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Wolverine Q3 Earnings Beat on Saucony Growth, 2026 Outlook Raised
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Key Takeaways
Wolverine's Q3 earnings surged 119.4% to 79 cents per share, while revenues grew 7.5% to $505.4 million.
Saucony sales jumped 19.4%, while Merrell grew 6.5%, driving Wolverine's eighth straight quarter of growth.
Wolverine raised its 2026 revenue outlook to $2-$2.01 billion and adjusted EPS guidance to $1.95-$1.99.
Wolverine World Wide, Inc. (WWW - Free Report) reported strong third-quarter fiscal 2026 results, with both earnings and revenues surpassing the Zacks Consensus Estimate. Adjusted earnings of 79 cents per share beat the consensus estimate of 46 cents and surged 119.4% from 36 cents in the year-ago quarter. Excluding a 31-cent benefit from IEEPA tariff refunds and related interest, adjusted earnings increased 33% to 48 cents per share.
Revenues increased 7.5% year over year to $505.4 million, surpassing the consensus estimate of $497 million. On a constant-currency basis, revenues advanced 7.7%. Growth was driven by Saucony and Merrell, supported by higher wholesale revenues and stronger international sales. Management raised its fiscal 2026 outlook.
Wolverine World Wide, Inc. Price, Consensus and EPS Surprise
Active Group revenues increased 9.9% year over year to $387.8 million, or 10.2% on a constant-currency basis. Growth was supported by Merrell and Saucony, with both brands performing ahead of management's expectations.
Work Group revenues increased 0.9% to $106.9 million, while Other segment revenues declined 7.8% to $10.7 million. Wholesale revenues advanced 9% on a constant-currency basis, led by international markets and supported by U.S. growth.
Direct-to-consumer revenues rose 2.2% to $109.1 million, while international revenues increased 11.7% to $271.2 million. The company recorded its eighth consecutive quarter of revenue growth, reflecting continued progress in executing its brand-building strategy.
Wolverine's Brand Momentum Remains Mixed
Saucony revenues surged 19.4% year over year to $158.9 million, reflecting double-digit growth across performance and lifestyle categories. Strength in the Endorphin collection, particularly the Endorphin Azura, supported performance running. Lifestyle growth benefited from the ProGrid Omni 9 and stronger demand across European markets.
Merrell revenues increased 6.5% to $178.2 million, marking its ninth consecutive quarter of growth. Strong sell-through of the Moab and Moab Speed franchises supported gains in the hiking category. The brand also witnessed improving direct-to-consumer performance and continued international momentum.
However, Sweaty Betty revenues declined 7% to $41.4 million, reflecting its ongoing U.S. reset and challenging U.K. activewear conditions. Wolverine brand revenues fell 4.1% to $43.5 million as efforts to improve marketplace quality, reduce slower-moving inventory and limit promotional activity continued to pressure near-term performance.
WWW's Margins Expand Despite Tariff Pressures
Gross profit increased 23.7% year over year to $276.1 million. Gross margin expanded 710 basis points to 54.6%, including approximately 640 basis points of benefit from International Emergency Economic Powers Act (IEEPA) tariff refunds. Excluding these refunds, gross margin improved 70 basis points to 48.2%.
The company received $35.3 million in tariff refunds and related interest during the quarter, comprising $32.6 million credited against cost of goods sold, $1.3 million against interest expense and $1.4 million against inventory.
Adjusted operating expenses increased 3.2% to $186 million. Adjusted operating profit increased to $90.1 million from $43 million a year earlier, while adjusted operating margin expanded 870 basis points to 17.8%.
Excluding tariff refunds, adjusted operating margin reached 11.4%, improving 230 basis points year over year and exceeding management's expectations by 100 basis points. Pricing initiatives, a higher mix of full-price sales and supply-chain efficiencies helped offset an approximately 170-basis-point unmitigated tariff headwind and elevated freight expenses.
Wolverine's Balance Sheet Strengthens
Cash and cash equivalents totaled $148.1 million at quarter-end compared with $133.9 million a year earlier. Inventory declined 4.9% to $278.2 million from $292.5 million in the prior-year period.
Net debt decreased 26.4% year over year to $399 million. Long-term debt stood at $547.4 million, while the company ended the quarter without outstanding revolving credit borrowings. Bank-defined leverage improved to 1.6 times.
For the first nine months of fiscal 2026, operating cash flow reached $73.6 million against an outflow of $6.2 million in the prior-year period. Capital expenditures totaled $7.7 million.
WWW Provides Q4 Outlook
For the fourth quarter of fiscal 2026, Wolverine expects revenues between $531 million and $541 million, representing approximately 3.5% reported growth at the midpoint. Constant-currency revenues are projected to increase 4%, or 6.6% excluding the impact of the prior year's additional week. On a constant-currency basis, Active Group revenues are expected to increase at a mid-single-digit rate, while Work Group revenues are anticipated to remain approximately flat.
Gross margin is expected to reach approximately 46.3%, down 70 basis points year over year. The outlook includes an approximately 20-basis-point benefit from tariff refunds, while higher tariff and freight costs and a difficult year-ago comparison are expected to pressure margins.
Adjusted operating margin is projected at 11.6%, up 60 basis points, while adjusted earnings are anticipated between 52 cents and 56 cents per share compared with 45 cents a year earlier. The margin outlook includes an approximately 20-basis-point tariff refund benefit, while projected adjusted earnings include an approximately one-cent-per-share benefit.
Wolverine Raises Fiscal 2026 Guidance
Wolverine raised its fiscal 2026 revenue outlook to $2-$2.01 billion from $1.98-$2 billion. The revised guidance indicates approximately 7% reported growth at the midpoint. Constant-currency growth is expected to range from 5.9% to 6.4%, or 6.6% to 7.2% excluding the additional week in fiscal 2025. The outlook incorporates an estimated $15 million in foreign currency benefit compared with $14 million previously.
On a constant-currency basis, Active Group revenues are expected to increase at a high-single-digit rate, while Work Group revenues are projected to remain approximately flat. Management continues to expect mid-teens growth at Saucony and mid-single-digit growth at Merrell. Sweaty Betty revenues are projected to decline at a low-single-digit rate, while Wolverine revenues are now expected to fall at a low-single-digit rate compared with the previous outlook of approximately flat performance.
Gross margin is now projected at 48.7% compared with the previous estimate of 46.9%. Adjusted operating margin is expected to reach 11.8%, up from 9.9%. Both projections include approximately 170 basis points of tariff refund benefits. Reported operating margin is projected at 11.5% compared with the previous outlook of 9.5%.
Adjusted earnings per share are now anticipated between $1.95 and $1.99, up from the previous range of $1.55-$1.65. The revised outlook includes approximately 32 cents per share from tariff refunds and related interest. Reported earnings per share are expected between $1.88 and $1.92 compared with the previous range of $1.48-$1.58.
Interest and other expenses are projected at approximately $23 million, unchanged from the prior outlook. The effective tax rate is now expected to be approximately 19% compared with 18% previously, while diluted weighted-average shares are projected at approximately 82.5 million.
WWW Stock Past Three-Month Performance
Image Source: Zacks Investment Research
Management also raised its free cash flow guidance to $155-$170 million from $115-$130 million. The increase reflects tariff refunds and related interest received during the year, along with lower expected capital expenditures of approximately $15 million compared with the previous forecast of $20 million. The revised guidance includes approximately $35 million in tariff refunds and related interest received to date and assumes no additional refunds.
Over the past three months, shares of this Zacks Rank #4 (Sell) company have gained 15.2% against the industry’s 6.9% decline.
The Zacks Consensus Estimate for Tapestry’s current fiscal-year earnings and sales suggests growth of 16% and 7.2%, respectively, from the year-ago actuals. TPR delivered a trailing four-quarter average earnings surprise of 17.6%.
FIGS, Inc. (FIGS - Free Report) is an apparel company focused on the healthcare industry. Its offerings include lab coats, jackets, footwear, bags, socks and other accessories used by healthcare professionals. The company carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for FIGS’ current financial-year earnings and sales suggests growth of 110.5% and 22.5%, respectively, from the year-ago actuals. FIGS delivered a trailing four-quarter average earnings surprise of 175%.
Urban Outfitters, Inc. (URBN - Free Report) is a lifestyle products and services company that sells fashion apparel, accessories, footwear, home goods and related offerings through a portfolio of global consumer brands. The company carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Urban Outfitters’ current fiscal-year earnings and sales suggests growth of 14% and 9.5%, respectively, from the year-ago actuals. URBN delivered a trailing four-quarter average earnings surprise of 9.7%.
View the Zacks #1 Rank List
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Wolverine Q3 Earnings Beat on Saucony Growth, 2026 Outlook Raised
Key Takeaways
Wolverine World Wide, Inc. (WWW - Free Report) reported strong third-quarter fiscal 2026 results, with both earnings and revenues surpassing the Zacks Consensus Estimate. Adjusted earnings of 79 cents per share beat the consensus estimate of 46 cents and surged 119.4% from 36 cents in the year-ago quarter. Excluding a 31-cent benefit from IEEPA tariff refunds and related interest, adjusted earnings increased 33% to 48 cents per share.
Revenues increased 7.5% year over year to $505.4 million, surpassing the consensus estimate of $497 million. On a constant-currency basis, revenues advanced 7.7%. Growth was driven by Saucony and Merrell, supported by higher wholesale revenues and stronger international sales. Management raised its fiscal 2026 outlook.
Wolverine World Wide, Inc. Price, Consensus and EPS Surprise
Wolverine World Wide, Inc. price-consensus-eps-surprise-chart | Wolverine World Wide, Inc. Quote
Insight Into WWW's Q3 Performance
Active Group revenues increased 9.9% year over year to $387.8 million, or 10.2% on a constant-currency basis. Growth was supported by Merrell and Saucony, with both brands performing ahead of management's expectations.
Work Group revenues increased 0.9% to $106.9 million, while Other segment revenues declined 7.8% to $10.7 million. Wholesale revenues advanced 9% on a constant-currency basis, led by international markets and supported by U.S. growth.
Direct-to-consumer revenues rose 2.2% to $109.1 million, while international revenues increased 11.7% to $271.2 million. The company recorded its eighth consecutive quarter of revenue growth, reflecting continued progress in executing its brand-building strategy.
Wolverine's Brand Momentum Remains Mixed
Saucony revenues surged 19.4% year over year to $158.9 million, reflecting double-digit growth across performance and lifestyle categories. Strength in the Endorphin collection, particularly the Endorphin Azura, supported performance running. Lifestyle growth benefited from the ProGrid Omni 9 and stronger demand across European markets.
Merrell revenues increased 6.5% to $178.2 million, marking its ninth consecutive quarter of growth. Strong sell-through of the Moab and Moab Speed franchises supported gains in the hiking category. The brand also witnessed improving direct-to-consumer performance and continued international momentum.
However, Sweaty Betty revenues declined 7% to $41.4 million, reflecting its ongoing U.S. reset and challenging U.K. activewear conditions. Wolverine brand revenues fell 4.1% to $43.5 million as efforts to improve marketplace quality, reduce slower-moving inventory and limit promotional activity continued to pressure near-term performance.
WWW's Margins Expand Despite Tariff Pressures
Gross profit increased 23.7% year over year to $276.1 million. Gross margin expanded 710 basis points to 54.6%, including approximately 640 basis points of benefit from International Emergency Economic Powers Act (IEEPA) tariff refunds. Excluding these refunds, gross margin improved 70 basis points to 48.2%.
The company received $35.3 million in tariff refunds and related interest during the quarter, comprising $32.6 million credited against cost of goods sold, $1.3 million against interest expense and $1.4 million against inventory.
Adjusted operating expenses increased 3.2% to $186 million. Adjusted operating profit increased to $90.1 million from $43 million a year earlier, while adjusted operating margin expanded 870 basis points to 17.8%.
Excluding tariff refunds, adjusted operating margin reached 11.4%, improving 230 basis points year over year and exceeding management's expectations by 100 basis points. Pricing initiatives, a higher mix of full-price sales and supply-chain efficiencies helped offset an approximately 170-basis-point unmitigated tariff headwind and elevated freight expenses.
Wolverine's Balance Sheet Strengthens
Cash and cash equivalents totaled $148.1 million at quarter-end compared with $133.9 million a year earlier. Inventory declined 4.9% to $278.2 million from $292.5 million in the prior-year period.
Net debt decreased 26.4% year over year to $399 million. Long-term debt stood at $547.4 million, while the company ended the quarter without outstanding revolving credit borrowings. Bank-defined leverage improved to 1.6 times.
For the first nine months of fiscal 2026, operating cash flow reached $73.6 million against an outflow of $6.2 million in the prior-year period. Capital expenditures totaled $7.7 million.
WWW Provides Q4 Outlook
For the fourth quarter of fiscal 2026, Wolverine expects revenues between $531 million and $541 million, representing approximately 3.5% reported growth at the midpoint. Constant-currency revenues are projected to increase 4%, or 6.6% excluding the impact of the prior year's additional week. On a constant-currency basis, Active Group revenues are expected to increase at a mid-single-digit rate, while Work Group revenues are anticipated to remain approximately flat.
Gross margin is expected to reach approximately 46.3%, down 70 basis points year over year. The outlook includes an approximately 20-basis-point benefit from tariff refunds, while higher tariff and freight costs and a difficult year-ago comparison are expected to pressure margins.
Adjusted operating margin is projected at 11.6%, up 60 basis points, while adjusted earnings are anticipated between 52 cents and 56 cents per share compared with 45 cents a year earlier. The margin outlook includes an approximately 20-basis-point tariff refund benefit, while projected adjusted earnings include an approximately one-cent-per-share benefit.
Wolverine Raises Fiscal 2026 Guidance
Wolverine raised its fiscal 2026 revenue outlook to $2-$2.01 billion from $1.98-$2 billion. The revised guidance indicates approximately 7% reported growth at the midpoint. Constant-currency growth is expected to range from 5.9% to 6.4%, or 6.6% to 7.2% excluding the additional week in fiscal 2025. The outlook incorporates an estimated $15 million in foreign currency benefit compared with $14 million previously.
On a constant-currency basis, Active Group revenues are expected to increase at a high-single-digit rate, while Work Group revenues are projected to remain approximately flat. Management continues to expect mid-teens growth at Saucony and mid-single-digit growth at Merrell. Sweaty Betty revenues are projected to decline at a low-single-digit rate, while Wolverine revenues are now expected to fall at a low-single-digit rate compared with the previous outlook of approximately flat performance.
Gross margin is now projected at 48.7% compared with the previous estimate of 46.9%. Adjusted operating margin is expected to reach 11.8%, up from 9.9%. Both projections include approximately 170 basis points of tariff refund benefits. Reported operating margin is projected at 11.5% compared with the previous outlook of 9.5%.
Adjusted earnings per share are now anticipated between $1.95 and $1.99, up from the previous range of $1.55-$1.65. The revised outlook includes approximately 32 cents per share from tariff refunds and related interest. Reported earnings per share are expected between $1.88 and $1.92 compared with the previous range of $1.48-$1.58.
Interest and other expenses are projected at approximately $23 million, unchanged from the prior outlook. The effective tax rate is now expected to be approximately 19% compared with 18% previously, while diluted weighted-average shares are projected at approximately 82.5 million.
WWW Stock Past Three-Month Performance
Image Source: Zacks Investment Research
Management also raised its free cash flow guidance to $155-$170 million from $115-$130 million. The increase reflects tariff refunds and related interest received during the year, along with lower expected capital expenditures of approximately $15 million compared with the previous forecast of $20 million. The revised guidance includes approximately $35 million in tariff refunds and related interest received to date and assumes no additional refunds.
Over the past three months, shares of this Zacks Rank #4 (Sell) company have gained 15.2% against the industry’s 6.9% decline.
Stocks to Consider
Tapestry, Inc. (TPR - Free Report) , which was formerly known as Coach, Inc., is a designer and marketer of accessories and lifestyle products for women and men. The company carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Tapestry’s current fiscal-year earnings and sales suggests growth of 16% and 7.2%, respectively, from the year-ago actuals. TPR delivered a trailing four-quarter average earnings surprise of 17.6%.
FIGS, Inc. (FIGS - Free Report) is an apparel company focused on the healthcare industry. Its offerings include lab coats, jackets, footwear, bags, socks and other accessories used by healthcare professionals. The company carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for FIGS’ current financial-year earnings and sales suggests growth of 110.5% and 22.5%, respectively, from the year-ago actuals. FIGS delivered a trailing four-quarter average earnings surprise of 175%.
Urban Outfitters, Inc. (URBN - Free Report) is a lifestyle products and services company that sells fashion apparel, accessories, footwear, home goods and related offerings through a portfolio of global consumer brands. The company carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Urban Outfitters’ current fiscal-year earnings and sales suggests growth of 14% and 9.5%, respectively, from the year-ago actuals. URBN delivered a trailing four-quarter average earnings surprise of 9.7%.