After a year of work to stabilize and right-size the overall business, Wolverine Worldwide CEO Chris Hufnagel believes 2025 will enable the company to focus on growth again, especially in the Saucony and Merrell businesses.
“As we think about 2025 specifically, we’ve done a lot of work to stabilize the organization,” the CEO noted. “We’ve highlighted that, and we’re largely finishing talking about turnaround, and now we can focus on the next chapter, which is growth.”
Hufnagel continued, “We’ve made good progress, but I’m the first to admit we have more work to do. There’s no doubt Wolverine Worldwide is much stronger today than it was just 12 months ago, but the most important chapter is certainly the next one. While it’s still early in our inflection chapter, and I’m sure the path won’t be perfectly straight, our company is growing again, and our biggest brands are positioned to meaningfully grow this year.”
Hufnagel said it was the same story for Merrell.
“We worked hard to reposition that business. And our team has done a great job, resetting the U.S. wholesale landscape, engaging with long-term successful partners and how Merrell shows up each and every day on the sales floor,” Hufnagel said. “At the same time, opening up new distribution and taking the broader outdoor lifestyle opportunity and not just so focused on the trail. So, opening up new doors is there as well, not quite at the pace at which Saucony has opened, but pleased with the early returns, and especially for her.”
He acknowledged that Merrell is under-penetrated for the female consumer but also said the company has worked hard to evolve the product line.
“We have a new Chief Product Officer,” Hufnagel noted. “She brings a great track record of working for some great brands, but we’re very focused on her and the broader opportunity. So I’m glad you brought those two brands up, very encouraged by the progress we made in 2024 and excited for what those brands are going to do in 2025.”
Merrell posted its second consecutive quarter of growth in the 2024 fourth quarter, inching up just 1 percent year-over-year to $163.4 million, compared to $161.8 million in the 2023 fourth quarter. Hufnagel said the health of the business continued to improve as well, resulting in gross margin expansion of nearly 400 basis points year-over-year.
“In the U.S. hiking category, the brand once again grew and took significant market share during the quarter, its eighth time it has done so in the last nine quarters, while simultaneously gaining share in trail running,” the CEO detailed. “As a leader in hiking, Merrell remains focused on modernizing the trail through faster, lighter and more versatile products, including the Moab Speed 2 and Agility Peak 5.”
In Q4, Hufnagel said both franchises continued to establish themselves as important collections for the brand, adding revenue and fueling performance with key accounts.
“This more athletic product has also enabled the brand to partner with several of its key retailers over the last year to reshape their assortments on the floor and begin evolving consumer perception of the brand in the marketplace,” he noted.
Further advancing its push to modernize the trail, Merrell launched the disruptive SpeedARC Surge BOA franchise last month, one of Time‘s Best new inventions of 2024 and an ISPO award winner. The shoe’s advanced materials also include the brand’s latest SpeedARC platform, Float ProPlus Supercritical Foam, and a stabilizing FlexPlate for comfort with advanced energy return.
“So far [it] has exceeded our expectations in selling through quickly at nearly a $300 price point,” Hufnagel said. “Layer that support of the brand with the follow up of this introduction with a second style in the collection, the SpeedArc Matis.”
The CEO said Merrell continues to make steady progress on the Lifestyle side of the business. Tests with key accounts this year have demonstrated demand from younger consumers and driven an expansion of doors and revenue with U.S. specialty independents, growing by strong double-digits in the fourth quarter.
“Shipments of key performance franchises, including the Moab Speed 2, Agility Peak 5 and Moab 3 nearly quadrupled the lifestyle counts last quarter. Merrell is actively driving innovation in the category and its strategy to modernize the trail is gaining real traction around the world,” Hufnagel added. “In 2025, we’re taking a thoughtful approach, prioritizing those initiatives focused on our biggest growth opportunities that we believe will be the most impactful.”
Outlook
For the full year 2025, CFO Taryn Miller said the company expects revenue from the Active Group, which includes Saucony, Merrell and Sweaty Betty, to grow in high-single-digits on a constant-currency basis.
“New product launches, lifestyle expansion and focused go-to-market initiatives, including key city activations, are expected to drive growth in the Active Group,” Miller noted.
“Merrell is expected to grow by mid-single-digits [in 2025], building on second-half 2024 gains,” Miller said. “We expect key products, including the SpeedARC Collection, Moab Speed 2 and Agility Peak 5 will continue to drive the overall category.”
During the Q&A session, Hufnagel was asked about the specialty retail business and where the company sees the business growing. “We are certainly encouraged by the progress we have seen in Merrell, both in the performance piece and the lifestyle piece,” he said. “And you know as well as anyone, there have been really significant headwinds in that outdoor space, and Merrell is gaining share at the fastest rate since we’ve been tracking it, which we’re encouraged by.
“Specialty doors, obviously, there’s a lot of one-off specialty outdoor accounts that we worked hard with our team to reengage. At the same time, we’re opening up new lifestyle expansion. You’re going to begin to see and are seeing Merrell show up in a mall from a lifestyle perspective where we just — we haven’t been for years.
“So, a reset of that U.S. wholesale landscape, the team has done a very good job resetting the business and then engaging with them and moving beyond the core products that Merrell has been known for for years, and dropping new products, whether it’s the Moab Speed 2 or the Agility Peak 5, we’re encouraged by. So, nice steady progress, two consecutive quarters of growth for Merrell and encouraging news in the wholesale channel for Merrell, both here in the U.S. and EMEA.”
Images courtesy Merrell/Wolverine Worldwide
