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WOLVERINE WORLD WIDE INC /DE/ (WWW)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered a clean beat: revenue $470.3M vs S&P Global consensus $463.1M* and adjusted EPS $0.36 vs $0.33*; gross margin hit a new high at 47.5% as cost savings, lower promos, and tariff mitigation outpaced headwinds .
  • Active Group strength continued (Saucony +27%, Merrell +5%), while Work Group declined 2.9%; management reiterated brand-building execution and responsible distribution with a focus on sell-through .
  • Full-year FY25 guidance reinstated: revenue $1.855–$1.870B, GM ~47.1%, GAAP OM ~7.8%, adjusted OM ~8.9%, adjusted EPS $1.29–$1.34; Q4 guide: revenue $498–$513M, GM ~46%, adjusted EPS $0.39–$0.44 .
  • Tariff impact for 2025 revised down to ~$10M (unmitigated) with timing shifting ~$55M into 2026; management expects to “more than offset” 2025 impact and targets GM within the 45–47% framework next year .

What Went Well and What Went Wrong

What Went Well

  • “Record gross margin” quarter at 47.5% driven by product cost savings and lower promotions; adjusted operating margin expanded 150 bps YoY to 9.1% .
  • Saucony momentum: +27% revenue, share gains in Run Specialty, global lifestyle expansion; CEO: “Saucony is uniquely positioned…at the intersection of performance and lifestyle running” .
  • Merrell resilience: +5% revenue; 11 of last 12 quarters of US Hike share gains; lifestyle up strong double digits with Disruptive Wrap and Jungle Moc .

What Went Wrong

  • Work Group softness: –2.9% YoY; Wolverine brand –8% with inconsistent performance and longer-than-expected recovery; new Work Group President hired to accelerate progress .
  • DTC down 5% YoY as lower promotional activity in US weighed on volumes (strategy to prioritize full-price mix), partially offset by EMEA growth .
  • Tariffs remain a 2026 headwind (annualized ~$65M unmitigated), requiring continued mitigation to protect margins; Q4 expected to see a portion of timing effects .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$412.3 $474.2 $470.3
Gross Margin (%)47.3% 47.2% 47.5%
Operating Margin (%)4.8% 8.6% 8.4%
Adjusted Operating Margin (%)6.0% 9.2% 9.1%
Diluted EPS ($, GAAP)$0.13 $0.32 $0.30
Adjusted Diluted EPS ($)$0.18 $0.35 $0.36
Segment/Brand Revenue ($USD Millions)Q1 2025Q2 2025Q3 2025
Active Group$326.7 $355.5 $352.8
Work Group$74.8 $107.5 $105.9
Other$10.8 $11.2 $11.6
Total Revenue$412.3 $474.2 $470.3
Merrell$150.6 $157.9 $167.3
Saucony$129.8 $144.3 $133.1
Wolverine$37.4 $37.1 $45.3
Sweaty Betty$38.0 $41.3 $44.5
International$207.8 $250.0 $242.7
Direct-to-Consumer (Reported)$96.4 $111.6 $106.8
KPIsQ1 2025Q2 2025Q3 2025
Inventory ($USD Millions)$270.7 $316.0 $292.5
Net Debt ($USD Millions)$604 $568 $543
Cash & Equivalents ($USD Millions)$106.5 $141.0 $133.9
Shares Used (Diluted, Millions)80.8 81.1 81.7
Actuals vs SPGI ConsensusQ1 2025Q2 2025Q3 2025
Revenue – Actual ($M)$412.3 $474.2 $470.3
Revenue – Consensus ($M)$395.9*$451.1*$463.1*
Adjusted EPS – Actual ($)$0.18 $0.35 $0.36
Primary EPS – Consensus ($)$0.110*$0.242*$0.330*
EBITDA – Consensus ($M)——$46.4*

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Billions)FY 2025Not provided/withdrawn $1.855–$1.870 Initiated/Reinstated
Gross Margin (%)FY 2025N/A~47.1% Initiated
Operating Margin (%) GAAPFY 2025N/A~7.8% Initiated
Adjusted Operating Margin (%)FY 2025N/A~8.9% Initiated
Effective Tax Rate (%)FY 2025N/A~16% Initiated
Diluted EPS ($)FY 2025N/A$1.08–$1.13 Initiated
Adjusted Diluted EPS ($)FY 2025N/A$1.29–$1.34 Initiated
Interest & Other Expense ($M)FY 2025N/A~$27 New
Diluted Weighted Avg Shares (MM)FY 2025N/A~81.5 New
Revenue ($USD Millions)Q4 2025N/A$498–$513 New
Gross Margin (%)Q4 2025N/A~46% New
Adjusted Operating Margin (%)Q4 2025N/A~10.5% New
Adjusted Diluted EPS ($)Q4 2025N/A$0.39–$0.44 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1, Q2)Current Period (Q3)Trend
AI/technology initiativesNot highlighted in Q1/Q2 press; focus on brand-building and IBP processes “Advanced the adoption and use of AI across the business; plans to modernize e-commerce tools next year” Increasing focus
Supply chain, tariffs, mitigationQ2: 2025 tariff impact cut to ~$20M before mitigation; majority in Q4; China down to 30%, others ~20%; actions include dual-sourcing and price increases 2025 unmitigated ~$10M; annualized ~$65M with ~$55M timing shift into 2026; expect to more than offset 2025 impact Clearer outlook; timing shift to 2026
Product performanceQ1: Merrell +13%, Saucony +30% ; Q2: Merrell +11%, Saucony +42% Merrell +5%, Saucony +27%; continued share gains and lifestyle momentum Sustained strength
Regional trendsInternational +16.4% (Q1), +15.7% (Q2) International +13.5% ; APAC fastest-growing region for Saucony; EMEA strong Strong, moderating
Distribution strategy & door countQ2: Saucony lifestyle distribution expansion (test-and-learn) 1H26 doors > 1H25 but < 2H25 (rationalize underperformers); focus on sell-through Optimize & rationalize
Regulatory/accountingQ1/Q2 non-GAAP adjustments noted Change in inventory accounting LIFO→FIFO; retrospective adjustments for comparability Improves comparability
DTC executionQ2: DTC down 1.6%; less promotional activity; margin lift DTC –5%; strategy to elevate full-price mix and premium positioning Margin over volume

Management Commentary

  • CEO: “We delivered a solid quarter with Merrell, Saucony, and Sweaty Betty all exceeding expectations…another record gross margin quarter…better-than-anticipated EPS” .
  • CEO on brand strategy: “Advancing the adoption and use of AI across the business, and plans to further elevate and modernize our e-commerce tools and platform next year” .
  • CFO: “Adjusted operating margin was 9.1%, an increase of 150 bps YoY…gross margin expansion, continued investment…net timing benefit from our tariff mitigation efforts” .
  • CEO on Saucony: “Disruptive challenger brand…taking market share…Core Four franchises…Endorphin series; all-time record revenue and profit in 2025” .
  • CEO on Merrell: “Accelerated long-running market share gains in Hike…lifestyle product pipeline stepping forward in 2026…broader outdoor lifestyle opportunity, especially for women” .

Q&A Highlights

  • Saucony distribution: 1H26 door count to be higher than 1H25 but lower than 2H25 as they rationalize underperforming doors; goal is pull model and sell-through focus .
  • Lifestyle gender mix: Women and kids performing strongly; unisex sizing seeing high growth; notable Metagirl collaboration sold out at launch .
  • DTC strategy: Less promotional stance lifting gross margins; Saucony e-commerce up mid-teens; Sweaty Betty UK e-commerce positive; balancing brand accretion and profitability .
  • Tariffs and margins: 2025 unmitigated impact ~$10M with actions more than offsetting; 2026 GM expected within lower to mid of 45–47% framework; operating margin trajectory discussed but detailed FY26 guide deferred to February .

Estimates Context

  • Q3 2025 beats: adjusted EPS $0.36 vs $0.33*; revenue $470.3M vs $463.1M*; EBITDA $48.1M vs $46.4M*; 9 EPS estimates and 8 revenue estimates underpin consensus* .
  • Prior quarters also exceeded consensus: Q2 adjusted EPS $0.35 vs $0.24*, revenue $474.2M vs $451.1*; Q1 adjusted EPS $0.18 vs $0.11*, revenue $412.3M vs $395.9* .
  • Given the Q3 beats and reinstated FY guide (adjusted EPS $1.29–$1.34), Street models may need upward revisions for Q4 and FY EPS, while accounting for 2026 tariff timing effects .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Momentum intact: Three straight quarters of revenue and EPS beats with gross margin at cycle highs; execution on brand-building and pricing/promotions is delivering leverage .
  • Active Group is the engine: Continued share gains and lifestyle expansion at Saucony and Merrell should drive mid-to-high single-digit consolidated growth, with Merrell lifestyle pipeline strengthening for 2026 .
  • Tariff risk manageable: 2025 unmitigated impact down to $10M (more than offset); 2026 annualized headwind ($65M) is known, enabling proactive mitigation planning .
  • Guidance reinstatement is a positive catalyst: FY25 adjusted EPS $1.29–$1.34 and Q4 guide signal confidence; watch Q4 execution and sell-through as they rationalize doors .
  • Mix improvement favored over promo: DTC volumes may be softer, but margin quality is higher; supports premium brand positioning and sustainable profitability .
  • Execution focus in Work Group: New leadership and product/marketing initiatives to stabilize Wolverine; near-term drag but longer-term opportunity if turnaround sticks .
  • Accounting change (LIFO→FIFO) improves comparability and aligns policy across warehouses; minimal effect on the investment case but relevant for modeling .

Additional Context from Q3 Press Releases

  • Wolverine x Jordan Davis limited-edition boots/apparel expanding brand reach through authentic partnerships and premium positioning .
  • Merrell collaborations (Gramicci; LONELY GHOST) reinforce lifestyle momentum and outreach to younger/female consumers .
  • Saucony SILO AW25 launch advances design-driven storytelling at the heritage–performance intersection .