• by Sarah Mahoney  @mahoney_sarah, August 12, 2023

Wolverine World Wide hopes to reverse dismal sales trends with a new CEO and a reshaped portfolio of brands, including the possible sale of Sperry.

The Rockford, Michigan company promoted president Christopher Hufnagel to the additional role of chief executive officer. He succeeds Brendan Hoffman, who is no longer with the company.

The announcement came the same day Wolverine reported a disheartening 17.4% drop in revenue to $589.1 million, compared with $713.6 million in the same period last year. Net earnings plummeted to $24.4 million from $124.5 million in the second quarter of last year. The company says things won’t get better soon, forecasting a drop in sales between 10% and 10.7% that lands between $2.26 billion to $2.28 billion.

Sales at Saucony, its athletic shoe brand, rose 1.6% in the quarter. But at every other brand, they nosedived, falling 28% at Wolverine, its work brand; 24% at Sperry; 16% at Merrell; and 7% at Sweaty Betty.

Hufnagel joined the company in 2008 after holding senior roles at Under Armour, Gap and Abercrombie & Fitch.

Before his appointment to president in May of this year, he had been in charge of the company’s active group, overseeing Merrell, Saucony and Chaco brands, children’s products, and global licensing.

Last year, the company announced a plan to refocus its portfolio and invest in brands with the most potential. “The current adversity has not only deepened our conviction that our strategic direction is more correct than ever, but that we must execute it with greater boldness and speed,” Hufnagel says in the release.

That shift involves concentrating on two groups: active brands and work brands. That means exploring strategic alternatives for Sperry and transitioning Hush Puppies to a licensing model. It sold Keds in February.

Wolverine’s “disappointing update clouds its financial outlook,” writes Jonathan Komp, an analyst who covers the company for Baird. “While we maintain an optimistic view of the positioning of the company’s brand portfolio over the long-term, especially for Merrell, Saucony, and Work which are offsetting Sweaty Betty and Sperry, we remain concerned about margin pressures and potential macroeconomic headwinds.”