administrative costs partially offset by revenue decreases. The increase in gross margin in the current year period was primarily due to decreased closeout sales, lower product costs, and lower supply chain costs.
Any excess cash flow from operating activities is expected to be used to fund organic growth initiatives, reduce debt, pay dividends and for general corporate purposes. The Company did not repurchase shares during 2023 and repurchased $81.3 million of shares in 2022. The common stock repurchase program expired in September 2023.
Any excess cash flow from operating activities is expected to be used to fund organic growth initiatives, reduce debt, pay dividends and for general corporate purposes. The Company did not repurchase shares of its common stock during 2024 and 2023. A detailed discussion of environmental remediation costs is found in Note 17 to the Company's Consolidated Financial Statements.
The current year activity includes proceeds from the sale of businesses and trademarks of $188.9 million. Financing Activities The current year debt activity includes net payments under the Revolving Facility of $120.0 million and payments on long-term debt of $118.3 million.
The current year activity includes proceeds from the sale of businesses and trademarks of $102.4 million and company-owned life insurance policy liquidations of $7.9 million. Financing Activities The current year debt activity includes net payments under the Revolving Facility of $235.0 million, payments on long-term debt of $39.2 million and proceeds from company-owned life insurance policies of $7.0 million.
Corporate Corporate expenses decreased $269.8 million in 2023 compared to 2022 primarily due to lower impairment of long-lived and intangible assets ($243.4 million), the gain on sale of businesses, trademarks, and long-lived assets ($90.4 million), lower environmental and other related costs ($44.1 million), lower incentive compensation costs ($14.5 million), and lower employee costs ($11.4 million), partially offset by the 2022 gain recorded on the sale of the Champion trademarks for footwear in the United States and Canada ($90.0 million), and higher reorganization activities ($36.8 million).
Corporate Corporate expenses decreased $115.0 million in 2024 compared to 2023 primarily due to lower impairment of long-lived and intangible assets ($176.3 million), lower reorganization activities ($18.0 million) and lower employee costs ($5.3 million), partially offset by lower gains on sale of businesses, trademarks, and long-lived assets ($81.5 million), higher incentive compensation costs ($11.6 million) and higher environmental and other related costs ($0.1 million).
The operating profit decrease was due to revenue decreases and a 180 basis point decrease in gross margin, partially offset by a $2.6 million decrease in selling, general and administrative costs.
The operating profit increase was due to a 180 basis point increase in gross margin and an $11.1 million decrease in selling, general and administrative costs partially offset by revenue decreases. The increase in gross margin in the current year was due to decreased closeout sales, lower product cost and favorable average selling price.
The reportable segment results for years 2023 and 2022 are as follows: Fiscal Year (In millions) 2023 2022 Change Percent Change REVENUE Active Group $ 1,439.1 $ 1,570.2 $ (131.1) (8.3) % Work Group 480.6 590.5 (109.9) (18.6) % Other 323.2 524.1 (200.9) (38.3) % Total $ 2,242.9 $ 2,684.8 $ (441.9) (16.5) % OPERATING PROFIT (LOSS) Active Group $ 140.3 $ 198.4 $ (58.1) (29.3) % Work Group 58.1 102.5 (44.4) (43.3) % Other 32.8 59.9 (27.1) (45.2) % Corporate (299.4) (569.2) 269.8 47.4 % Total $ (68.2) $ (208.4) $ 140.2 67.3 % Further information regarding the reportable segments can be found in Note 18 to the Company's Consolidated Financial Statements.
The reportable segment results for years 2024 and 2023 are as follows: Fiscal Year (In millions) 2024 2023 Change Percent Change REVENUE Active Group $ 1,246.1 $ 1,439.1 $ (193.0) (13.4) % Work Group 455.3 480.6 (25.3) (5.3) % Other 53.6 323.2 (269.6) (83.4) % Total $ 1,755.0 $ 2,242.9 $ (487.9) (21.8) % OPERATING PROFIT (LOSS) Active Group $ 184.9 $ 140.3 $ 44.6 31.8 % Work Group 69.2 58.1 11.1 19.1 % Other 31.3 32.8 (1.5) (4.6) % Corporate (184.4) (299.4) 115.0 38.4 % Total $ 101.0 $ (68.2) $ 169.2 248.1 % Further information regarding the reportable segments can be found in Note 18 to the Company's Consolidated Financial Statements.
The increase in gross margin in the current year period was primarily due to the divestiture of the lower margin Keds ® and performance leathers businesses. The decrease in selling, general and administrative expenses in the current year period was primarily due to lower advertising costs, selling expenses and the divestiture of the Keds ® and performance leathers businesses.
The decrease in selling, general and administrative expenses in the current year period was primarily due to the divestiture of the Sperry ® business, performance leathers business, and Keds ® business, along with the licensing of the Hush Puppies ® business.
GAAP"), requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates these estimates.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of the Company’s Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP"), requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates these estimates.
The Company declared cash dividends of $0.40 per share in each of 2023 and 2022 . Dividends paid totaled $32.6 million and $32.8 million for 2023 and 2022 , respectively. A quarterly dividend of $0.10 per share was declared on February 7, 2024 to shareholders of record on April 1, 2024.
Dividends paid totaled $32.5 million and $32.6 million for 2024 and 2023 , respectively. A quarterly dividend of $0.10 per share was declared on February 5, 2025 to shareholders of record on April 1, 2025. NEW ACCOUNTING STANDARDS See Note 2 to the Company's Consolidated Financial Statements for information related to new accounting standards.
Please refer to Item 1A, “Risk Factors” for a more complete discussion of the risks the Company encounters in our business. 2023 FINANCIAL OVERVIEW • Revenue was $2,242.9 million for 2023, representing a decrease of 16.5% compared to the prior year's revenue of $2,684.8 million. • Gross margin for 2023 was 38.9%, compared to 39.9% in 2022. • The effective tax rate in 2023 was 70.7%, compared to 25.2% in 2022. • Diluted loss per share in 2023 was $0.51, compared to diluted loss per share of $2.37 in 2022. • The Company declared cash dividends of $0.40 per share in 2023 and 2022. • Cash flow provided by operating activities was $121.8 million in 2023 and cash flow used in operating activities was $178.9 million in 2022. • Compared to the prior year, inventory decreased $371.6 million, or 49.9%, as of year-end. 26 RESULTS OF OPERATIONS The following is a discussion of the Company’s results of operations and liquidity and capital resources.
Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the fiscal year ended December 30, 2023, filed with the SEC on February 22, 2024. 2024 FINANCIAL OVERVIEW • Revenue was $1,755.0 million for 2024, representing a decrease of 21.8% compared to the prior year's revenue of $2,242.9 million. • Gross margin for 2024 was 44.5%, compared to 38.9% in 2023. • The effective tax rate in 2024 was 16.3%, compared to 70.7% in 2023. • Diluted earnings per share in 2024 was $0.58, compared to diluted loss per share of $0.51 in 2023. • The Company declared cash dividends of $0.40 per share in 2024 and 2023. • Cash flow provided by operating activities was $180.1 million in 2024 and $121.8 million in 2023. • Compared to the prior year, inventory decreased $133.0 million, or 35.6%, as of year-end. 24 RESULTS OF OPERATIONS The following is a discussion of the Company’s results of operations and liquidity and capital resources.
Operating cash flows included non-cash add back for the impairment of long-lived assets of $185.3 million, depreciation and amortization expense adjustment of $35.1 million, stock-based compensation expense adjustment of $15.2 million, deferred income tax adjustment of $95.8 million, gain on sale of business, trademarks and long-lived assets of $90.4 million, environmental and other related costs, net of cash payments and recoveries received cash outflow of $55.1 million, and pension expense adjustment of $0.7 million. 31 Investing Activities The Company made capital expenditures of $14.6 million and $36.5 million in years 2023 and 2022, respectively, for building improvements, eCommerce site enhancements, new retail stores, distribution operations improvements and information system enhancements.
Operating cash flows included non-cash add back for depreciation and amortization expense adjustment of $26.2 million, deferred income tax adjustment of $21.4 million, stock-based compensation expense adjustment of $19.1 million, environmental and other related costs, net of cash payments and recoveries received cash outflow of $13.3 million, the impairment of long-lived assets of $9.3 million, gain on sale of business, trademarks and long-lived assets of $8.5 million, and pension expense adjustment of $0.2 million.
The Company would not be required to quantitatively determine the fair value unless the Company determines, based on the qualitative assessment, that it is more likely than not that its fair value is less than the carrying value. 33 The Company performs its annual testing for goodwill and indefinite-lived intangible asset impairment at the beginning of the fourth quarter of the fiscal year for all reporting units.
The Company would not be required to quantitatively determine the fair value unless the Company determines, based on the qualitative assessment, that it is more likely than not that its fair value is less than the carrying value.
The Company had the following contractual obligations due by period at December 30, 2023: (In millions) Total Less than 1 year 1-3 years 3-5 years More than 5 years Long-term debt obligations (1) $ 1,088.7 $ 352.7 $ 127.2 $ 44.0 $ 564.8 Operating lease obligations 210.7 35.2 58.8 44.4 72.3 Purchase obligations (2) 241.8 241.8 — — — Supplemental Executive Retirement Plan 45.7 4.1 9.0 9.4 23.2 Municipal water improvements (3) 25.5 12.2 10.4 2.9 — TCJA transition obligation 21.0 9.3 11.7 — — Total (4) $ 1,633.4 $ 655.3 $ 217.1 $ 100.7 $ 660.3 (1) Includes principal and interest payments on the Company’s long-term debt.
The Company had the following contractual obligations due by period at December 28, 2024: (In millions) Total Less than 1 year 1-3 years 3-5 years More than 5 years Long-term debt obligations (1) $ 768.4 $ 111.8 $ 69.8 $ 586.8 $ — Operating lease obligations 178.5 34.0 51.0 38.6 54.9 Purchase obligations (2) 322.5 322.5 — — — Supplemental Executive Retirement Plan 45.4 4.1 9.1 9.1 23.1 Municipal water improvements (3) 13.4 5.2 8.2 — — Tax Cuts and Jobs Act transition obligation 11.7 11.7 — — — Total (4) $ 1,339.9 $ 489.3 $ 138.1 $ 634.5 $ 78.0 (1) Includes principal and interest payments on the Company’s long-term debt.
Liquidity Cash and cash equivalents of $184.6 million as of December 30, 2023 were $49.1 million higher compared to December 31, 2022.
Liquidity Cash and cash equivalents of $152.1 million as of December 28, 2024 were $32.5 million lower compared to December 30, 2023.
The Wolverine ® decrease was primarily due to softer consumer demand in U.S. wholesale and high inventory levels at retail customers resulting in a continually heightened promotional environment. The Cat ® decrease was primarily due to softer consumer demand across all regions. The Harley-Davidson ® decrease was primarily due to lower at-once shipments and declines in top dealer accounts.
The Bates ® decrease was primarily due to softer consumer demand in the U.S. direct-to-consumer channels, high inventory levels at certain retail customers and lower closeout sales versus the prior year. The Harley-Davidson ® decrease was primarily due to declines in top dealer accounts.
Other operating profit decreased $27.1 million, or 45.2%, in 2023 compared to 2022. The operating profit decrease was due to revenue decreases partially offset by a 30 basis point increase in gross margin and a $50.9 million decrease in selling, general and administrative costs.
The Keds ® decrease is due to the divestiture of the business, effective February 4, 2023. Other operating profit decreased $1.5 million, or 4.6%, in 2024 compared to 2023. The operating profit decrease was due to revenue decreases partially offset by a $90.0 million decrease in selling, general and administrative costs.
The 28 Sweaty Betty ® decrease was primarily due to softer consumer demand in direct-to-consumer sales channels across the U.K., Ireland, and U.S. markets reflecting the challenging economic environment. The Active Group’s operating profit decreased $58.1 million, or 29.3%, in 2023 compared to 2022.
The Sweaty 26 Betty ® decrease was primarily due to softer consumer demand in direct-to-consumer and wholesale sales channels across the U.S. and China markets and lower end of life inventory sales compared to the prior year. The Active Group’s operating profit increased $44.6 million, or 31.8%, in 2024 compared to 2023.
In addition, the Company completed the sale of Hush Puppies ® trademarks, patents, copyrights, and domains in China, Hong Kong, and Macau. 25 Effective August 23, 2023, the Company completed the sale of the U.S. Leathers business and effective December 28, 2023, the Company completed the sale of the Asia-based Leathers business.
Effective January 1, 2024, the Company completed the sale of the Company’s equity interests in the Merrell ® and Saucony ® China joint venture entities. Effective August 23, 2023, the Company completed the sale of the U.S. Leathers business and effective December 28, 2023, the Company completed the sale of the Asia-based Leathers business.
The change in revenue reflected a 8.3% decline from the Active Group, an 18.6% decline from the Work Group and a 38.3% decline from Other.
The change in revenue reflected a $193.0 million, or 13.4%, decrease from the Active Group, a $25.3 million, or 5.3%, decrease from the Work Group and a $269.6 million, or 83.4%, decrease from Other.
A detailed discussion of environmental remediation costs is found in Note 17 to the Company's Consolidated Financial Statements. The Company has established a reserve for estimated environmental remediation costs based upon an evaluation of currently available facts with respect to each individual affected site.
Refer to Note 4, “Goodwill and Other Intangible Assets” for additional discussion of the Sweaty Betty ® goodwill impairment and the Sweaty Betty ® and Sperry ® trade name impairments. Environmental The Company establishes a reserve for estimated environmental remediation costs based upon the evaluation of currently-available facts with respect to each individual affected site.
Other Other revenue decreased $200.9 million, or 38.3%, in 2023 compared to 2022. The revenue decline was driven by a decrease of $87.0 million from Sperry ® , $84.7 million from Keds ® and $21.6 million from the performance leathers business.
The decrease in Other revenue was primarily driven by a decrease in revenue from businesses that were sold in 2023 and 2024 and the licensing of the Hush Puppies ® business in 2023, which includes decreases of $191.9 million from Sperry ® , $37.0 million from the performance leathers business, $25.7 million from Hush Puppies ® and $6.5 million from Keds ® .
See Note 20 to the Company's Consolidated Financial Statements for further discussion. The following discussion includes a comparison of the Company's results of operations and liquidity and capital resources for fiscal 2023 and 2022.
The Company continues to own the Hush Puppies ® brand throughout the rest of the world. Effective February 4, 2023, the Company completed the sale of the Keds ® business. The following discussion includes a comparison of the Company's results of operations and liquidity and capital resources for fiscal 2024 and 2023.
The Sperry ® decrease was primarily driven by softer consumer demand in U.S. wholesale and softer boot sales in the direct-to-consumer channels. The Keds ® decrease is due to the divestiture of the business effective February 4, 2023. The performance leathers business decrease is due to the divestiture of the U.S. leathers business effective August 23, 2023.
The Cat ® decrease was primarily due to timing of shipments in the U.S. and international channels, lower closeout sales versus the prior year and softer consumer demand in direct-to-consumer channels, partially offset by growth in the U.S. wholesale channel. The Wolverine ® decrease was primarily due to lower closeout sales compared to the prior year.
The Bates ® decrease was primarily due to softer consumer demand in U.S. wholesale and direct-to-consumer channels. The Work Group’s operating profit decreased $44.4 million, or 43.3%, in 2023 compared to 2022.
The HYTEST ® decrease was primarily due to lower closeout sales compared to the prior year, partially offset by growth in the U.S. wholesale channel. The Work Group’s operating profit increased $11.1 million, or 19.1%, in 2024 compared to 2023.
Direct-to-consumer revenue decreased by $109.4 million, or 15.8% during 2023 compared to 2022. GROSS MARGIN For 2023, the Company’s gross margin was 38.9%, compared to 39.9% in 2022. The gross margin decrease was primarily driven by unfavorable supply chain costs in the Company’s wholesale channel and unfavorable average selling price and product costs changes in the Company’s direct-to-consumer channel.
International revenue represented 49.1%, and 45.7% of total reported revenues in 2024 and 2023, respectively. Changes in foreign exchange rates increased revenue by $2.8 million during 2024. Direct-to-consumer revenue decreased by $98.5 million, or 16.9% during 2024 compared to 2023. GROSS MARGIN For 2024, the Company’s gross margin was 44.5%, compared to 38.9% in 2023.
The decline in Other revenue was primarily driven by a decrease of $87.0 million from Sperry ® , $84.7 million from Keds ® and $21.6 million from the performance leathers business. International revenue represented 45.7%, and 41.8% of total reported revenues in 2023 and 2022, respectively. Changes in foreign exchange rates increased revenue by $3.4 million during 2023.
The revenue decline was primarily driven by a decrease of $191.9 million from Sperry ® , $37.0 million from the performance leathers business, $25.7 million from Hush Puppies ® and $6.5 million from Keds ® . The Sperry ® decrease is due to the divestiture of the business effective January 10, 2024.
Removed
Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 23, 2023. Known Trends Impacting Our Business Macroeconomic conditions and supply chain disruptions continue to adversely affect the Company’s business results.
Added
Effective May 4, 2024, the Company entered into global multi-year licensing agreements of Merrell ® and Saucony ® kids footwear and Merrell ® apparel and accessories. Effective January 10, 2024, the Company completed the sale of the Sperry ® business.
Removed
During the third quarter of 2022, inventory transit times improved ahead of plan, resulting in challenges managing the timing of inventory flow, which caused the Company to have excess inventory. Elevated inventory levels have resulted, and continue to result, in storage and processing capacity pressures at the Company’s U.S. distribution centers.
Added
The gross margin increase was primarily driven by less end-of-life inventory sales, lower supply chain costs and lower product costs. OPERATING EXPENSES Operating expenses decreased $260.2 million in 2024, to $680.5 million.
Removed
The Company has incurred additional inventory carrying costs including costs for outside storage and other inventory related holding costs. The Company decreased inventory purchases and increased promotional activity during the fourth quarter of 2022 and fiscal year 2023 to reduce excess inventory.
Added
The Saucony ® decrease was primarily due to lower end of life inventory sales compared to the prior year, the divestiture of the Company's equity interest in the China joint venture entity, effective January 1, 2024, and lower Saucony ® kids revenue resulting from licensing the brand in the United States and Canada starting in the second quarter of 2024.
Removed
These actions caused inventories to decline in fiscal year 2023 by $371.6 million, compared to the fourth quarter of 2022. As of the end of fiscal year 2023, the Company had $30.9 million of inventory in-transit, which represents a decrease in inventory of $115.9 million as compared to the end of the fourth quarter of 2022.
Added
The Merrell ® decrease was primarily due to lower end of life inventory sales compared to the prior year, softer consumer demand in the U.S. wholesale and International channels and lower Merrell ® kids revenue resulting from licensing the brand in the United States and Canada starting in the second quarter of 2024, partially offset by growth from new products, including Moab Speed and Speed Strike, and growth in core brand franchises, including Moab 3 and Jungle Moc.
Removed
As inventory transit and product purchase timelines continue to move towards pre-pandemic levels, the Company expects that the flow of seasonal product and our inventory levels will normalize by the end of fiscal 2024.
Added
The Chaco ® decrease was primarily due to lower closeout and end of life inventory sales compared to the prior year and softer consumer demand.
Removed
Inflation and other macroeconomic pressures in the U.S. and the global economy such as rising interest rates, energy prices and recession fears are creating a complex and challenging retail environment for the Company and its customers as consumers generally seek discounted merchandise and reduce discretionary spending, which in turn impacts wholesale customer orders.
Added
The decrease in selling, general and administrative expenses in 2024 was primarily due to lower advertising costs, selling expenses, and employee costs. Other Other revenue decreased $269.6 million, or 83.4%, in 2024 compared to 2023.
Removed
Inflationary pressures are increasing logistics costs, including labor costs, raw materials costs and product input costs, which continue to adversely affect the Company’s results. These increased costs, combined with higher promotional activity, contributed to gross margin contraction of 100 basis points for fiscal year 2023 compared to fiscal year 2022.
Added
The performance leathers business decrease is due to the divestiture of the U.S. leathers business, effective August 23, 2023 and the Asia-based leathers business, effective December 28, 2023. The Hush Puppies ® decrease is due to the licensing of the brand in the United States and Canada starting in the third quarter of 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe Company’s investments in foreign subsidiaries with a functional currency other than the U.S. dollar are generally considered long-term. At December 30, 2023, a weaker U.S. dollar compared to certain foreign currencies increased the value of these investments in net assets by $16.8 million from their value at December 31, 2022.
Biggest changeThe Company’s investments in foreign subsidiaries with a functional currency other than the U.S. dollar are generally considered long-term. At December 28, 2024, a stronger U.S. dollar compared to certain foreign currencies decreased the value of these 33 investments in net assets by $16.5 million from their value at December 30, 2023.
Any associated foreign currency gains or losses on the settlement of local currency amounts are reflected within the Company's consolidated statement of operations and comprehensive income. 35 Assets and liabilities outside the U.S. are primarily located in the United Kingdom, Canada and the Netherlands.
Any associated foreign currency gains or losses on the settlement of local currency amounts are reflected within the Company's consolidated statement of operations and comprehensive income. Assets and liabilities outside the U.S. are primarily located in the United Kingdom, Canada and the Netherlands.
Based on the level of variable-rate debt outstanding as of that date, a 100 basis point increase in the weighted-average interest rate would have increased the Company’s annual pre-tax interest expense by approximately $3.0 million. The Company does not enter into contracts for speculative or trading purposes, nor is it a party to any leveraged derivative instruments. 36
Based on the level of variable-rate debt outstanding as of that date, a 100 basis point increase in the weighted-average interest rate would have increased the Company’s annual pre-tax interest expense by approximately $0.9 million. The Company does not enter into contracts for speculative or trading purposes, nor is it a party to any leveraged derivative instruments. 34
At December 30, 2023 and December 31, 2022, the Company had outstanding forward currency exchange contracts to purchase primarily U.S. dollars in the amounts of $269.0 million and $334.2 million, respectively, with maturities ranging up to 531 and 524 days, respectively. The Company also has sourcing locations in Asia, where financial statements reflect the U.S. dollar as the functional currency.
At December 28, 2024 and December 30, 2023, the Company had outstanding forward currency exchange contracts to purchase primarily U.S. dollars in the amounts of $263.5 million and $269.0 million, respectively, with maturities ranging up to 531 and 531 days, respectively. The Company also has sourcing locations in Asia, where financial statements reflect the U.S. dollar as the functional currency.
The Company’s total variable-rate debt was $376.7 million at December 30, 2023 and the Company held a forward-dated interest rate swap agreement, denominated in U.S. dollars that will effectively convert $75.3 million of this amount to fixed-rate debt. The interest rate swap derivative instrument is held and used by the Company as a tool for managing interest rate risk.
The Company’s total variable-rate debt was $102.5 million at December 28, 2024 and the Company held a forward-dated interest rate swap agreement, denominated in U.S. dollars that will effectively convert $16.7 million of this amount to fixed-rate debt. The interest rate swap derivative instrument is held and used by the Company as a tool for managing interest rate risk.
The fair value of the interest rate swap was determined to be a net asset of $1.8 million as of December 30, 2023. As of December 30, 2023, the weighted-average interest rate on the Company’s variable-rate debt, net of the impact of the interest rate swap, was 6.18%.
The fair value of the interest rate swap was determined to be a net asset of $0.2 million as of December 28, 2024. As of December 28, 2024, the weighted-average interest rate on the Company’s variable-rate debt, net of the impact of the interest rate swap, was 5.84%.
At December 31, 2022, a stronger U.S. dollar compared to foreign currencies decreased the value of these investments in net assets by $76.3 million from their value at January 1, 2022.
At December 30, 2023, a weaker U.S. dollar compared to certain foreign currencies increased the value of these investments in net assets by $16.8 million from their value at December 31, 2022.

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