Is International Expansion the Key to Wolverine World Wide's Next Leg of Growth?

Wolverine World Wide's Q3 2025 results underscore a compelling narrative of strategic reinvention, with international expansion emerging as a central driver of its growth trajectory. Total revenue rose 6.8% year-over-year to $470.3 million, fueled by double-digit gains in its Active Group portfolio and a 13.5% surge in international sales to $242.7 million according to the company's financial report. At the heart of this momentum are Saucony and Merrell, which together accounted for nearly two-thirds of the company's revenue in fiscal 2025. Their performance in Asia-Pacific (APAC) and Europe, Middle East, and Africa (EMEA) markets, bolstered by flagship stores, city activations, and resilient brand equity, suggests that global expansion could be the linchpin of Wolverine's next phase of value creation-even as it navigates tariff headwinds.

Saucony and Merrell: Powering 15-40% International Growth

Saucony's Q3 revenue surged 27% year-over-year to $133.1 million, with international markets contributing a staggering 41.5% growth. This acceleration reflects Wolverine's targeted "key city" strategy, including flagship store openings in Tokyo and London, alongside high-impact activations in urban centers to amplify brand visibility. Merrell, meanwhile, posted a 5.1% revenue increase to $167.3 million, driven by strong demand for hiking and trail footwear in APAC and EMEA. Both brands have leveraged premiumization-raising prices while maintaining demand-alongside product innovation to capture market share in premium segments.

The company's focus on brand equity has been critical. In EMEA, Merrell retains leadership in France's outdoor footwear market, while Saucony's performance running and lifestyle lines have resonated with consumers seeking high-quality, trend-aligned products according to market analysis. These strategies have translated into higher conversion rates and spending per transaction, particularly in direct-to-consumer (DTC) channels, which Wolverine has prioritized to deepen customer relationships and control pricing.

Supply Chain Resilience and Tariff Mitigation

Despite these gains, Wolverine faces significant challenges. Tariffs loom large, with the company estimating an unmitigated annual impact of $65 million starting in 2026. However, its proactive supply chain adjustments have already softened the blow. By shifting sourcing away from China-now less than 10% of its production-and diversifying manufacturing, Wolverine reduced its 2025 tariff exposure to $10 million from an initial $20 million estimate. Timing shifts, dual-sourcing flexibility, and redirecting products to markets with fewer restrictions have also contributed to a 40-basis-point gross margin improvement in Q3 2025 according to earnings call data.

CEO Chris Hufnagel has emphasized that pricing strategies will further offset tariff pressures while preserving brand equity. "We're not just adjusting costs-we're redefining value," he noted during the Q3 earnings call, highlighting how premiumization and product innovation justify higher prices. These measures, combined with gross margin expansion to 47.5% in Q3 2025, demonstrate Wolverine's ability to balance cost control with brand strength.

Strategic Priorities: Brand-Building and Execution

Hufnagel's roadmap for growth hinges on three pillars: brand-building, new strategies, and improved execution. The Active Group's success in international markets validates this approach. For instance, Saucony's Tokyo flagship store has become a cultural touchpoint, blending athletic performance with lifestyle aesthetics to attract a new generation of consumers. Similarly, Merrell's city activations in EMEA have reinforced its identity as a leader in outdoor exploration, aligning with regional trends toward active lifestyles.

The CEO has also acknowledged weaknesses in the Work Group and the core Wolverine brand, which saw revenue declines of 2.9% and 8.2%, respectively. Yet, by reallocating resources to high-growth segments and exiting underperforming markets, the company is sharpening its focus on brands with scalable international potential.

Investment Case: Global Momentum and Margin Resilience

Wolverine's 2025 revenue guidance of $1.85 billion to $1.87 billion reflects 6-6.8% year-over-year growth, with international markets and DTC performance as key tailwinds according to industry analysis. For investors, the company's ability to drive 15-40% revenue growth in APAC and EMEA through brand-led strategies-while mitigating supply chain risks-presents a compelling case. The Active Group's momentum, supported by a 280-basis-point gross margin expansion year-to-date according to market reports, suggests that Wolverine can sustain profitability even amid macroeconomic headwinds.

However, the looming $65 million tariff impact by 2026 remains a risk. Success will depend on the company's ability to maintain pricing power and further diversify its supply chain. If Wolverine can replicate its APAC and EMEA playbook in other regions while refining its cost structure, international expansion could indeed unlock the next leg of growth.