Revenue From Contracts With Customers (Notes)

12 Months Ended

Dec. 28, 2019

Revenue From Contracts With Customers [Abstract]

Revenue from Contract with Customer [Text Block]

REVENUE FROM CONTRACTS WITH CUSTOMERS

The Company provides disaggregated revenue for the wholesale and consumer-direct sales channels, which are reconciled to the Company’s reportable operating segments. The wholesale channel includes royalty revenues, which operates in a similar manner due to similar oversight and management, customer base, the performance obligation (footwear and apparel goods) and point in time completion of the performance obligation.



	Fiscal Year
(in millions)	2019		2018		2017
Wolverine Michigan Group:
Wholesale	$	1,134.9	$	1,129.2	$	1,144.3
Consumer-direct	164.8		143.0		123.5
Total	1,299.7		1,272.2		1,267.8
Wolverine Boston Group:
Wholesale	743.4		762.0		814.5
Consumer-direct	167.5		133.5		174.3
Total	910.9		895.5		988.8
Other:
Wholesale	57.9		64.1		74.3
Consumer-direct	5.2		7.4		19.1
Total	63.1		71.5		93.4
Total revenue	$	2,273.7	$	2,239.2	$	2,350.0

The Company has agreements to license symbolic intellectual property with minimum guarantees and/or fixed consideration. Revenue is recognized under these contracts over the contractual term as the Company believes time is the appropriate measure of progress and best represents a faithful depiction of the transfer of goods under the contract. The Company is due $33.6 million of remaining fixed consideration under these license agreements as of December 28, 2019, which will be recognized over the remaining term of the contracts, which expire at various dates through 2024.

Reserves for Variable Consideration

Revenue is recorded at the net sales price (“transaction price”), which includes estimates of variable consideration for which reserves are established. Components of variable consideration include trade discounts and allowances, product returns, customer markdowns, customer rebates and other sales incentives relating to the sale of the Company’s products. These reserves, as detailed below, are based on the amounts earned, or to be claimed on the related sales. These estimates take into consideration a range of possible outcomes, which are probability-weighted in accordance with the expected value method for relevant factors such as current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, the revenue recognized by the Company, net of 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 fiscal years 2019 and 2018, related to the Company’s contract liabilities, was nominal.

The Company’s contract balances are as follows:



(In millions)	December 28, 2019		December 29, 2018
Product returns reserve	$	11.4	$	13.6
Customer markdowns reserve	4.4		4.0
Other sales incentives reserve	2.3		2.3
Customer rebates liability	12.0		12.8
Customer advances liability	7.2		3.8

The amount of variable consideration included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. Actual amounts of consideration ultimately received may differ from initial estimates. If actual results in the future vary from initial estimates, the Company subsequently adjusts these estimates, which would affect net revenue and earnings in the period such variances become known.

Product Returns

Consistent with industry practice, the Company offers limited product return rights for various return scenarios. The Company estimates the amount of product sales that may be returned by customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized, and a reduction to trade receivables, net on the consolidated balance sheets. The Company believes there is sufficient current and historical information to record an estimate of the expected value of product returns although actual returns could differ from recorded amounts.

Customer Markdowns

Markdowns represent the estimated reserve resulting from commitments to sell products to the Company’s customers at prices lower than the list prices charged to customers who directly purchase the product from the Company. Customers charge the Company for the difference between what they pay for the product and the ultimate selling price to the end consumer. The reserve is established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and a reduction to trade receivables, net on the consolidated balance sheets.

Other Sales Incentives

The Company accrues for other customer allowances for certain customers that purchase required volumes or meet other criteria. These reserves are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and a reduction to trade receivables, net on the consolidated balance sheets depending on the nature of the item.

Customer Rebates

The Company accrues for customer rebates related to customers who purchase required volumes or meet other criteria. These reserves are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and an establishment of a current liability on the consolidated balance sheets.

Customer Advances

The Company recognizes a liability for amounts received from customers before revenue is recognized. Customer advances are recognized as a current liability on the consolidated balance sheets.