Wolverine World Wide, Inc. (WWW Quick QuoteWWW - Free Report) reported solid first-quarter 2026 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. Also, revenues and earnings increased year over year.

The company delivered a healthy start to 2026, driven by continued strength in its two largest brands, Merrell and Saucony, along with robust international growth. Results reflected improving operating leverage and disciplined cost management, while the company continued to navigate tariff-related headwinds through pricing actions and a better full-price mix.

Management also increased its 2026 profitability outlook, reflecting confidence in execution and continued brand momentum across the portfolio.

Insight Into WWW’s Q1 Performance

The company posted adjusted earnings of 25 cents a share, which beat the Zacks Consensus Estimate of 22 cents by 13.6%. The figure improved 31.6% from adjusted earnings of 19 cents in the prior-year quarter. At constant currency, earnings per share were 22 cents, up 15.8% from 19 cents in the prior-year quarter.

Total revenues were $457.6 million, up 11% year over year on a reported basis. The top line surpassed the Zacks Consensus Estimate of $447 million by 2.4%. Direct-to-consumer revenues were $99.3 million, up 3% year over year. WWW’s international business revenues increased 20.1% to $249.6 million.

Regarding segments, Active Group revenues increased 13.7% year over year to $371.6 million. However, the segment’s revenues surpassed the Zacks Consensus Estimate of $364.1 million. Work Group revenues inched up 1.2% to $75.7 million and beat the consensus estimate of $72.2 million. Revenues of the Other segment declined 4.6% to $10.3 million. Also, the metric lagged the consensus estimate of $11 million.

Brand-wise, Merrell revenues rose 12.7% year over year to $169.7 million. Saucony revenues jumped 20.1% to $155.9 million. Wolverine revenues declined 2.5% to $36.4 million. Sweaty Betty generated revenues of $38.6 million, up 1.5% year over year. The Zacks Consensus Estimate for revenues was pegged at $161.1 million for Merrell, $158.4 million for Saucony, $33.7 million for Wolverine and $36.1 million for Sweaty Betty.

Wolverine’s Margins & Costs

Gross profit was $217.8 million, up 11.1% year over year. The gross margin remained flat year over year at 47.6%. Performance was driven by a favorable shift toward higher full-price sales and benefits from recent price increases, partially offset by higher U.S. tariffs.

Adjusted operating costs increased 7.3% year over year to $182.7 million. As a percentage of revenues, adjusted operating expenses leveraged 140 basis points year over year.

Adjusted operating profit increased 35.5% year over year to $35.1 million, while the adjusted operating margin improved 140 basis points to 7.7%.

WWW’s Balance Sheet Snapshot

The company ended the quarter with cash and cash equivalents of $119.6 million, long-term debt of $546.9 million, and stockholders’ equity of $433 million.

Net debt was $519 million at the end of the quarter, down 14.1% from the prior-year period. Inventory at the end of the quarter was $280.3 million, up 0.4% year over year.

WWW Provides Q2 View

For the second quarter, revenues are projected between $495 million and $500 million, indicating 4.9% reported growth at the midpoint versus the prior year. On a constant-currency basis, revenues are expected to increase 4.5% at the mid-point. The Active Group is anticipated to deliver high-single-digit growth, while the Work Group is expected to decline in the low-single digit year over year.

Active Group revenues are expected to grow at a high-single-digit rate, while Work Group revenues are projected to decline year over year in the low-single digit. The second-quarter gross margin is expected to be 46.4%, down 80 basis points from the prior year. The decline reflects an estimated unmitigated tariff impact of 310 basis points, along with a modest headwind from higher oil prices affecting freight costs. These pressures are expected to be partially offset by ongoing tariff mitigation initiatives.

The adjusted operating margin is projected to be 9.5%, a year-over-year improvement of 30 basis points, as continued expense leverage is expected to more than offset the impacts of higher tariffs and elevated freight costs on the gross margin. As a result, adjusted diluted earnings per share are expected to range from 35 cents to 38 cents compared with 35 cents in the prior-year period.

WWW Raised 2026 Outlook

Wolverine Worldwide expects 2026 revenues to be $1.96-$1.985 billion, unchanged from its prior outlook. The guidance indicates year-over-year reported revenue growth of 4.6-5.9%, or constant-currency growth of 3.8-5.1%. Excluding the impacts of the 53rd week in 2025, constant-currency revenue growth is projected to be 4.5-5.8%.

The outlook includes an estimated $14-million favorable foreign currency impact. Excluding currency effects and the absence of the 53rd week in 2025, which indicates a 70-basis-point headwind largely affecting the DTC business, revenues are expected to grow 5.2% at the mid-point on a constant-currency basis.

On a segment basis, the company continues to expect the Active Group to deliver mid-single-digit growth, while the Work Group is projected to remain approximately flat year over year. Brand expectations are unchanged from February guidance, with Merrell expected to grow in the mid-single digits, Saucony projected to achieve low- to mid-teen growth, Sweaty Betty expected to decline in the low-single digit and Wolverine anticipated to remain roughly flat with that reported in 2025.

The outlook incorporates several key assumptions. The Middle East accounts for approximately 1% of total revenues, and any disruption to date has already been reflected in guidance. Higher oil prices are expected to increase freight costs and are included in the revised gross margin outlook. Product input cost inflation is expected to remain limited in 2026.

Regarding tariffs, guidance assumes the current incremental 10% tariff rate remains in place through July before reverting to IEPA levels thereafter. Based on these assumptions, the company expects the unmitigated tariff impacts in 2026 to be $50 million, an improvement from the prior stated $60 million. The guidance does not include any benefit from potential IEPA tariff refunds despite approximately $36 million in IEPA tariffs already paid and currently under refund review.

WWW Stock Past 3-Month Performance

Image Source: Zacks Investment Research

The gross margin is expected to be 46.4%, improved from the prior outlook of 46%. The increase primarily reflects lower tariff costs, partially offset by higher freight surcharges tied to elevated oil prices. The company expects the unmitigated tariff impacts to represent 250 basis points in 2026.

The company expects the operating margin to be 9.2% in 2026, indicating an increase of 120 basis points from that reported in 2025. This compares with the prior outlook of an 8.8% operating margin. The adjusted operating margin is projected to be 9.5%, up from the prior outlook of 9.1%, driven by the improved gross margin flowing through to operating profit. The company also expects continued year-over-year operating leverage, supported by revenue growth, disciplined cost management and ongoing efficiency initiatives, while continuing to invest strategically in marketing and core brand capabilities.

Interest and other expenses are expected to be $23 million, while the effective tax rate is projected to be 18%, both unchanged from the prior guidance. Earnings per share are projected to be $1.39-$1.54, higher than the earlier mentioned $1.31-$1.46. Adjusted earnings per share are expected between $1.43 and $1.58 compared with the previously mentioned $1.35-$1.50.

The company expects the operating free cash flow to be $105 million to $120 million, while capital expenditure is projected to be $20 million. In the past three months, shares of this Zacks Rank #3 (Hold) company have lost 13.1% compared with the industry’s 29.8% decline.

Stocks to Consider

We have highlighted three better-ranked stocks, namely, V.F. Corporation (VFC Quick QuoteVFC - Free Report) , Victoria's Secret & Co. (VSCO Quick QuoteVSCO - Free Report) and Levi Strauss & Co. (LEVI Quick QuoteLEVI - Free Report) .

V.F. Corp designs, manufactures and markets branded apparel and related products in the United States and internationally. 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 V.F. Corp’s current fiscal-year earnings and sales indicates growth of 10.8% and a decline of 3.2%, respectively, from the year-ago actuals. VFC delivered a trailing four-quarter average earnings surprise of 25.9%.

Victoria's Secret is a specialty retailer of women's intimates, sleepwear, apparel, sport and swimwear, and prestige fragrances and body care. It currently has a Zacks Rank of 2 (Buy). The company delivered a trailing four-quarter earnings surprise of 55.1%, on average. 

The Zacks Consensus Estimate for VSCO’s current fiscal-year sales and earnings indicates growth of 6.2% and 16.3%, respectively, from the year-ago reported numbers.

Levi Strauss designs and markets jeans, casual wear and related accessories for men, women and children. It currently carries a Zacks Rank #2.

The Zacks Consensus Estimate for Levi Strauss’ current fiscal-year earnings and sales suggests growth of 11.9% and 5.2%, respectively, from the year-ago actuals. LEVI delivered a trailing four-quarter average earnings surprise of 21.4%.