It was a great day for Wolverine Worldwide.
The Rockford, Mich.-based company ended Thursday with its stock up nearly 36 percent by end-of-day trading as Wall Street reacts positively to its aggressive turnaround strategy.
While the company did start cutting costs in 2022, its transformation efforts kicked into high gear in 2023 when Chris Hufnagel ascended to the role of president and chief executive officer following the exit of Brendan Hoffman last August.
Since then, Hufnagel has remained committed to taking the “necessary actions” to best position the company for future profitable growth, while making sure the company moves with “speed and urgency” to capitalize on its biggest growth opportunities, the CEO noted to analysts in November 2023.
The urgency led to quick moves including aggressive divestitures and cost cutting measures, which included the sale of Sperry and the Wolverine leather business.
Now, the moves are slowly paying off. On the company’s third quarter 2024 earnings call on Thursday, Hufnagel praised Merrell’s “return to growth” and the stabilization of sales at Saucony and Sweaty Betty.
“We moved quickly to transform Wolverine Worldwide for the future, rationalizing our brand portfolio, restructuring the global organization and working to improve our profitability,” Hufnagel said. “Today, we continue to execute with great pace against this agenda, focus squarely on delivering the progress needed quarter after quarter to build a better business and ultimately deliver better returns for our shareholders.”
At Merrell, the CEO noted that the brand “remains intently focused on modernizing the trail through faster, lighter and more versatile product.” This was illustrated with the Moab Speed 2, which has since become an “important franchise” for the brand. “It continues to sell through well at key outdoor accounts and encouragingly, is also performing well at certain lifestyle retailers,” Hufnagel said.
The executive also noted that Merrell’s Agility Peak 5 trail runner is also selling through well in both performance and lifestyle channels. But looking into next year, the company is “pushing the innovation boundaries” with the introduction of the new Speed Arc collection, which includes the Speed Arc Surge Boa set to drop in January.
Saucony has executed a similar approach when it comes to its lifestyle product. The brand’s “deep authentic product archive” with key styles like the Pro Grid Omni and Ride Millennium coupled with “relevant and compelling” collaborations with the likes of Jae Tips, Minted New York and Undefeated has helped fuel strong brand heat, the executive said.
“As of today, [Saucony] expects to thoughtfully increase its store count in relevant U.S. lifestyle and athletic specialty channels from nascent distribution this past spring to over 900 doors in spring ’25,” Hufnagel said. “Saucony anticipates building on a strong momentum in 2025 by kicking off the year with a fresh offering of the rapidly growing Pro Grid Omni and lifestyle, along with the introduction of new Guide and Ride models on the performance side.”
The brand also plans to launch the Endorphin Elite 2 this coming spring, featuring a new responsive foam that delivers “unmatched” energy return and cushioning, the CEO said.
On the store side, Saucony will open its first store in London’s Covent Garden neighborhood, which has also seen openings from Hoka and Axel Arigato, in spring 2025. This opening comes as Saucony sponsors the London 10-k marathon as well as activating in the city with run clubs.
“I certainly think from a brand heat buzz standpoint, Saucony is having a moment,” Hufnagel told analysts. “That’s something we’re spending a lot of time on here as an organization thinking about, too, because we think there’s tremendous potential with that brand really up and down the product line. And certainly, from a global standpoint, that brand has tremendous exposure and great partners. So we remain encouraged and optimistic about the growth prospects for Saucony.”
In addition to Merrell and Saucony’s success, Hufnagel also noted that the company has “cut the ribbon” to open its first-ever innovation hub three weeks ago. The hub is located in the heart of the west end of Boston, as Wolverine hopes to to “tap into” the region’s deep product talent and augment the teams in Michigan. FN has reached out to the company for more information.
This comes as Wolverine Worldwide ended Q3 with revenue of $440.2 million, down 16.6 percent from $527.7 million the same time last year. Ongoing total revenue in Q3 – which excludes the impact of sold assets – was $440.1 million, a decrease of 7.0 percent from $473.3 million the prior year period.
Looking ahead, the company raised its guidance slightly and now expects total revenue from its ongoing business to be approximately $1.730 billion to $1.745 billion for the full fiscal year 2024.
