Sweaty Betty revenue declined 2.4 percent, or 2.7 percent in constant-currency terms, to 40.3 million in the second quarter, reflecting parent Wolverine Worldwide’s planned and ongoing reset of the brand’s U.S. business. The brand reportedly delivered another quarter of growth in UK direct-to-consumer (DTC) and International Wholesale, reflecting encouraging consumer response to a broader product assortment.
“Sweaty Betty is one of the original female activewear brands and focuses squarely on empowering women through fitness and beyond,” said wolverine Worldwide CEO Chris Hugnagel on a Thursday conference call with analysts. “Last year, we fully integrated this business into Wolverine Worldwide and developed a new strategic growth plan. As part of this effort, and as noted previously, we initiated an intentional and strategic reset of the U.S. market in the third quarter of last year.
Hufnagel acknowledged this resulted in the decline in brand revenues in the second quarter As a result, but he also said the brand encouragingly grew approximately 3 percent when excluding the impact of the market reset in the U.S.
“The areas of the business that we prioritized are responding positively and contributed growth in the quarter,” he noted. “The UK direct-to-consumer business grew mid-single digits, with continued increases in key categories like bottoms and outerwear. We’re seeing our investment in the brand’s new store design lift performance as well, with four refits completed so far this year. The expansion of Wholesale and distribution partners in Europe and Asia Pacific also continues to advance, with revenue up strong double digits and discussions for new partnerships progressing well.”
The CEO highlighted several activations executed during the quarter to continue “to strengthen its bold, rebellious voice in the marketplace.”
He said the Born Sweaty, Go Shorty campaign increased purchase intent and helped drive strong revenue growth in the shorts category. The brand also effectively positioned itself relative to popular activities, including running with its Rule the Run event in April, and racket sports with its Power by London Padel event in June, and a Wimbledon event in July, all driving strong consumer engagement for the brand.
Hufnagel said the Wolverine Wolverine team worked really hard about this time last year on a strategy for the Sweaty Betty team, spending a lot of time in London with that leadership team and it really came down to several key moves that he said they had to go do.
He said that included doubling down on what they thought was most important and that team has done that work and executed with great determination. Hufnagel said he was encouraged by some of the early results.
“We’re seeing some improvements in our UK direct-to-consumer business, and that is a little bit of a challenged market right now, just in general, that consumer, but [we are] pleased with the performance, both at sweatybetty.com as well as in our stores,” he detailed. “I’m really pleased by the evolution of the product pipeline, diversifying beyond just the leggings business, more bottom silhouettes, mid layers, the outerwear has been very good. And then really sort of taking back its rebellious voice and having a distinct point of view in a very competitive market. So really well done there.”
The company finished the integration of Sweaty Betty into the Wolverine Worldwide portfolio last year. Part of that move was to plug that business into Wolverine Worldwide’s international 3P market, versus trying to go do it independently around the world.
“That has sort of paid off with some early gains, encouraged by some of the recent progress seen across Europe and into Asia Pacific,” Hufnagel shared. “And I’m excited about the prospects for what that can mean for that business as well.”
He said the U.S. reset really began to happen in the third quarter of last year the brand will shortly lap that, which will provide some easier comparisons.
“So I remain optimistic about where Sweaty Betty is, the improvements we’ve made,” the CEO continued. “All of that said, they operate in an attractive yet fiercely competitive category, and the UK market certainly has been under a little bit of pressure over the past handful of months, but [we are] optimistic about the new strategy. The early results that we’re seeing, every time I’m with that team, I think the product gets better and better and really pleased with the stories they’re telling in the marketplace.”
He closed by saying the Sweaty Betty brand is healthier today with a strong strategy in place and a determined team driving the business forward. Hufnagel commented, “We have more work to do, but I’m encouraged by our progress.”
Looking ahead, Sweaty Betty is expected to decline in low-single digits for the year.
Image courtesy Sweaty Betty Victoria Square, Belfast
