Will Wolverine's Bet on Saucony & Merrell Pay Off in the Long Run?

Core Insights - Wolverine World Wide, Inc. (WWW) reported strong performance in Q1 2025, driven by flagship brands Saucony and Merrell, both achieving double-digit revenue growth and margin expansion [1][7] Group 1: Saucony Performance - Saucony's revenues increased by 29.6% year-over-year to $129.8 million, with significant growth in North America and more than doubling sales in the Asia-Pacific region [2][9] - The brand's gross margin improved by nearly 400 basis points due to a healthier mix of full-price sales and reduced promotional activity [2][9] - Key product lines such as Ride, Guide, Triumph, and Hurricane saw strong gains, while the Endorphin franchise grew over 30% year-over-year, driven by the launch of Endorphin Elite 2 [3] - Saucony expanded into 900 new lifestyle retail doors this spring and plans to add 400 more in the second half of 2025 [3] Group 2: Merrell Performance - Merrell recorded a 13.2% year-over-year revenue growth to $150.6 million, showing strong performance in Asia Pacific and EMEA, and gaining market share in the U.S. hiking category [5][9] - The brand's gross margin rose by more than 200 basis points, supported by premium pricing and efficient inventory management [5][9] - High-performing product lines included Moab Speed 2 and Agility Peak 5, with the new SpeedARC Surge Boa selling rapidly, indicating strong consumer demand for premium footwear [6] Group 3: Strategic Outlook - The combined performance of Saucony and Merrell reflects Wolverine's successful brand revitalization and strategic execution, positioning both brands for sustained growth throughout 2025 [7] - For Q2, the company expects revenues between $440 million and $450 million, indicating growth of 3.7-6% from the previous year [7]