Wolverine World Wide's Q1 2025: Unpacking Contradictions in Tariff Strategies, Market Share, and Inventory Management
Earnings DecryptMonday, May 19, 2025 10:51 am ET
2min read
Tariff impact mitigation strategy, impact of extra week in Q4 2024, Merrell and Saucony distribution and market share, strategic response to tariffs and supply chain diversification, inventory management and demand planning are the key contradictions discussed in Wolverine World Wide's latest 2025Q1 earnings call.
Strong First Quarter Financial Performance:
- Wolverine World Wide reported over 5% revenue growth on an ongoing basis and nearly 7% on a constant currency basis for Q1 2025.
- The growth was driven by strong contributions from Saucony and Merrell brands, with improved gross margins and earnings that increased by more than 3 times compared to the previous year.
Saucony Brand Momentum:
- Saucony delivered 30% revenue growth year-over-year in Q1, with broad-based contributions and a 400 basis points increase in gross margin.
- This growth was attributed to strong demand in performance run and lifestyle segments, improved average selling prices, and market share gains in the run specialty channel.
Merrell Brand Expansion:
- Merrell's revenue grew by 13% compared to Q1 last year, with significant contributions from Asia Pacific and EMEA regions.
- The growth was driven by market share gains in hiking, trail running, and lifestyle categories, along with strategic product innovations that improved average selling prices.
Sweaty Betty Margin Improvement:
- Sweaty Betty achieved a 1,000 basis points improvement in gross margin year-over-year, driven by a full-price mix improvement of the same amount.
- The improvement was due to efforts to reduce promotional activities and shift towards a less promotional business strategy, enhancing the brand's long-term health.
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Strong First Quarter Financial Performance:
- Wolverine World Wide reported over 5% revenue growth on an ongoing basis and nearly 7% on a constant currency basis for Q1 2025.
- The growth was driven by strong contributions from Saucony and Merrell brands, with improved gross margins and earnings that increased by more than 3 times compared to the previous year.
Saucony Brand Momentum:
- Saucony delivered 30% revenue growth year-over-year in Q1, with broad-based contributions and a 400 basis points increase in gross margin.
- This growth was attributed to strong demand in performance run and lifestyle segments, improved average selling prices, and market share gains in the run specialty channel.
Merrell Brand Expansion:
- Merrell's revenue grew by 13% compared to Q1 last year, with significant contributions from Asia Pacific and EMEA regions.
- The growth was driven by market share gains in hiking, trail running, and lifestyle categories, along with strategic product innovations that improved average selling prices.
Sweaty Betty Margin Improvement:
- Sweaty Betty achieved a 1,000 basis points improvement in gross margin year-over-year, driven by a full-price mix improvement of the same amount.
- The improvement was due to efforts to reduce promotional activities and shift towards a less promotional business strategy, enhancing the brand's long-term health.
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