Wolverine World Wide, Inc. Q3 FY2025 earnings call

• Brands in Stages: Merrell and Saucony are scaling, with Merrell growing 5% in Q3 and Saucony 27%. Sweaty Betty is turning the corner with margin expansion and sequential revenue improvement. Wolverine Work Group underperformed, but new leadership (Justin Cupps) added.
• Product and Marketing: Saucony focused on performance and lifestyle, with new product launches and partnerships; Merrell modernizing trail products and expanding lifestyle; Sweaty Betty resetting strategy with DTC growth, distribution expansion, and U.S. operations pivot; Wolverine working on product pipeline and storytelling.
• Operational Improvements: Integrated business planning, AI adoption, e-commerce tool modernization, key city strategy, and culture shift towards growth and winning together.

Active Group: Revenue grew 11% in the third quarter. Saucony saw 27% revenue growth, with ~1/3 of Q3 growth from new distribution, and broad-based growth across categories, channels, and regions. Merrell had 5% revenue growth, driven by low double-digit wholesale growth and market share gains in the hike category, partially offset by DTC decline. Sweaty Betty: Revenue declined 4% in the quarter but is executing on a clear strategy for business reset. Work Group: Revenue declined 3% in the quarter, largely due to lower-than-expected sell-through impacting replenishment orders. Revenue contribution: Merrell and Saucony together expected to represent nearly 2/3 of total revenue in 2025, Work Group less than 1/4 of consolidated revenue.

• Fiscal 2025: Revenue expected $1.855B-$1.87B (+6.4% at midpoint), adjusted EPS $1.29-$1.34 (+50% at midpoint). Gross margin ~47.1%, adjusted operating margin ~8.9%.
• Fourth Quarter 2025: Revenue $498M-$513M, gross margin ~46.3%, adjusted operating margin ~10.5%, adjusted EPS $0.39-$0.44.
• 2026: Gross margin expected between lower end and midpoint of aspirational range; no formal guidance yet, but focusing on offsetting tariff headwinds through product cost savings, full price sales mix, and tariff mitigation efforts.

• Macro Environment: Dynamic consumer environment and tariff-related margin pressures.
• Brand Execution: Challenges in executing growth strategies for all brands, especially Wolverine Work Group; need for responsible brand management and sell-through focus to avoid over-pushing product.