Q1 2020 Earnings Call
dead dead dead dead.
Greetings and welcome to the Wolverine worldwide Inc. First quarter fiscal 2020 results conference call at this time. All participants are in a listen-only mode a question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad, as a reminder. This conference is being recorded our now like to turn the conference over to your host Paul Ryan, please go ahead sir.
Good morning, and Welcome to our first quarter 2020 conference call on the call today are Blake Krieger our chairman and chief executive officer and president in Mike storenet our senior vice president and Chief Financial Officer earlier this morning. We announced our financial results for the first quarter twenty-twenty the releases available on many new sites, or it can be viewed from our corporate website at Wolverine worldwide. If you would prefer to have a copy of the news release sent to you directly, please call Francesca Flandreau at 646-677-1814.
This morning's press release in comments made during today's earnings call included non-gaap disclosures. These disclosures were reconciled with attached tables within the body of the release off during our call. We are providing adjusted Financial results, which are just for the impacts of environmental and other related costs and environmental cost recoveries Business Development related costs reorganization costs and costs associated with the covid-19 pandemic and foreign exchange rate changes.
I'd also like to remind you that predictions and projections made during today's conference call regarding Wolverine worldwide and its operations are forward-looking statements under US security laws as a result. We must caution you that is with any prediction or projection. There are a number of factors that could cause actual results to differ materially these important risk factors are identified in the company's SEC filings and in our press releases where that being said, I'd like to turn the call over the blade Krieger. Thanks Paul. Good morning everyone and thanks for joining us.
I would like to open this morning by saying I have never been more proud of our company and our people I would like to thank our Global team and key partners for their exceptional leadership perseveres in collaboration as we continue to address the unprecedented events the covid-19 pandemic. Our first priority has been the health and safety of our team and communities around the world. I'll talk in more detail about this later, but wanted to First Express my sincere gratitude for these efforts as we weather the near-term challenges and position the company to win as The New Normal take shape turning to the business earlier this morning. We reported first-quarter revenue of approximately 440 million dollars off and adjusted earnings per share of $0.28.
These results reflect the downturn in our business during March, which was driven by the pandemic leading up to that point our revenue and earnings were trending in line with our expectations for the office.
At the very onset of the current crisis, we divided our plans and responses into 3 time frames the next ninety days the remainder of 20 20 and 21 forward. We quickly developed a play book that has served us well and consists of six fundamental sets of action number one Safety First project our teams in our communities. We've been very lucky here. So far a number to maintain and enhance our balance sheet liquidity and strong financial position with Mike will have more details on this in a moment, but we've been very active here.
number three
Adjust our infrastructure for Speed and organized for the future number for accelerate our online strategy. This involves our own e-commerce businesses as well as the online businesses of our pure-play and wholesale customers.
number 5 focus on numerous and product stories in messaging
and number six position the company to take advantage of the opportunities that will exist in The New Normal.
This approach has certainly helped us make fast decisions and guided our action plans over the last six weeks. We continue to reassess our Playbook each week and will undoubtedly mod find tweak it over time.
Our team has been proactive and we moved quickly to navigate the ongoing impact of this Health crisis on our Global business. We have successfully remained open for business despite you need restrictions and limitations imposed in many countries.
Our supply chain is fully operational including our distribution centers around the world and we continue to service consumer demand in those channels that remain open.
During the first quarter are owned e-commerce business grew over 17% and has steadily accelerated with our Global e-commerce business and demand up over a hundred percent in the last two weeks in 2019 the Us online Channel which includes our own e-commerce sites and the online business of our wholesale customers represent about 40% of our total Us distribution.
Many of these third-party sites are currently operational and our own sites are performing very well as a result. We would expect that are combined Us online business office or girl this year and represent somewhere between fifty and sixty percent of our us Revenue in 2020.
Soon after the pandemic hit we implemented a comprehensive set of measures to lever are agile business model and bolster the company's Financial strength. We created a fake organization design by removing the group hierarchy not only to help reduce overhead costs, but also importantly to further enhance our ability to react quickly change on certain times. We have adjusted the flow of inventory in line with expected future demand. We have also implemented compensation changes including salary reductions of 25 to 35% for the company's management team through the remainder of twenty-twenty.
I'm taking a 50% reduction and have also significantly reduced director compensation over the same time frame. We've also made stock awards to a broad range of managing employees.
Finally, we were forced to furlough some team members in our retail stores and offices who idled as a result of the shutdowns and business slowed down most of the furloughs are short-term or rotational in nature.
We have moved quickly to protect and stabilize. Our team will still positioning the company effectively for the near-term challenges and future opportunities.
In short order, we reduced expenses heightened our inventory disciplined and significantly increased the company's liquidity. Our business model has proven capable of generating cash and earnings and compromise environments before and we expect the company to once again deliver healthy operating cash flow and twenty20 Mike's turn it off or details on our sustainable liquidity position in a couple of minutes while ensuring the company is on sound footing. We also reached out to support our communities. We do offer 5,000 protective n95 mask to a local hospital group here in our home state of Michigan and our truck will grant converted it to repair and custom Footwear operations off the production of math for front-line health-care professionals.
We have also donated thousands of pairs of Footwear to health care workers and First Responders and continue to support the two ten Footwear foundation's efforts to help those in need within our industry our efforts to support our communities. Especially First Responders will continue
We believe we are in a strong position to navigate the pandemic headwinds due to our efficient and flexible business model our ability to act and adapt quickly to today's challenges are hard pivot and strategic focus on digital and e-commerce the strength of our brand portfolio and finally the experience of our teams and Leadership.
There will be plenty of market share in other opportunities as the pandemic subsides and we expect to emerge from these events and even stronger company poised to take advantage of these opportunities. I will offer some further insights into the strength of our current business model and near-term strategies. But first, let me briefly review the performance of our brand groups in Cuba.
Starting with the Wolverine Michigan group reported Revenue was down 18.1% to the prior year and down 17.6% on a constant currency basis reflecting the sweeping impact of the pandemic.
Following mid-teens growth in Q4 Merrill star q1 on track with expectations, but finished down low double-digits to the prior-year well worth reading in cat took significant market share during the quarter in the US work category Wolverine was downed High Teens compared to the prior-year and CAD finished down double-digits charcoal was also down double-digits and smaller brands in the Michigan group also saw declines related to the pandemic.
I'm pleased with.
The strong momentum Marilyn she lived in Q4 and we saw this strength continue into the first two periods of this year for the quarter in total nearly twenty-five persistence and sales are up triple-digits so far in. For spurred by new products like the Bravada a sneaker hiker hybrid in the performance category off and the general sample collection in the lifestyle segment.
Like Meryl Wolverine cat and chocolate all grew their respective e-commerce businesses and a strong double-digit pays for the quarter on Wolverine, the new Samsung product. I'll perform the brands expectations and became its top seller.
On cat Footwear, the new excavator Superlight cats take on Superior toughness in a lightweight product was the brands top seller outpacing strong core work Styles trending lifestyle products like the Intruder and code Styles. Also perform very well for cat.
Finally, I'm chacos.com the new sandal became the Brand's biggest launch in several years.
moving to the Wolverine Boston group
Reported Revenue was down 11.1% to the prior year and down 10.6% on a constant currency basis.
Coming up mid-teens growth in Q4 Sperry finished q1 down double-digits to the prior-year.
For Saucony high double-digit growth to start the quarter help the brand deliver double-digit q1 growth and impressive performance in This Global retail environment out further evidence that the brand is regained its momentum.
Sperry groups DTC business High single digits in the quarter with e-commerce and stores both up to the prior-year.
The brand new plush wave technology has been selling well and delivers exceptional lightweight comfort in the brands most loved icons in addition berries partnership with jobs and kicked off during the quarter and it's beginning to create excitement in key categories including boat.
Saucony was our top-performing brand in the quarter fueled by the powerful combination of the Innovative new product and a focus on Consumer Connections through e-commerce month soccer me double digits driven by the recently-launched award-winning Triumph 17 and guide 13. Both franchises, utilize the brand new power run plus midsole cushioning technology, which delivers enhanced flexibility fit durability and energy return while weighing 1/3 less than comparable models.
healthier distribution
Strategy and sales mix again resulted in a meaningful triple-digit basis point expansion of gross margin for the Saucony brand.
And I'll take a few months to discuss our perspective on the macroeconomic environment and additional details on how the company will leverage its strength to succeed moving forward.
We have been actively engaged with our Global Partners to track and respond to the impact of this pandemic at various phases about break containment and Recovery every Market is different. But those countries that were affected early like China and certain countries in Europe provides some insight for how things may progress in later developing markets like the US.
In addition to This Global Perspective am also personally sitting on a council of business Executives Health leaders and medical experts advising our state Governor on the time protocols for opening Michigan's economy at the moment. I expect the US recovery will be gradual with various States and regions reopening on somewhat different timetables and with certain industries and businesses returning to work before others while we can all learn from each other. I doubt there is a single Playbook that will be applicable across Industries types of facilities countries or Global regions.
Well, the current Global retail environment will improve its consumers return to work and stores reopen we anticipate that there will be a measure of lasting impact. I would not however bet against the consumer as things stabilize. We expect consumer behavior and shopping preferences will shift and that distribution models will need to change in life with this new landscape.
Are Nimble and efficient operating model mitigates risk and provides key advantages in this Dynamic environment? We have a diverse portfolio of Brands wage over a thousand years of brand Equity a strong and growing digital and e-commerce competency global distribution Network that we have built over many decades of covering around a hundred and seventy countries in which is not dependent on a single brand distribution Channel or region a robust and flexible supply chain and a great team with deep industry experience in The Proven ability to act quickly and adapt to changing demands on the business.
Our focus on the consumer and digital and e-commerce or the last several years is now providing a competitive Advantage for the company.
Consumers have started to spend even more time online and Our Brands were able to Pivot quickly to engage them digitally providing a way to shop online. But also authentically with connecting with them to build stronger long-term Affinity. We have prioritized full price selling in our own e-commerce business with a focus on improved Nunes and storytelling to capture the consumer's interest during their increased time at home and online. For example, when choco announced that it would be converting its repair and custom sandal operation to the production of math and also introduce new product with sharply focused storytelling these actions drove almost triple digit increases in chocolate cake.
We have similar examples in Merrill Saucony.
And the rest of the portfolio consumers looking for newness in an optimistic brand message in Outlook.
In addition to our digital competency, we believe the core product categories are brands are known for also position as well with today's consumer.
Given the uncertain Retail Landscape We Believe being brand owners represents a distinct Advantage for the company, especially when product offerings are at accessible price point we are focused on offering consumers a steady flow of fresh Innovative product and have carefully re-crafted our brand and product stories to resonate with the consumer in this dramatically changed environment.
We are fortunate to have many Brands focused on health and wellness outdoor running activities and Home Comfort. We also offer excellent product in the work-life go and professional segments across all first responder categories.
Merrell Saucony Sperry and choco are all ideally positioned as leading Brands and hiking running and water activities and Wolverine cat Merrill Bates. Am I test are all leading brands in the work tactical and professional categories these latter categories tend to be more need-based purchases that typically perform better and time when consumer discretionary spending is tight.
Our business model is built to deliver earnings and cash flow under incredibly challenging conditions as we have proven in Past Times of recession and Market disruption off our Diversified portfolio Brands product categories and channels of distribution coupled with our broad Geographic reach all served to mitigate risk in a relatively low cost structure and Nimble supply chain provide significant efficiency and flexibility to adjust and times like these the company is on strong footing the challenges of the near-term. And when is the new normal develops?
Before I hand it over to my I want to say again how incredibly proud I am of our team in our people they have acted with tremendous urgency and a genuine team mindset as we have responded to the pandemic and its impact as a result of their hard work and dedication. We expect the company to deliver significant positive cash flow. Once again in 2020 and to Iraq even stronger with that on altering the call over to my external our senior vice president and Chief Financial Officer will provide additional commentary on our performance in the first quarter off as well as provide more details on our game plan for the rest of the year might.
Thanks Blake and thanks to all of you.
You for joining us on the call today?
I would like to start by briefly echoing Blake's comments regarding our team.
This company is made up of committed and resilient people.
And we have seen the very best of them over the last several weeks.
Their response to the current challenge has been incredible. I am very grateful for their commitment and for the extra effort everyone is put forth.
Today's call I will provide more details on our first quarter results and then share an update on how the company has responded to the current situation revenue for the first quarter was 439.3 million dollars down 16.1% compared to the prior-year or down 15.6% on a constant currency basis.
The strong momentum established in Q4 of 2019 including mid-teens growth from our two largest brands.
DTC growth of 25% and over 10% growth from our international business was interrupted in q1 by the onset of covid-19.
Revenue and profit Trends were on plan for the first two months of the quarter.
before the impact of this pandemic
March was initially expected to be the strongest month of the quarter based on our order book and the normal progression of our DTC businesses.
Widespread shutdown of retail stores in many key markets including the closure of our own stores had a significant impact on March Revenue.
Despite quarterly growth of over Seventeen percent our own e-commerce business suffered declines for much of March before recovering nicely starting late in the quarter.
Despite the unexpected in Rapid decline in March. Revenue are strong business model showed resilience and delivered very good gross margin and earnings for the quarter.
Gross margin for the first quarter was 41.4% slightly better than planned.
The impact of new tariffs had a 70 basis-point negative impact on gross margin compared to last year.
Adjusted selling General and administrative expenses of 151 point six million dollars were lower than the prior-year by over $11 reflecting our ability to adjust quickly to an unplanned downturn in the business.
Adjusted operating margin was 6.9% a result of the abrupt erosion of conditions within the quarter and its impact on Revenue.
The adjusted effective tax rate of -4 per cent was unusually low due mainly to the favorable resolution of an outstanding foreign tax matter.
Adjusted diluted earnings per share of $0.28 29 cents on a constant currency basis were just short of our previous guidance, despite the significant impact of this Panthers. Let me shift to the balance sheet.
Was 405.3 million dollars up only 8.4% versus the prior-year?
When excluding inventory from new businesses talking Italy new stores and our joint venture in China inventory grew only 5%
cash used in operating activities in the quarter was 76.6 million a $56 Improvement compared to the prior-year.
At the end of the first quarter the company had 472 point six million dollars of cash on hand nearly four hundred million dollars more than last year.
In response to the impact of covid-19. We are focused on strong liquidity the health of our balance sheet and generating maximum operating cash flow over the next 24 months.
We have taken several critical actions to support these priorities with which I will share now.
Our balance sheet was very strong entering 2020 including a clean inventory position.
During the first quarter. We took quick action to increase the company's liquidity through a series of important measures.
We drew down the remainder of our revolving credit line a total of $367.
We also initiated a review of other financing options to access more cash including amounts available under our current credit facility.
We reduce future plan inventory receipts by approximately three hundred million dollars.
Retaining orders on the most critical new and core products.
This quick action underscores the flexibility of our supply chain and will enable the preservation of cash while reducing future exposure related to excess inventory.
We now expect inventory to be down at least forty million dollars by the end of 2020.
We postponed $25 million dollars of capital expenditures until business conditions stabilize.
It's suspended share repurchases for the remainder of the year.
With extended payment terms with various suppliers.
including our Factory partners
in addition to cash preservation measures
We have quickly adjusted our cost structure to align with a conservative you a future demand based on an uncertain recovery path.
Within two weeks of pay an impact. We took decisive action to reduce operating expenses by approximately one hundred million dollars for the rest of 2020 while creating a new go forward infrastructure that reflects the future needs of the business.
Our ability to take such quick and meaningful action is a testament to the flexible nature of our operating model and the relatively low fixed cost structure of the business.
After the recent adjustments over seventy percent of the companies cost structure would be considered variable.
With less than four hundred and thirty million dollars of semi fixed costs.
Has recently announced we have implemented selected compensation changes for the company's leadership team and management and if furloughed some team members, we've also flattened our leadership structure to reduce costs and make organization more nimble.
We have reduced other discretionary costs and continue to negotiate with landlords on our long-term lease Arrangements.
During this time. You have sharpened. Our Focus related to marketing spent on digital activities based on the growing strength of this Channel and on other Revenue driving practix to optimize marketing efficiency.
This approach is delivered excellent results so far in Q2, including over one hundred percent increased demand for our own e-commerce business over the last two weeks.
The discipline cost reductions and other liquidity measures will result in over five hundred million dollars of cash preservation and 150 to 200 million dollars of operating cash flow in 2020.
Many of the actions taken will also benefit future years and we are beginning to turn our attention to additional measures that were will further strengthen the company's liquidity and strong cash generation.
The end of q1 total liquidity was approximately 1.2 billion dollars including uncommitted incremental borrowing capacity of approximately 760 million dollars under our existing credit facility.
Our bank to find leverage ratio was 2.64 times at the end of the quarter. Well below the 4.5 times ratio required by our covenant agreement.
based on our current projections
We expect to be well within our leverage ratio requirements and in full compliance on current debt covenants for the remainder of the year.
The current uncertainty created by the global pandemic means that visibility to a recovery path remains Limited.
There are many factors outside of our control.
And this makes it very difficult to provide specifics on our outlook for the second quarter and Beyond.
As a result, we will not provide an update to our guidance for the year and will revisit this and condition stabilized.
We can say that recent decisions and a proactive approach have put the company in a healthy financial position.
With very strong cash flow projected for the full year.
We projected are combined e-commerce and third-party online businesses will represent between 50% and 60% of the company's Revenue this year.
And this channel is expected to grow nicely in Q2 and for the full year.
Also based on the timing of recovery for certain markets and the nature of our third-party distributor model. We expect our international business to perform better than our traditional us home distribution.
We expect our Maryland Saucony Brands to perform relatively well in this environment given the nature of their product offerings. We also expect relatively good results from our work brands.
The volatile demand environment has put a premium on operational excellence.
And our Diversified business model.
These are both strengths of our company and will greatly mitigate future risk.
a stabilizing factor in today's uncertain Marketplace
our portfolio of brands
serve many different core consumers and offer several important performance and lifestyle product categories that are relevant for this time our broad Geographic reach lessons the pistol impact original headwinds. They may develop in any given Market.
Within the US market our penetration in the healthy online Channel continues to grow while our Reliance on other Wholesales channels is well Diversified with no sim Channel representing more than 15% of the total.
in addition
the companies relatively low fixed and capital expense structure is very efficient and enables flexibility to adjust quickly as evidenced by immediate actions taken in the first quarter.
Our supply chain is Nimble and will allow us to adjust to demand without significant risk to our gross margin profile.
Our wholesale distribution model relatively small owned retail footprint and focus on e-commerce channels results in lower Capital needs reduced inventory came in very few of these commitments.
Likewise our network of international Distributors enables broad reach around the world with very limited inventory and capital investment and an efficient operation structure.
Internally are shared service and Matrix organizational design cultivates functional centers of excellence and creates expense energies that are leveraged across the business.
I've been with the company for over two decades and if witnessed our ability to weather difficult times.
The current circumstances may be unique.
But our incredible response is nothing new.
We have a team with experience toughness and discipline.
This sound operational Foundation is going to serve us very well over the coming months and I am very confident in our ability to emerge from this crisis as an even stronger company.
Thanks for your time this morning, and we will now turn the call back to the operator.
Thank you at this time. It would be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your life is in the question queue. You may press star to if you would like to remove your question from the Q4 participants using speaker equipment. It may be necessary to pick up your handset before pressing the same Keys. One moment, please while we pull for questions.
Your first question comes from the line of Jim Duffy with stifel. Please proceed with your question.
Thank you. Good morning. Everyone. Hope you guys are doing well. You guys job with the call and thanks for all the thoughtful perspective on the business. I wanted to start big picture of crisis has a way of accelerating change and Industry structure you wave their hands of this with your macro commentary, but what's Wolverine's vision for what the industry will look like on the backside of the Spanish-American. How are you positioning to strengthen your competitive position in that landscape?
I think it really varies a region-by-region around the world. And obviously the US is trailing by a month or a couple of months China and some other regions. I think is the US market comes out of this you're going to see an impact on brick-and-mortar retailer for retail for sure. You're going to see the same summer probably accelerate a shift to online bind including categories that were a little slow paced at first food at home delivery for a central that sort of thing. So I think uh some retailers that are going to emerge from this are going to have a much smaller brick-and-mortar footprint. I think the world will companies that have not already scrambled do Embrace digital social and e-commerce will do so some of the companies like birth
Should have been focused on this for some time. Well.
Certainly have a an advantage here. So it it's hard today. I don't have a crystal ball and predict everything that's going to occur or might change a year or two out. But I think there's going to be quite a few changes in consumer behavior in the overall brick-and-mortar environment for sure.
Okay, thanks and more near-term Focus. Can you talk about how you're planning inventory receipts for the balance of the year how you thinking about merchandise assortments to balance newness versus managing risks and the promotional strategy to manage inventory levels.
Yeah, I would say some of that you saw the current situation is unprecedented. But we've been around here in the Great Recession slash Financial collapses and. And some other things. So the first thing we did very early on early in March we decided to start to shut off the inventory. The second thing we did was start to communicate on a weekly basis with our key retail customers because every one of them is in a slightly different position most brick-and-mortar stores have closed in the United States, but the e-commerce businesses largely remain open in a few retailers still remain open. So we tried to kind of draw the line and then take an immediate look forward as to what the retailers of thought they might need.
As we finish off the year so that involved on our on our part shutting off the supply chain reissuing orders on new product off items things that are retailers thought they were specifically going to need and generally working closely with our our Factory based to minimize the impact project on the inventory side Q2 will be the hardest quarter for retail in general here in the United States. It'll probably be the quarter we where we have our highest wage increases for the year, but we moved quickly to keep that in line and make sure that we're in a good position in queue is 3 and four this year. I think I would talk to that to Jim that you were called. Most of our brands in the portfolio. Have a very strong.
Mix of core and carry over inventory. So the fact that that our our portfolio is is not highly fashion oriented or even whether or seasonally dead-ended we do definitely have some spring and summer merchandise that were holding right now for retailers that will probably hang on to 4 for next season for next you know for the next spring and summer but fundamentally that the the nature of our our business in in that high carryover rate, which is probably over 65% across the board means that off the clean inventory. We started the corridor with the cancellations that flakes talked about on some of the Fringe items is really going to make our inventory fairly fairly healthy and fairly odd valuable to the to the market I think going forward we've taken cancellations to keep inventories in the channel as as low as they can be although they're they're elevated right now for sure with all the closures dead.
but we've worked closely with the
For retailers on that and so I think that the combination of actions were taken and just the nature of our inventory would would say that you know, we're not going to be as exposed to markdowns and promotions maybe as you might think although we we certainly anticipating some of that in the back half of the year.
Very helpful. Thank you guys and good luck.
Thanks.
Your next question comes from line of Erin Murphy with Piper Sandler. Please proceed with your question.
Morning, and hope you all are staying safe. I guess the first question is just a continuation of the last is it relates to just the current promotional activity in the US market? Can you just talk a little bit more about being in the industry relative to past recessions or periods of significant challenges and then what is your expectation as if you go throughout the the summer for just the overall promotional activity given your page comments on cue to inventories.
Yeah, I think well, it's it it's not a secret inventories are high at retail and both private label and for Branded products. So we're seeing promotional levels today that probably are greater than those that we saw during the Great Recession 2008 2009. We thought we would expect some of that promotional activity to continue for a little while here interestingly enough. It's it's just the opposite approach that's working for us today and our own business. So yes, we have things on sale. Yes, we're overstocked on a few items brand by brand but fundamentally we've taken a full price approaches and a keen focus on newness and product and the messaging to the consumer.
Pivot on our messaging to the consumer in this environment for us. That is that's delivering a high degree of success. So we do see some retailers out there that I won't say it's panicked promotion time, but if that's how it feels to us, but then again we took our retailers out there that are dealing with cash-flow issues liquidity issues balance sheet issues that we are not as a company so we don't like it Franklin is brand owners, but from a logical standpoint, we understand it.
Okay, I got to your question. I just curious how you answered it. Yeah, so I guess the second question I have just if we could just unpack you want a little bit more. I don't know if it's that down 16% decline if you wanted to look at Jamshed together versus March just so we can understand kind of the run-rate of the business exiting March and then I recognize your not guiding the p&l but the money flow through in q1 wasn't as bad as we would have expected on a down sixteen. So it maybe just some of those expense, um, kind of pivots you've talked about but just curious I guess Mike for you is that the level of kind of flow we should assume for Cutie once we kind of, you know, rebalance the top line for Q2.
Yeah, I think.
The mix the mix everything changes, you know, I mean we only well, let me answer the Q one question first. I mean sure as I mentioned in my in my comments March what's going to be the strongest month of the month for us as as we had planned it it would be, you know, based on our Outlook. It was going to be about 40% of the full quarter and we started to see some real softness. I know storage didn't close until maybe the middle of the Court per se but the traffic levels the declines we were seeing in e-commerce and and and other Trends really started to you know, magnify maybe early March first week of March or so, and and those were the reason we were getting from the wholesale Channel we started to see delays and and cancellations at that point. So I'd say March was going to be our biggest month. It had the most impact obviously off. So the declines that we saw there on Revenue were were were sort of in line with what we would have expected as it relates to the the the flow-through. We only real birth.
Had a couple of weeks to adjust certain expense and and kind of just managing through on cash flow and managing the business in the in the latter part of the corridor wage. Obviously our margins in our in our econ business are really strong our operating profit our operating margin delivery on that vertical business is also very strong. It's accretive to our own margins. So that is that mix continues to strengthen, you know, we'll that's going to be a positive force going forward but we have puts and takes frankly here in for a quarter that are different. So the the flow through and the margin profile the operating margin profile for each quarter will also be different but I would say, you know the actions that we took in March the The Exchange options that we announced today as it relates to, you know, compensation related costs discretionary expenses like TNT some of our advertising reductions and Thursday.
Employment, you know those are going to those going to flow through for the balance of the year as well. They'll be benefits benefits in the back half of the year as well on those same same class reductions, but I wouldn't necessarily take the the queue on E. But uh flow through to be representative of the rest of the year at least not by quarter and then just the last clarification. I guess you've talked about April, you know triple digit growth that he can always for the last two weeks. Is it fair to assume that just given the up to up ticket e, is the overall run rate of the toll business in April better than that of the last week of March or is the brick-and-mortar still is it not fully offsetting or not fully, you know starting to improve
Yeah, I think for the market is the whole April will be very challenge for the US market and thanks stars are going to remain closed for a virtually the the entire month maybe a few will start to open up at the at the end of this month, I guess for the market as a whole wheat we have seen the stimulus checks that have gone out seem to have an have had a pretty good impact on the Footwear industry in the Footwear sector that is encouraging and for us though we see our continued focus on digital and e-commerce is continuing to pay dividends into April and and throughout the rest of the year, right definitely benefiting from the shift and the the consumers access to retail but you know, we want to be super clear. We think you two is going to be the toughest quarter for for us in terms of Revenue growth based on the fact that we had.
I shut down in in.
Markets around the world. So while we're benefiting from that shift on our own online business and seeing some lists with our third-party online business as well as we mention, you know, I'm not going to be a you know, our our most challenging quarter at least as it has its projected out this year.
Thank you very much. Thanks for the context.
As a reminder. If you would like to ask a question, please press star one on your telephone keypad in the interest of time. Please limit to one question and one follow-up then re-enter the queue for any additional questions. One moment, please while we pull for more questions.
Your next question comes from line of Jonathan, with bared. Please proceed with your question.
Yeah, I think you maybe just a follow-up. Is there any way you're willing to even just put broad brackets around what you've seen for kind of total sales so far in April just to touch base line that we can make assumptions off of and then curious just any thoughts on the state of the order book and more Curious how you're planning inventory for the rest of the years. Just curious. You know, how how customers are reacting and how you plan to adjust this the business thinking out that the fall holiday in terms of the order book.
Yeah, I would say for for April it's it's difficult and probably impossible to give you any guidance in that regard right now. We do know what we know about this lie, and that's that our e-commerce business continues to perform and then we have a few retailers with some brick-and-mortar that are open a few one or two sporting good players off the farm and fleet Channel largely remains open right now, but that's about all the the inside we can give you on on April right now. We do know that on a state-by-state some of our retail customers are planning to open a few stores the end of this month and hopefully that will accelerate on into May and June with respect to our order book. That's obviously remains in a state of flux. I would say the main thing we're doing there is we're trying to over communicate with our retail customers right now,
To get a view on their business. I think they are all also searching for answers and tried and trying to navigate the this environment so long. It's a little bit murkier there than it might otherwise be but we're trying to certainly adjust our order book. We've already adjusted off our inventory position and supply-chain inflow our supply chain right now is fully operational. There's plenty of capacity. So we feel we're in a pretty good position to quickly adjust when the retailers begin to have some additional Clarity on their business.
Okay, understood. Thank you. And then just one follow-up on the the comments about the e-commerce mix when you look at the business, you know, what about a billion and half of Revenue in 2019. Can you can you make me just clarify how much of that was? Uh, you're you're owned Ecommerce forces third-party e-commerce. And then are you expecting to see similar types of growth rates for your third-party e-commerce partners that you're seeing and the company Channel
I would say right now. Our our own e-commerce business has been outperforming the businesses of a number of our third-party customers mujhe pure plays or our wholesale customers that have e-commerce business. I think that Gap has narrowed a little bit with the stimulus checks start hit the bank accounts of us consumers, but are certainly our our e-commerce business has been a leader in in to stand out here and we're we're trying to do what we can in terms of inventory flow stories digital content to help that business of our traditional customers with respect to 2019 are e-commerce business domestically was about 230 million dollars. They collected e-commerce businesses last year of birth.
Our customers would have been bigger than that. I don't have the figure right in front of me, but it would probably been a third bigger than that. So often we think that channel obviously in this environment is going to accelerate in that acceleration is going to continue.
Okay, very helpful. Thanks and best of luck.
Thank you.
Your next question comes from line of Dana telsey with telsey advisory. Please proceed with your question. Good morning everyone and hope everyone safe and healthy as you think about expense structure. How do you break down the fixed versus variable component? And how do you see that changing in the future? And then I believe you were thinking about price increases summer time in the June 2020. Does that get delayed or push back now and do any new product introductions and InStyle introductions. How do you think about those going off the remainder of the Year? Thank you.
Sure, I'll cover the the fixed versus variable, you know, obviously it's one of the it's one of the factors, I guess attributes of the business model. We have that. Going to be especially important in the in the coming months in the coming quarters. We have a very highly variable supply chain structure. As you know that we we don't own factories. We we Source everything from third parties. So over 95% of our our product costs are really variable costs related to third-party inputs. So that's important to note. We mentioned in the call of the day that including some of the the cost that we have in the business to support our supply chain and Global operations group and then other other costs fix what we would call Semi fixed costs in the in the brands or within our corporate structure that's been reduced to about four hundred and thirty million dollars a phone number.
the reductions that we took
This year so 430 million dollars of what we'd call Semi fixed costs. So overall in terms of the the the total cost structure of the company took over 70% of that would be variable costs. So I think a very Nimble structure as we kind of deal with the concerns and and risks and uncertainties of demand in the future. We feel like we can adjust pretty quickly and as Blake said on the supply chain side we can do the same. We now readjusted with the opportunity for them accessing more capacity of demand materializes and the back half of the year. So a very Nimble on very Nimble structure on the new Styles and and in that I let Blake kind of speak to change our Focus their I do want to say as we focused our production needs in the back half of the year. We have been very careful to protect where we think each brand has important new age.
Product to introduce whether that be through online channels or through their normal distribution channels to make sure that that product is still flowing and obviously are strong position Encore inventory home carrying over from the first quarter will help us be able to to lean on that as we focus a little bit more intently on newness. But yeah a day and with respect to price increases those were communicated much earlier to our customers. We don't anticipate any big withdrawal from that from our policy from our decisions there. So I think to a large extent those prices are going to flow through as originally intended and with respect to style introductions, I guess in the current environment certainly short and mid-term. We're focused on continued newness. What do we need to do to feed our online business? What do we need dog?
To to make the online businesses of our pure-play customers and our wholesale customers exciting and fresh. So that's our number one Focus right now. I'm certainly we've had a few retail customers that have come to us and said listen some of your newness in my stores. I'm going to probably have as newness in my stores and Sprint Samsung m2021. So they are sitting on some inventory there. No warehouses in their stores or in flowing in and they can only digest so much money in their physical store on the other hand. We know from our experience right now that the consumer is really responding to newness and a different messages. So we're not going to slow down anything there. We're going to continue to feed the our eCommerce business in the e-commerce business of our partners and we'll we'll be able to give birth.
Supply chain, we're going to be able to adjust.
We we no more a month or two from now and one quick follow-up is you think of your channels or distribution with wholesale and in your own retail excluding e-commerce off the Commerce Channel, how do you think of door doors in wholesale and your own retail operations is their opportunity either forced or resets in terms of occupancy costs. Is it relocations? And how do you think of being about rent and then on your wholesale channel for third parties? How do you think of that? The the big department stores versus the other wage dependent that you service? Thank you.
Yeah, maybe your latter latter part of your question first. You know, we're we're very Diversified. We don't have if you set aside the online business, we don't have a single Channel That's 10% of our overall Revenue. Probably our online channel is approaching 15, maybe 20% or more this year but said that aside even in the US for example department stores would be mid single-digits to high single digits of over all across all of our brands of our Revenue. So we have only I a handful at most of customers that would reach 4% 5 percent of our overall sales and our distribution channels are are are wide and and pretty evenly balanced. So from our standpoint. Anyway, we think that mitigates risk and puts us in a pretty good position dead.
We do know we do expect so be some retailers that will be coming out of this crisis with your doors. We do know that there's a few retailers that are highly leveraged and that could present some unique challenges for those retailers. So we've we've built some of that into our plans as we look ahead of certainly for the rest of this year with with respect to our own retail Fleet. We have about 90 Plus stores today. They're all closed here in the United States. They may start reopen Stone Age by state over the next month or two. I think the current crisis has the potential to alter the traditional relationship between Canada and landlord. I think you're going to see a growing Trend to more a percentage rent deals and not fixed rent deals wage.
Going to be we're all in this together, right and we're not a big player obviously in brick-and-mortar retail, but the landlords and and the brick-and-mortar store operators are all in this together, but I think you're going to see some interesting Dynamics in that regard here over the next nine or ten months.
Thank you.
Your next question comes from line of Matthew Lewis with keybanc Capital Market. Please proceed with your question. Good morning. Thanks for taking your questions and thoughts are all doing well on the cash flow. Obviously, it's it's very impressive. You're expecting those those strong positive numbers this year. I was wondering if you could talk through and if it's possible to bracket some of the orange book and and monthly cash burn assumptions behind your your operating cash flow projection for the year.
Well on the order books I Blake reference that already. I mean, we we were obviously seeing that change daily and we're working really closely with our key accounts there Matthew to solidify the demand but also to Monitor and work to correct as as we go forward, there's still a lot of uncertainty in the market. And so and we recognize that and and we we recognize the back in order to book now is maybe slightly less informative than it would be a normal times as it relates to cash flow. We we had a you know as normal in the first quarter. We had a a use of cash in q1. It was significantly better than it was a year ago. When we think about the next three quarters, we would expect you to be sort of a neutral court with with improvements in each of of Q3 and Q4 from a cash flow standpoint much of that's being driven off the the benefits that will get later in the year.
As the cancellations of of incoming receipts that we talked about start to crystallize in the inventory in Q3 and Q4. So Q4 will be our strongest cash flow quarter and Cuba Q3 will be very positive while will be sort of neutral.
Okay, thanks. And and you mentioned before four states that are beginning to reopen their economies you plan on reopening your stores there? I'm soon so you can can you talk about that process on deciding the reopen is store and how quickly can you reopen a store after your you decide to do so?
Yeah, I think stores can open on a fairly quick whether it's our stores or the stores of our customers fairly fairly fast pace, but it really depends state-by-state and as we've learned here in Michigan, there's vast differences just within a single stage in how the covid-19 has had an impact. So we think it's going to be sporadic. We think retail stores us will start to reopen here, uh, a few at the end of this month. Every state has a slightly different Playbook. I guess if I want a haircut or a tattoo, I've got to go down to Georgia this weekend to get that but but Michigan is taking a pretty thoughtful approach wage.
based on the facts
Based on the data based on health advice on the other hand. We all know that there's going to be no vaccine here likely for 12 months maybe eighteen months. So the economy is need to has to be reopened in the thoughtful manner. I think when retail reopens you're going to see the use of a lot of people you're going to see a lot of gloves. You're going to see a lot of face math. I do not think we're going to get to this the stage where a few countries have around the world where you have to where you have to go to a police station and get a signed letter before you can go to the grocery store or put gas in your car or go to a pharmacy. So I think we're going to be a little more open than that, but I think this is going to be a gradual process for our our Market. I think you're going to see it built here in Georgia.
Okay and June, but we are also looking at as you know, we have pretty extensive operations in Europe. Those countries are probably a month or two or maybe a little bit more ahead of us stores are starting to reopen in various parts of Europe. But again, there's been different approaches country-by-country, but I think the world here is going to find a way to reopen the economy. I think it's going to be a bit gradual. It's not going to open with a bang. It's not going to be a flip of a light switch that's going to change things immediately, but the world needs to get back to work because lives are being destroyed served by the virus, but they're also being destroyed by the complete shutdown of economy. So I think we're going to see a balanced approach again whenever in my career I better off.
The US consumer I've been wrong. So again coming out of this crisis. I wouldn't necessarily bet against the US consumer.
Thank you.
Your next question comes from line of Chris Padilla with wedbush. Please proceed with your question. Good morning everyone. Thanks for taking my question. Doing. Well first just on the international side, maybe some color about what you're seeing more specifically in some of those European markets or subsidiaries is more specifically how your distributor Partners reacting their inventory levels. Um Etc. Just some color about what what you're seeing there.
Yeah internationally. I would say Europe was probably our standout region in q1 driven a lot by a very good performance by Merrill Edge performance by Saucony and some good growth across some of our other smaller Brands, but primarily a Saucony and in Merrill Italian stores are starting to open up as we speak markets are starting to open up as you know, the UK France Spain and Italy were pretty severely impacted. I know that kids are going starting to go back to school in Denmark Sweden, for example, really never shut down their economy and total but that's a unique population in the unique country in that regard smaller country in Germany is starting to open up France at the moment.
Is remains in up.
Pretty tight lockdown state but I think the European markets will reopen differently country-by-country and they're starting to do that already dead. We also have looked to China as you know, we have a joint venture Venture in China and certainly that was delayed a few months. But the China Market is also starting to a reopen the consume the stores there are not back to normal pre-crisis levels when it comes to their volumes, but the consumer is out. There's a lot of p e and the marketplace walls are starting to get some traffic again. But again the consumer in China's taking a little bit of a month, you'll taste to come back to a brick-and-mortar. Anyway online in China remains, very strong.
Like it is for us our distribution Partners just answered that part of your question many of them have been with us for thirty forty fifty years. Most of them tend to be very large the preeminent businesses in their markets. Certainly, they're facing some of the same challenges of we are but I think overall our own National Distribution network is going to hold up pretty good in this environment.
Okay, and just on on the overall sort of order book and the cancellations you've taken on on inventory commitments just a level of visibility when you talk to your Retail Partners whether us organ, where did they sit at this point? In other words had they canceled receipts into fall or are they just focused on spring summer? In other words how far out are gone and your communication with them shutting those receipts and as a result of that you caught on the supply chain side incoming incoming product.
Yeah, I would say we tried to be proactive on their behalf right now. They're in if it's only April. We're still in the middle of this in our office here in the US. They're learning every every week what maybe to expect in the future but the future is a little murky for them. They don't know when their stores going to be fully operational and a lot of them are sitting on a lot of inventory whether it's consumer soft goods or or or other Goods. So we're trying to keep and have us a newness and freshness for them when they open we know they're going to need some of that on the other hand. A lot of them are going to have to clear some inventory that is back up here before the shutdown. So it there's it's murky right now a little bit on their start. We tried to be proactive to help them on the supply chain game.
And we'll know a lot more.
Certainly in a month or two for our Market. We used to have plenty of time to get back into business on any additional demand for especially for late Q3 and Q4 at this point. I'm Chris. And so I mean that's that's just really important to to appreciate that. We we took a dramatic approach on cancellations of our own production, but it doesn't have to be permanent but we obviously need to move quickly so that we could be responsive to any downside risk right at the moment. The risk of having too much is greater than the risk of not having enough and that that's probably going to exist for a. A month right now. I'd rather have you cut more now and Chase if necessary, I guess the general observation a final question, um, just on the 200 million and operating cash flow up. I think previously you're talking about 150 what drove the increase and I guess like more specific time.
What are the drivers working capital you mentioned inventory down forty million at year-end. Obviously, that's a plus to that operating cash flow. Any other color you can give about some of those other working. Items are what drives that 200 million. Yeah, it's you know, obviously we've got some some cost reductions from the expense reductions that play into that the way we're managing money-managing are working capital not just inventory. We're obviously extending terms with our factories and some other key vendors on our payment terms, which is helpful to the overall wage working Capital Management, you know, we have a number of other of other initiatives going on that between when we initially announced the cash the cash flow Outlook a couple of weeks ago we've been able to I guess crystallized those and stabilize those projections. So we're a little more confident than we were a couple of years ago a couple of weeks ago on some of those numbers. So so why we moved
Slightly raised our Outlook there, but you know fundamentally it's a multi-pronged approach Chris and you know, the good news for us again is we have a number of things that we can influence and that can be influenced by quickly that will have a positive impact on our cash flow. We're also starting to look obviously into twenty Twenty-One now, right? So we as Blake said in his comments are the second kind of a long time frame we were focused on in our sort of an our management plan here was was the remainder of twenty-twenty which is reflected in this cash flow Outlook, and now we're beginning to forget about the other measures will take for next year to continue to manage working capital to Pivot our investment strategies around in even stronger e-commerce platform to work more closely with our International Partners on on their distribution plans and on their business models for 20 21, so well obviously be able to provide more insight into that and future wage.
Orders that just you know, kind of rest assured. We're we're we're looking well.
Beyond 2020 right now as it relates to the the health and ongoing positive cash flow for the business.
Understood thank you very much and and all the best.
Thanks.
Your next question comes from line of Mitch, It's with pivotal research. Please proceed with your question. Yeah. Thanks for taking my questions. I guess. I got a few hopefully we do this quickly son close out of curious. Are you guys not expecting a lot more spring summer Closeouts this year than last I mean you've had orders canceled on you but then you've canceled receipts and Mike made the comment that I think like 65% of your your your lines are are carried over. So I'm just wondering if you don't expect that to be in maybe as much of an issue in this quarter.
But wasn't it wasn't in q1 or you know right now in Q2 for the same reasons most of the typical retailers that would would handle are close outs are also took down right now. So that's something that will evaluate once that particular Channel opens up again that typically isn't a strong online business or an online channel. So we're well it'll be wait and see but as far as our inventory is concerned I think again came into the quarter with pretty clean inventories. We've been managing that very closely the way we would typically think about it and you know a style that might be on the last Innings of its life cycle might change a little bit as we think about spring summer merchandise. So to Blake's point, we may be seeing some of that product over in the spring summer a little longer than we normally would so that would also reduce our exposure there. So it in our in our Outlook right now, we wouldn't expect close-ups to be significant.
Like higher than they were a year ago, but that's all obviously very dependent on what transpires over the next three or four months as it relates to the retail Channel got it and and as much of your whole life customer base at risk, I mean, are you guys pulling back on some accounts that you might view at risk in any changes in terms of your allowance for doubtful accounts? And then I have one last Quick one month. I think on the credit side. We've been very very very aggressive. They're very conservative. And in terms of the way we're thinking about credit risk managing managing those terms where we can walk. You know, we've we've been over the last couple of years very very careful with respect to our distribution, even in those department stores or other channels that maybe aren't as strong. We've been focused on the best and most active stores within those within those chains. But yeah, we definitely expect there to be some more risk in that area. We took some additional reserves in the first quarter to cover that wage.
For that at least where we have visibility but I mean like said it before we we just have such a a diverse distribution of in our US market for our Wholesale Club. It's it's and it's the strongest categories for us are the online channel the Family Channel which is which is doing relatively. Well, we expect to continue to do relatively well and sporting goods and outdoor retail which in this particular environment, we think again will be will be a stronger channel. So those that's where we're mostly focused and and frankly see less than a year or less risk our exposure to the department stores is well below 10% in terms of our overall audit and then lastly you spoke to the relative strength of Merrill Saucony off of work, and I know that you don't typically speak to the size of those businesses individually. Just giving your your you break out the segments but given these sort of unusual surge.
Chances, I was hoping you might be able to.
The size those for us maybe like 2019 revenues. I know Merrill is your biggest business so I can either I think number three but maybe some more specific numbers around those would be helped just to give them give them contact.
Those are certainly are three largest businesses. You have the order correct? I'm not sure that we wouldn't normally give out that level of detail. I'm not sure any numbers in 2019 are going to be that much relevant for this year. Maybe a little bit more. So for twenty Twenty-One, so there are three large businesses. I would say on the work side. I had I had frankly expected to see some additional softness in the work category given the oil and gas situation around the world and here in the United States. And that is that's an area where we've been kind of pleasantly surprised how that business is held up. Maybe it's been some of the more rural stores staying open. Certainly, it's higher Demand by any number first responder categories wage.
That business held up pretty darn well and the q1 better than frankly. We thought it was going to do given oil and gas and that's across that, you know, our marriage brand but a Wolverine and in cat and baits and any number of Our Brands and as we said before that's that's 15% of our Global Revenue that particular category. So it's definitely you know, it's definitely Under Pressure like every other category, but is it is it relative Trend? We're seeing some some really positive signs there. So I I think overall overall we're we're we're very happy with the categories and the and the consumer Target that are Brands kind of focus on right now based on the current situation. You've got it right. Thanks guys. Stay safe.
Your next question comes from line of Will Gardner with Susquehanna. Please proceed with your question. Thanks for squeezing me in here and I hope you guys are all staying safe and healthy and Thursday as well. I guess. Can you just give us some more color on why you made the leadership changes and and and how you think that that will help the the brands recover, you know, once we're on the other side of this Earth Crisis and then and I guess connected to that what if any if any other brand leadership changes, have you made other than what you've announced? Thanks. Yeah. I'm well, as you know, I've had the boston-based brands reporting directly to me since June of 2019 and that was a little bit of a purposeful experiment and I think we saw a number of benefits from that. So getting rid of our former our formal dead.
Empire our key with something
It was in the mix for some period of time it maybe it was accelerated a little bit by the covid-19 crisis, but we've had that in the middle for some period of time. We just saw a number of advantages of not just myself but the senior management team getting closer to Our Brands. The message was a clear the direction was clear from the back and forth was more immediate whether it was me or Mike or several other of our with our senior people so that decision to eliminate the kind of formal group structure and Elevate three of our brand brand people. Mm. Most senior management team our executive leadership team. That would be Joel and Chris hufnagel and Tom Kennedy. I think that's going to pay benefits for it certainly over the last month.
Six or eight months I saw that as I've made for the most part weekly trips to Boston and dealt directly with our Our Brands in our brand leaders and wage in Boston. That's the primary reason we did it more Nimble more quick faster speed in clearness of strategies and directions.
And we we have had some other management changes in addition to that structure that we laid out in our formal press release Barney delpriore is going to be leading both the kids brand and the kids group for us out of Boston Jillian. Nick is going to be departing the company probably at some point in the future Kate Pinkham who started as you know started out in our our semi area that's consumer intelligence consumer insights Market intelligence group home. She's going to be leading a hush puppies. She's done a tremendous job in a hush puppies instead of marketing for over a year Greg. Tony is going to be leaving the business. We moved chipko from Chaco to cat Footwear and moved up Todd Gordon. Somebody who's been with the charcoal brand for many many years.
And then we elevated South Cobb to run Bates. So we've had a a number of other changes and off switches of seats. I guess that have occurred related to those bigger organizational changes things. We've been thinking about for a long period of time and just one other follow-up. Can you can you just I think you you guys glossed over a bit, but just talk about payment terms that you're giving to life partners.
Are you extending them? Well, and it's a case-by-case basis. Well, I mean it has a lot to do with whether they're still open for business or not. It has a lot to do with the commitments. They're making on future future deliveries and other things we do not have a one-size-fits-all approach to that. I will say I think we've been very we partnered with all of our key key customers and all of our key Partners to try to balance the the challenges here as much as we can and and and we we've been working with all of them to find the right, you know right recipe for that as well as we move forward but also say it's something that we you know, we believe will change once the once the Retail Landscape or the retail market place opens back up. We'll we'll continue to monitor that almost on a regular, you know weekly basis or monthly basis at the very least. So we we have I guess a pretty customized approach depending on which account where we're dealing with.
Great. Thank you.
Thanks. Well.
Your next question comes from line of Steve with cl King and Associates. Please proceed with your question.
Good morning, Blake and my congratulations on your stamina. Nice long call. I will only ask one question. I'll keep the balance for our offline conversation from a direct, and wholesale partner e-commerce penetration. What was that number in fiscal nineteen again on a global basis your direct econ and wholesale partner Eco penetration in fiscal. Nineteen. It was about 40% of our us holes, or are you s total us business last year?
so
Okay, I'll take it off. Thank you.
Thanks.
Ladies and gentlemen, we have reached the end of the question and answer session and I would like to turn a call back to Paul fine for closing remarks.
On behalf of Wolverine worldwide. I'd like to thank you for joining us today as a reminder. Our conference call replay is available on our website at Wolverine worldwide. The replays be available until May 22nd 2020. Thank you and good day.
This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
Thursday