Not much changed with the story management wants to tell: key city strategy is working for Saucony and they looking forward to expanding that to other brands moving forward. Product pipelines “look very good”. Big opportunity in lifestyle. Growth this quarter was “strongest of the year”, which to be fair is coming during a challenging time for the industry.
At the end of the day they maintained constant currency brand revenue guidance for Merrell, Saucony, and Betty but LOWERED Wolverine (down LSD from flat before). Kind of takes some of the excitement out of that raise in total revenue guidance to $2.00-$2.01 billion from $1.98-$2.00. Kummetz went at this in Q&A – good job man, surprised it took so long into Q&A for somebody to ask this. They said “there is a range within mid teens” and that’s the reason why.
Speaking of, all of the major brands have the same reported revenue guidance and constant currency revenue guidance except for Merrell. Poser kind of went at this in Q&A and they said they saw balanced growth for Merrell between international and US.
9th consecutive quarter of growth for Merrell. “Encouragingly” DTC up MSD. Moab Speed 3 launches in 1Q. Have plans to launch new Adapt series for trail running. See strong sell through of core franchises at retail. Andreeva got some more color from Chris in Q&A said “nothing extraordinary to report other than just a good consistent business that we’ve built there”. Merrell has international shipment timing shift from 4Q to 1Q but for some reason management refused to put a number on that – come on man!
Saucony had double digit growth in both wholesale and retail. Website was up mid-teens. US and EMEA has strong growth in performance run while lifestyle was EMEA and DTC. Endorphin Azure on pace to be biggest franchise launch in brand’s history. Endorphin Speed 6 launched a few weeks ago already a top seller on website and selling through well at retail. They expect the Endorphin Zenith to be a “game changing shoe”. They did see additional promotional activity in the broader US market but Saucony saw a decline in promotions overall. Will expand key city strategy in 2027 in US and APAC.
They believe Sweaty Betty and Wolverine will also contribute to growth “over time”. Betty was down 3% excluding the US as they focus on fixing the UK. Betty stores up LSD with a double digit increase in search interest. Wolverine gained meaningful market share in all price tiers above $100 and had a “significant” reduction in “planned” promotional days in marketplace YTD. Should see stronger year of product innovation in 2027 with new Raptor featuring TriGrip technology in 1Q.
“Pricing” was very first factor they mentioned when talking about how they offset tariff and supply chain pressures. Lapping 80 bps benefit of net tariff impact in 4Q so expected pressure in 4Q is just a comparison issue. Have to go back and look at this because would assume mitigation was through pricing last year and they are still getting a lift from pricing. They have healthier inventories and more brand heat that leads to more full price sales. High end of gross margin guide is structural improvement.
*These are our unabridged quick thoughts and notes from the call. We get them out as soon as possible after the call ends (not edited). Management has given some topics to dig deeper into and will circle back afterwards with much more in depth work on what was mentioned. You can find that work (and more on Wolverine Worldwide and other retail/consumer research) at our website here: M Squared Capital
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Originally posted on X and Substack.