Key Takeaways WWW posted 11.5% y/y revenue growth in 2Q25 to $474.2M on broad brand momentum.Saucony hit record sales with 41.5% growth, a 560-bps margin gain, and expanded global presence.Merrell climbed 10.7%, driven by new trail models, lifestyle appeal and strength in France.Wolverine World Wide, Inc. (WWW) posted a strong second quarter in 2025, with revenues rising 11.5% year over year to $474.2 million. The performance reflected momentum across its brand portfolio, particularly Saucony and Merrell, w ...

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Wolverine World Wide (WWW) - Wolverine World Wide currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The company has a Zacks Rank of 1 (Strong Buy), suggesting it is expected to outperform the market [3] Price Performance - Over the past week, WWW shares have increased by 23.83%, significantly outperforming the Zacks Shoes and Retail Apparel industry, which rose by 1.39% [5] - In a longer timeframe, WWW's shares have risen by 71.8% over the past three months and 127.83% over the last year, compared to the S&P 500's increases of 10.18% and 20.38%, respectively [6] Trading Volume - The average 20-day trading volume for WWW is 2,203,532 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, four earnings estimates for WWW have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $1.05 to $1.31 [9] - For the next fiscal year, four estimates have also moved upwards without any downward revisions [9] Conclusion - Given the strong momentum indicators and positive earnings outlook, WWW is positioned as a solid investment opportunity with a Momentum Score of A and a Zacks Rank of 1 (Strong Buy) [11]

Core Insights - Wolverine World Wide, Inc. (WWW) reported strong second-quarter 2025 results, with revenues and earnings exceeding expectations, leading to a 14.8% increase in share price [1][10][17] Financial Performance - Adjusted earnings were 35 cents per share, surpassing the Zacks Consensus Estimate of 23 cents and significantly up from 15 cents in the prior-year quarter [4][10] - Total revenues reached $474.2 million, reflecting an 11.5% year-over-year increase and exceeding the consensus estimate of $450 million [5][10] - Direct-to-consumer revenues were $111.6 million, down 1.4% year over year, while international revenues increased by 15.7% to $250 million [5][11] Segment Performance - Active Group revenues rose 16.2% year over year to $355.5 million, surpassing the consensus estimate of $327.9 million [6] - Work Group revenues increased 2.4% year over year to $107.5 million, beating the consensus estimate of $104 million [6] - Revenues from the Other segment fell 21.7% year over year to $11.2 million, lagging behind the consensus estimate of $14.1 million [6] Brand Performance - Merrell's revenues increased by 10.7% to $157.9 million, while Saucony's revenues surged 41.5% to $144.3 million [7] - Wolverine's revenues declined by 7.5% to $37.1 million, and Sweaty Betty's revenues decreased by 6.1% to $41.3 million [7] Margins and Costs - Adjusted gross profit was $224 million, up 22.3% year over year, with a record gross margin of 47.2%, an increase of 410 basis points [8][10] - Adjusted operating costs rose 15.7% to $180.6 million, with the metric as a percentage of revenues increasing by 290 basis points to 9.2% [8] Future Outlook - For the third quarter, revenues are projected to be between $450 million and $460 million, indicating growth of 2.1-4.4% from the same period last year [14] - Expected gross margin for the third quarter is 47%, with adjusted earnings per share projected to be between 28-32 cents [16][17]

Financial Data and Key Metrics Changes - Revenue for the second quarter was $474 million, exceeding the high end of the outlook of $450 million, driven by stronger performance in both active and workgroups [31] - Ongoing revenue increased by 11.6% compared to the prior year, with a constant currency growth of 10.4% [32] - Adjusted diluted earnings per share rose to $0.35 from $0.15 in the prior year, reflecting strong revenue growth and gross margin expansion [38] Business Line Data and Key Metrics Changes - Saucony achieved a revenue increase of 42% in the quarter, with broad-based growth across regions and channels [34] - Merrell grew by 11%, marking its fourth consecutive quarter of growth, supported by strong wholesale performance [36] - Sweaty Betty's revenue declined by 6%, but this was an improvement compared to the first quarter, indicating progress in reestablishing the brand's premium positioning [36] Market Data and Key Metrics Changes - Global wholesale revenue was the primary driver of performance, with international growth slightly outpacing the U.S. [32] - The active group revenue increased by 16% compared to the prior year, led by Saucony and Merrell [33] - The workgroup revenue grew by 2% compared to the prior year, indicating a sequential improvement [36] Company Strategy and Development Direction - The company is focused on becoming a consumer-obsessed brand builder, emphasizing innovative and trend-right products [47] - A new brand building playbook has been effective, leading to improved revenue trends for five consecutive quarters [7] - The company is navigating a volatile macro environment and has taken actions to mitigate the impact of tariffs [7][40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's positioning to navigate ongoing changes in the global marketplace [7] - The outlook for the second half of the year anticipates moderated year-over-year growth compared to the first half due to timing shifts normalizing [43] - The company expects to continue seeing benefits from pricing discipline and cost initiatives, with gross margin anticipated to remain strong [58] Other Important Information - The company has made significant progress in reducing net debt, which was $568 million at the end of the second quarter, down 15% compared to the previous year [39] - The company is implementing strategic price increases on select products to offset tariff-related headwinds while maintaining investment in brand building [41] Q&A Session Summary Question: Follow-up on Saucony's growth in the second half - Management highlighted broad-based growth in both performance and lifestyle segments, driven by a reinvigorated product pipeline and effective storytelling [52][54] Question: Sustainability of current gross margin levels - Management expressed confidence in sustaining gross margins at current levels due to improved pricing discipline and cost initiatives [58][59] Question: Go-to-market strategy for DTC growth - Management acknowledged the need for improvement in the DTC channel and emphasized a focus on consistent messaging and innovative product flow [63][66] Question: Saucony's performance in newly expanded doors - Management indicated a strong focus on sell-through rates and responsible growth as they lap new door expansions [67][70] Question: Merrill's growth momentum and future outlook - Management noted that Merrill has gained market share and is well-positioned for future growth due to new product introductions and thoughtful distribution strategies [81] Question: Operating cash flow and leverage expectations - Management confirmed a focus on sustainable long-term profitable growth, with a bank-defined leverage of 2.9 times at the end of the second quarter, down from 3.9 times a year ago [88]

Financial Performance - Q2 2025 - Adjusted revenue reached $474 million, a 11.6% year-over-year increase, or 10.4% on a constant currency basis[47] - Gross margin was 47.2%, a 410 basis points increase year-over-year[47] - Adjusted operating margin was 9.2%, a 290 basis points increase year-over-year[47] - Adjusted EPS was $0.35, a 133.3% increase year-over-year, or 126.7% on a constant currency basis[47] Revenue Breakdown by Group - Q2 2025 - Active Group revenue was $356 million, a 16.2% year-over-year increase[49] - Work Group revenue was $108 million, a 2.4% year-over-year increase[51] Financial Outlook - Q3 2025 - Revenue is projected to be between $450 million and $460 million, representing a 3.3% increase at the midpoint, or 2.6% on a constant currency basis[58] - Gross margin is expected to be approximately 47.0%, a 170 basis points increase compared to the previous year[58] - Adjusted operating margin is expected to be approximately 8.3%, a 60 basis points increase compared to the previous year[58] - Adjusted EPS is projected to be between $0.28 and $0.32, representing a 3.4% increase year-over-year at the midpoint[58] FY24 Performance - Adjusted Revenue was $1.75 billion, a 507% increase compared to FY23[7,8] - Adjusted EPS increased 154%[9]

[Financial Highlights](index=1&type=section&id=FINANCIAL%20HIGHLIGHTS) Wolverine Worldwide exceeded Q2 2025 expectations with 11.5% revenue growth, record 47.2% gross margin, and strong EPS gains [Q2 2025 Performance Summary](index=2&type=section&id=Q2%202025%20Performance%20Summary) Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Y/Y Change | Constant Currency Change | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $474.2M | $425.2M | 11.5% | 10.3% | | **Active Group Revenue** | $355.5M | $305.9M | 16.2% | 14.3% | | **Saucony Revenue** | $144.3M | $102.0M | 41.5% | 40.0% | | **Gross Margin** | 47.2% | 43.1% | +410 bps | - | | **Operating Margin** | 8.6% | 6.8% | +180 bps | - | | **Adjusted Operating Margin** | 9.2% | 6.3% | +290 bps | - | | **Diluted EPS** | $0.32 | $0.17 | 88.2% | - | | **Adjusted Diluted EPS** | $0.35 | $0.15 | 133.3% | - | - The significant improvement in gross margin was attributed to a healthier sales mix, reduced promotional activity, and benefits from supply chain cost initiatives[5](index=5&type=chunk) [Balance Sheet and Inventory](index=2&type=section&id=Balance%20Sheet%20and%20Inventory) - Inventory at the end of Q2 2025 was **$316 million**, an increase of approximately **6.4%** compared to the prior year[6](index=6&type=chunk) - Net debt was reduced by **$99 million**, or **14.8%**, year-over-year to **$568 million** at the end of the quarter[6](index=6&type=chunk) [Business Outlook](index=3&type=section&id=Business%20Outlook) The company projects Q3 2025 revenue growth and adjusted diluted EPS, but withholds full-year guidance due to market uncertainties [Third Quarter 2025 Outlook](index=3&type=section&id=Third%20Quarter%202025%20Outlook) Q3 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | **Revenue (in millions)** | $450M - $460M | | **Revenue Growth (Ongoing Business)** | 2.1% to 4.4% | | **Gross Margin** | Approx. 47.0% | | **Operating Margin** | Approx. 7.3% | | **Adjusted Operating Margin** | Approx. 8.3% | | **Diluted EPS** | $0.24 - $0.28 | | **Adjusted Diluted EPS** | $0.28 - $0.32 | [Full-Year 2025 Outlook](index=3&type=section&id=Full-Year%202025%20Outlook) - The company is not providing a full-year 2025 outlook due to uncertainty around tariffs and related macro-economic conditions[8](index=8&type=chunk) [Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) This section presents unaudited consolidated financial statements for Q2 2025, highlighting net earnings of $26.8 million and total assets of $1,808.5 million [Consolidated Condensed Statements of Operations](index=6&type=section&id=Consolidated%20Condensed%20Statements%20of%20Operations) Q2 2025 Statement of Operations Highlights (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Revenue** | $474.2 | $425.2 | | **Gross Profit** | $224.0 | $183.2 | | **Operating Profit** | $40.7 | $29.1 | | **Net Earnings Attributable to WWW** | $26.8 | $14.2 | | **Diluted EPS** | $0.32 | $0.17 | [Consolidated Condensed Balance Sheets](index=7&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) Balance Sheet Highlights as of June 28, 2025 (in millions) | Account | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $141.0 | $148.3 | | **Inventories, net** | $316.0 | $297.1 | | **Total current assets** | $801.2 | $790.8 | | **Total assets** | $1,808.5 | $1,796.3 | | **Borrowings under revolving credit** | $135.0 | $225.0 | | **Long-term debt** | $563.5 | $579.7 | | **Total liabilities** | $1,451.5 | $1,525.9 | | **Stockholders' equity** | $357.0 | $270.4 | [Consolidated Condensed Statements of Cash Flows](index=8&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) Year-to-Date Cash Flow Highlights (in millions) | Cash Flow Activity | YTD Ended June 28, 2025 | YTD Ended June 29, 2024 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(39.2) | $(10.5) | | **Net cash (used in) provided by investing activities** | $(11.9) | $89.9 | | **Net cash provided by (used in) financing activities** | $35.3 | $(117.6) | | **Decrease in cash and cash equivalents** | $(11.1) | $(36.3) | [Non-GAAP Financial Measures and Reconciliations](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section details the company's non-GAAP financial measures, including adjusted and constant currency results, with reconciliations to GAAP for Q2 and Q3 2025 guidance - The company uses non-GAAP measures like **"adjusted" financial results** and **"ongoing business" results** to enhance comparability. "Adjusted" results exclude items such as reorganization costs and environmental costs, while "ongoing business" excludes the financial results of the divested Sperry business[9](index=9&type=chunk) - **Constant currency information** is presented to exclude the impact of foreign currency exchange rate fluctuations, calculated by converting current period results using prior period exchange rates[9](index=9&type=chunk) [Q2 2025 Reconciliation Tables](index=9&type=section&id=Q2%202025%20Reconciliation%20Tables) Q2 2025 Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS | Description | GAAP Basis | Adjustments | Divestitures | As Adjusted | | :--- | :--- | :--- | :--- | :--- | | **EPS - Fiscal 2025 Q2** | $0.32 | $0.03 | — | $0.35 | | **EPS - Fiscal 2024 Q2** | $0.17 | $(0.03) | $0.01 | $0.15 | Q2 2025 Reconciliation of Reported Operating Margin to Adjusted Operating Margin | Description | GAAP Basis | As Adjusted | | :--- | :--- | :--- | | **Operating Margin - Fiscal 2025 Q2** | 8.6% | 9.2% | | **Operating Margin - Fiscal 2024 Q2** | 6.8% | 6.3% | [Q3 2025 Guidance Reconciliation Tables](index=12&type=section&id=Q3%202025%20Guidance%20Reconciliation%20Tables) Q3 2025 Guidance Reconciliation | Metric | GAAP Basis | Adjustments | As Adjusted | | :--- | :--- | :--- | :--- | | **Operating Margin** | 7.3% | 1.0% | 8.3% | | **Diluted EPS** | $0.24 - $0.28 | $0.04 | $0.28 - $0.32 |

Core Viewpoint - Wolverine World Wide is expected to report a year-over-year increase in earnings and revenues for the quarter ended June 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The upcoming earnings report is anticipated to show earnings of $0.22 per share, reflecting a +46.7% change year-over-year, and revenues of $446.48 million, which is a 5% increase from the previous year [3]. - The consensus EPS estimate has been revised 4.12% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP of +5.75% indicates a likelihood of Wolverine beating the consensus EPS estimate, supported by a Zacks Rank of 2 [12]. - Historical performance shows Wolverine has beaten consensus EPS estimates in the last four quarters, with a notable surprise of +63.64% in the last reported quarter [13][14]. Market Reaction Factors - The actual stock movement will depend on how the earnings report compares to expectations, with management's discussion during the earnings call playing a significant role in shaping future earnings expectations [2][15]. - While an earnings beat can positively influence stock prices, other factors may also affect market reactions, making it essential to consider broader market conditions [15][17].

Company Overview - Wolverine World Wide, Inc. (NYSE: WWW) is set to report its Q2 results on August 6th in post-market hours [1] - The company is expected to demonstrate strong brand momentum, particularly with its Merrell and Saucony brands [1] Investment Insights - The investment philosophy focuses on identifying mispriced securities by understanding the financial drivers of a company, often revealed through a DCF model valuation [1] - This approach allows for a flexible investment strategy that encompasses various stock prospects, assessing the risk-to-reward ratio [1]

Company Performance - Wolverine World Wide (WWW) shares increased by 7.2% to $23.36 in the last trading session, with a notable trading volume, and have gained 26.2% over the past four weeks [1] - The company's performance is bolstered by strong momentum in its Active Group, improved gross margins due to lower discounting, and solid international growth from a streamlined distribution network [2] - Wolverine is expected to report quarterly earnings of $0.22 per share, reflecting a year-over-year increase of 46.7%, with revenues projected at $446.48 million, up 5% from the previous year [3] Earnings Estimates and Trends - The consensus EPS estimate for Wolverine has been revised 4.1% higher in the last 30 days, indicating a positive trend that typically correlates with price appreciation [4] - Empirical research suggests a strong correlation between earnings estimate revisions and near-term stock price movements, highlighting the importance of monitoring these trends [3][4] Industry Context - Wolverine is part of the Zacks Shoes and Retail Apparel industry, which includes competitors like Adidas AG (ADDYY), whose stock closed 0.2% lower at $118.88 and has returned 2.9% over the past month [4] - Adidas' consensus EPS estimate has decreased by 1.8% to $1.12, representing a year-over-year change of 89.8%, and it also holds a Zacks Rank of 2 (Buy) [5]

Company Overview - Wolverine World Wide (WWW) currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy) [2][3] - The company has shown strong performance metrics, with shares up 5.26% over the past week, while the Zacks Shoes and Retail Apparel industry is down 2.19% during the same period [5] - Over the last three months, shares of WWW have increased by 60.86%, and over the last year, they have gained 46.01%, significantly outperforming the S&P 500, which moved 22.7% and 15.9% respectively [6] Trading Volume - The average 20-day trading volume for WWW is 1,244,473 shares, indicating a bullish sign as the stock is rising with above-average volume [7] Earnings Outlook - In the past two months, one earnings estimate for WWW has moved higher, increasing the consensus estimate from $1.05 to $1.07 for the full year [9] - For the next fiscal year, one estimate has also moved upwards with no downward revisions during the same period [9] Conclusion - Given the strong performance metrics and positive earnings outlook, WWW is positioned as a promising investment opportunity with a Momentum Score of B [11]