And we’re still looking for some key talent. We’re still looking for marketing leadership in Saucony. We’re looking for some key brand talent or product talent in some of our brands as well. So I’m very pleased with the progress that we’ve made. I think we’ve taken the right and necessary steps at the same time there is work to go do, but I think we’re approaching it with great pace and urgency and also attacking the most important things first. So that’s where we are. So we’re not completely done restructuring. We’re not completely done. The dust hasn’t all settled yet, but the team has done a phenomenal job sort of reacting to the call to action and then importantly, posting the results and driving the business each and every day.
The marketplace inventories, I think the market inventories continue to get better, which is good, and sort of become a little less promotional, especially for us on our dot com business, which is encouraging. There are still pockets out there that are a little bit heavy and it also varies a little bit by channel, by channel too. So certainly improved, albeit not perfect yet, which is one of the things that we continue to watch and monitor. And again, wholesalers, our partners, just are behaving differently. How they think about future orders, how they think about replenishment orders is just different from the historical norms of the business. And we, along with probably a lot of brands similar to us, are learning to react and adapt to that.
Encouragingly though, is that we talked about the uptick in replenishment orders is a positive sign in the business. We’re seeing some of the nefarious rogue selling activity that is coming down sort of week by week, which we’re encouraged by. And then, as I already talked about, a little bit of acceleration in our DTC business. But I think we’re still very cautious. We’re still managing the business very tightly on a day-to-day basis. And then where we do see proof points, we are chasing that business responsibly as quickly as we can. So I think by and large we’re pleased with the progress we’ve made. At the same time, we know that we can do better and everyone should expect us to do better. And that’s what everyone here is focused on.
Dana Telsey: Got it. And then pricing and promotions. What are you seeing there and any shifts in third quarter and fourth quarter as you return to growth?
Mike Stornant: Well, I can say that the proof point so far this year on pricing and promotions, both in our direct-to-consumer channels and through our wholesale partnerships has been quite positive. Overall in the accounts or in the channels where we do get the information, we’re seeing inventories coming down nearly 25% year-over-year, not to optimal levels yet, obviously at retail, but that’s an encouraging trend and sign. But at the same time, average selling price is increasing pretty dramatically for our big brands in those channels. So that’s a really important proof point. We talked a little bit about the margin expansion in our e-commerce business and how that’s been a very important focus for the teams and we’re seeing that benefit, I think a combination of a bit more disciplined, but most importantly just new product that’s actually resonating with the consumers right now and driving more full price business.
So I think those are the two most important proof points right now, Dana, as we think about, more confidence into the back half of the year, we’re not giving guidance on Q3 or Q4 phasing or trends, but just know that some of the early positive wins we’re seeing in the e-commerce side of the business are giving us some confidence points for sure.
Dana Telsey: Thank you.
Chris Hufnagel: Thanks, Dana.
Operator: Thank you. We have the next question from the line of Ashley Owens with KeyBanc Capital Markets. Please go ahead.
Ashley Owens: Hi. Thanks for taking the question. Just first, can you talk about your decision to roll off the Merrell and Saucony kids businesses into license and then any plans you can share that you have to reallocate some of those resources you were previously using to support those?
Chris Hufnagel: Yes, good question. Thanks, Ashley. We appreciate that. Certainly, important decisions that we’re making as an organization to how we think about Wolverine World Wide go forward. We created a global licensing group in the latter part of last year and really are thoughtful about that business and what it can mean. We’ve got a great seasoned leader running that business. She brings just a great approach sort of daily to both our brands and our partners and how we can profitably grow that business. So we’ve created the center of excellence. We’ve got the right leader running it. And then we also look back on the global potential of our brands and where we know we can be great and where I think we probably know that we can use some help.
I still believe in the power of our global head-to-toe opportunities specifically for Merrell and Saucony and what those brands can be. And as it relates to Merrell, we’ve attempted apparel and accessories historically, and we just haven’t been great at it. And I think we found a great partner in that. I literally just met with them last week. I’ll meet with them in a couple weeks. Just a really phenomenal partner that has a deep fondness for the Merrell brand. They’ve already built a team out around it and are very excited about what they see as the potential for Merrell apparel and accessories to allow us to be a true global head-to-toe business. And I think we can’t miss the fact that Merrell outside of the U.S., we’ve got 46 stores in the U.S., we’ve got a direct-to-consumer business.
We have a wholesale business. But outside of the U.S., we have a lot of direct-to-consumer operations. And I think those stores, being able to arm those stores with apparel and accessories and socks and packs and bags, along with the amazing footwear that we design, really creates a really phenomenal opportunity for us and really helps us tell a better story with the consumer. So I’m bullish on that. And then on the kids front too, we’ve had a kids group, a kids group that was very good. At the same time, I think a licensing model with a longtime partner like who we chose was really made the best sense for us today as we’re thinking about the business. So I think we picked two great partners for both apparel accessories for Merrell and then Merrell and Saucony kids, and we have them underneath a great leader at Wolverine World Wide.
So I think we’re really working to prioritize the business, eyes wide open about what we know we can be great at. At the same time, looking at other opportunities for our brands with best-in-class partners who can help us continue to grow without having us to do it ourselves. As a talk to redeploy resources, we’ve already done that. We’ve redeployed some resources into other parts of the business as well. And it allows us to really have a sharper focus on what we know that we can be great at and what we know we need to be great at. So an important move and just another step in our evolution.
Ashley Owens: Okay, great. Thanks. And then quickly one, any call outs you could provide around which brands, the products are kind of helping with that replenish rate improvement you’re seeing and then additionally, the product cadence as we get to the back half of the year and just how it compares to some of the innovation we’re seeing now? As resources free up, inventory gets cleaner, all the transformation efforts underway as well. Should we seeing a little bit of acceleration in terms of launches or is the inflection of 4Q coming from existing products you’ve released ramping in momentum?
Chris Hufnagel: Yes. Great. Great question or questions. There’s a lot embedded there. I’ll try to answer it. I think certainly replenishment across the board we have seen an improvement in. Some parts it’s better than others. But in our weekly meetings with the brand leadership teams and sales teams, we certainly have seen a nice uptick in weekly replenishment orders. Probably stronger in some brands and frankly strong in some brands where now we’re going to go chase inventory. And I’m thinking about Saucony specifically right now, some of the momentum that Saucony has, we’re chasing product because we have managed inventory very closely to help really work and reposition and reset that brand. We’re also seeing it in brand like Merrell, and we’re chasing Moab Speed 2s now and talking about how we can prioritize orders and feed the regions and channels that are driving that growth.
And then even some places in the work group which we haven’t talked about today, where product is on trend or new innovation, we’re having to chase that too. So it goes without saying, and you all know as well as I do that newness – consumers crave newness and innovation. And I think when we can bring that in a meaningful way and tell a good story about it, that product checks. And that’s why I’m so convinced about our global brand building model and encouraged by the progress we made around the product pipeline. While we’ve had some great introductions, there are still more coming this year. I’m excited about the Reforce, which is just dropping in the boot group, certainly in Saucony. The Hurricane 24, which will drop this summer.
We’re encouraged by. That is a disruptive shoe that has people talking, continuing to chase the Endorphin, the Triumph. Those are all very positive. And then there’s some really cool new light hikers coming out from Merrell that’ll drop the latter part of this year into next year. That are probably some of the most disruptive shoes that Merrell has built in a very long period of time. Thinking about the evolution of the trail, light and fast, and things that are visually disruptive at the same time perform. So I think we’ve worked hard to accelerate the innovation in our product pipeline. I think the teams have responded early proof points of the new innovation working, and even some of the sell in that we’re doing with accounts have been very positive.
