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How is Wolverine Repositioning for Sustained Margin Strength in 2025?
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Key Takeaways
Wolverine's Q1 adjusted gross margin hit 47.3%, up 80 bps, on mix, pricing and supply savings.
Saucony, Merrell and Sweaty Betty drove gains through premium pricing and reduced promotions.
Diversified sourcing and targeted price hikes help Wolverine counter cost pressures and tariffs.
Wolverine World Wide, Inc. (WWW - Free Report) began fiscal 2025 with strong momentum, highlighted by a record gross margin and clear progress on operational efficiency. In the first quarter, adjusted gross profit rose 7.3% year over year to $194.8 million.
This translated into an adjusted gross margin of 47.3%, an 80-basis-point increase from the prior year. The improvement was driven by a more favorable sales mix, reduced promotional activity and meaningful benefits from supply-chain cost-saving initiatives.
Margin gains were broad-based but particularly notable in the company’s largest and most strategically important brands. Saucony and Merrell posted strong growth, supported by higher average selling prices and a healthier full-price sales mix. Additionally, despite a planned revenue decline, Sweaty Betty delivered a significant 1,000-basis-point improvement in the gross margin. This reflected the brand’s shift away from promotions and toward premium, full-price positioning, reinforcing the company’s emphasis on profitability over volume.
Operating income also improved on the back of stronger top-line results and tight expense control. The adjusted operating margin increased by 100 basis points to 6%, supported by improved cost leverage and enhanced operational discipline. Management noted that brand momentum, inventory efficiency and strategic pricing all contributed to the outperformance.
Wolverine expects to build on this foundation, projecting an adjusted operating margin of 7.2% in the second quarter, representing a 90-basis-point improvement over the prior year.
The company continues to take proactive steps to mitigate cost pressures, including tariff-related headwinds. Wolverine has strategically diversified its sourcing footprint over the past several years, reducing its reliance on China to less than 10% of U.S.-bound production. This approach has strengthened the company’s ability to respond quickly and effectively to global trade volatility. Complementing this, selective price increases across key brands and categories were implemented to help preserve margins while remaining competitive.
With disciplined execution, brand strength and operational flexibility, Wolverine is on track to sustain its profitability gains. The record adjusted gross margin and improving operating performance reflect a well-calibrated strategy that balances cost control, brand investment and long-term growth, setting the stage for continued success in 2025.
WWW’s Price Performance, Valuation & Estimates
In the past three months, the WWW stock has gained 75.9% as compared with the Zacks Shoes and Retail Apparel industry’s 31.4% growth. The company also outperformed the broader Zacks Consumer Discretionary sector and the S&P 500 index’s growth of 25.8% and 15.9%, respectively, during the same period.
Image Source: Zacks Investment Research
This Zacks Rank #3 (Hold) company has demonstrated strong upward momentum, trading above its 50 and 200-day simple moving averages (SMAs). The company ended yesterday’s trading session at $19.44, above its 50 and 200-day SMAs of $16.91 and $17.64, respectively, highlighting a continued uptrend.
Image Source: Zacks Investment Research
From a valuation standpoint, WWW trades at a forward price-to-sales ratio of 0.84X, below the industry’s average of 2.01X. It has a Value Score of C.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Wolverine’s current financial-year sales and earnings per share implies year-over-year growth of 3.6% and 15.4%, respectively.
Canada Goose is a global outerwear brand. GOOS is a designer, manufacturer, distributor and retailer of premium outerwear for men, women and children. It flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Canada Goose’s current fiscal year’s earnings and sales indicates growth of 10% and 2.9%, respectively, from the year-ago actuals. Canada Goose delivered a trailing four-quarter average earnings surprise of 57.2%.
Stitch Fix delivers customized shipments of apparel, shoes and accessories for women, men and kids. It currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Stitch Fix’s current fiscal year’s earnings implies growth of 71.7% from the year-ago actuals. SFIX delivered a trailing four-quarter average earnings surprise of 51.4%.
Allbirds is a lifestyle brand that uses naturally derived materials to make footwear and apparel products. It presently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for BIRD’s current financial-year earnings implies growth of 16.1% from the year-ago actual. The company delivered a trailing four-quarter average earnings surprise of 21.3%.
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How is Wolverine Repositioning for Sustained Margin Strength in 2025?
Key Takeaways
Wolverine World Wide, Inc. (WWW - Free Report) began fiscal 2025 with strong momentum, highlighted by a record gross margin and clear progress on operational efficiency. In the first quarter, adjusted gross profit rose 7.3% year over year to $194.8 million.
This translated into an adjusted gross margin of 47.3%, an 80-basis-point increase from the prior year. The improvement was driven by a more favorable sales mix, reduced promotional activity and meaningful benefits from supply-chain cost-saving initiatives.
Margin gains were broad-based but particularly notable in the company’s largest and most strategically important brands. Saucony and Merrell posted strong growth, supported by higher average selling prices and a healthier full-price sales mix. Additionally, despite a planned revenue decline, Sweaty Betty delivered a significant 1,000-basis-point improvement in the gross margin. This reflected the brand’s shift away from promotions and toward premium, full-price positioning, reinforcing the company’s emphasis on profitability over volume.
Operating income also improved on the back of stronger top-line results and tight expense control. The adjusted operating margin increased by 100 basis points to 6%, supported by improved cost leverage and enhanced operational discipline. Management noted that brand momentum, inventory efficiency and strategic pricing all contributed to the outperformance.
Wolverine expects to build on this foundation, projecting an adjusted operating margin of 7.2% in the second quarter, representing a 90-basis-point improvement over the prior year.
The company continues to take proactive steps to mitigate cost pressures, including tariff-related headwinds. Wolverine has strategically diversified its sourcing footprint over the past several years, reducing its reliance on China to less than 10% of U.S.-bound production. This approach has strengthened the company’s ability to respond quickly and effectively to global trade volatility. Complementing this, selective price increases across key brands and categories were implemented to help preserve margins while remaining competitive.
With disciplined execution, brand strength and operational flexibility, Wolverine is on track to sustain its profitability gains. The record adjusted gross margin and improving operating performance reflect a well-calibrated strategy that balances cost control, brand investment and long-term growth, setting the stage for continued success in 2025.
WWW’s Price Performance, Valuation & Estimates
In the past three months, the WWW stock has gained 75.9% as compared with the Zacks Shoes and Retail Apparel industry’s 31.4% growth. The company also outperformed the broader Zacks Consumer Discretionary sector and the S&P 500 index’s growth of 25.8% and 15.9%, respectively, during the same period.
Image Source: Zacks Investment Research
This Zacks Rank #3 (Hold) company has demonstrated strong upward momentum, trading above its 50 and 200-day simple moving averages (SMAs). The company ended yesterday’s trading session at $19.44, above its 50 and 200-day SMAs of $16.91 and $17.64, respectively, highlighting a continued uptrend.
Image Source: Zacks Investment Research
From a valuation standpoint, WWW trades at a forward price-to-sales ratio of 0.84X, below the industry’s average of 2.01X. It has a Value Score of C.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Wolverine’s current financial-year sales and earnings per share implies year-over-year growth of 3.6% and 15.4%, respectively.
Image Source: Zacks Investment Research
Key Picks
Some better-ranked stocks are Canada Goose (GOOS - Free Report) , Stitch Fix (SFIX - Free Report) and Allbirds Inc. (BIRD - Free Report) .
Canada Goose is a global outerwear brand. GOOS is a designer, manufacturer, distributor and retailer of premium outerwear for men, women and children. It flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Canada Goose’s current fiscal year’s earnings and sales indicates growth of 10% and 2.9%, respectively, from the year-ago actuals. Canada Goose delivered a trailing four-quarter average earnings surprise of 57.2%.
Stitch Fix delivers customized shipments of apparel, shoes and accessories for women, men and kids. It currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Stitch Fix’s current fiscal year’s earnings implies growth of 71.7% from the year-ago actuals. SFIX delivered a trailing four-quarter average earnings surprise of 51.4%.
Allbirds is a lifestyle brand that uses naturally derived materials to make footwear and apparel products. It presently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for BIRD’s current financial-year earnings implies growth of 16.1% from the year-ago actual. The company delivered a trailing four-quarter average earnings surprise of 21.3%.