What happened

Wolverine World Wide (WWW 1.92%) stock fell hard on Wednesday as shares declined 29% by 12:30 p.m. ET, compared with a 0.6% drop in the S&P 500. That drop added to a painful year so far for investors in the apparel and footwear specialist, whose shares are down over 50% in 2022.

It was sparked by an earnings announcement that depicted a surprisingly weak third quarter for the business.

So what

The company reported Q3 results before the market opened on Wednesday. That announcement showed a 12% sales increase after accounting for currency exchange rate shifts and flat earnings on that basis. Both the revenue and profit figures were below management's expectations, it said in an investor presentation.

Executives said apparel industry challenges were partly to blame, including slowing economic growth and rising promotional activity from rivals. But Wolverine World Wide also struggled with supply chain and inventory issues. Gross profit margin fell 3 percentage points to 40% of sales and adjusted operating margin declined to 9% from 11% a year ago .

Now what

A few bright spots showed up in the company's portfolio, including continued strong sales and market share gains in the Merrell footwear brand. The international segment outperformed the U.S. market, too. Yet executives are projecting a weaker Q4 ahead on the earnings front, suggesting a tough holiday shopping period as peers compete on the basis of price.

Wolverine World Wide announced a management shakeup and new cost-cutting efforts. Yet shareholders can expect operating trends to get worse into late 2022 as these moves will take time to show up in metrics like sales growth and operating margin. Given the surprisingly slow growth and worsening profitability, it makes sense that investors would punish Wolverine World Wide's stock this week.