After a year of work to stabilize and right-size the business, Wolverine Worldwide CEO Chris Hufnagel believes 2025 will see the company focusing on growth again. The company’s Saucony brand is getting the call in 2025 and will see incremental investment into a brand already showing promise.
“I think as we think about 2025 specifically, we’ve obviously 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. I think, historically, we just haven’t invested enough in our brands and our platforms. And this year, we’re doing a step-up in those investments, leading with investments behind Saucony, because we think that is the brand with certainly the most momentum.”
Hufnagel said the company sees tailwinds within the category, and he thinks Saucony has some of the greatest potential in the company’s brand portfolio.
“At the same time, we’ve got tools and platforms that we need to invest in as well as an organization,” he continued. “So, we’re stepping up those investments this year. We think it is the right thing to do to drive long-term sustainable growth for the organization. And we think it’s in the best interest of our brands and, certainly, at the end of the day, for our shareholders.”
The parent of Merrell, Saucony, Sweaty Betty, Wolverine Brand, and Caterpillar reported that consolidated 2024 fourth-quarter revenue fell 5.8 percent year-over-year but rose 3.3 percent to $494.7 million when tallying the company’s ongoing business in constant-currency terms.
Consolidated full-year revenue fell 12.3 percent year-over-year on an ongoing basis.
The Saucony business declined 5.3 percent (-5.2 percent in constant-currency terms) to $99.6 million in the fourth quarter, but that trend line is deceiving due to the shift in the brand’s operating model in Asia to a licensed and royalty model in Greater China. Adjusted for business model changes, Saucony reportedly increased 7 percent year-over-year in the fourth quarter, exceeding internal expectations.
The prior joint ventures between Xtep International and Wolverine Worldwide were terminated at the end of 2023 and began operating under new licensing and royalty agreements at the beginning of 2024. MS (China) Sports Company Limited is the latest direct wholly-owned subsidiary of Xtep International Holdings Limited, which operates under the licensing and royalty agreements for the Merrell and Saucony brands and subsidiaries in China.
For the three-month period ended December 31, 2024, MS (China) Sports Company Limited said the Saucony brand posted ~ 50 percent year-over-year growth for the offline and online retail channels in China. For the full year, the Saucony brand posted growth of over 60 percent year-over-year for the offline and online channels in China.
Back in the U.S., the Saucony brand reportedly grew in the low-teens. Saucony’s EMEA business was up more than 20 percent for the quarter. Hufnagel said the brand grew at much healthier price points and margins, expanding gross margin globally by more than 1,400 basis points.
“Saucony’s running business gained market share for the second consecutive quarter in the highly competitive and important U.S. run specialty channel,” Hufnagel added. “Serious runners have long respected the brand for its innovation, thanks to pinnacle, award-winning products like the Endorphin collection and now Saucony successfully making progress on the broader run lifestyle opportunity in part with what we call its core Four Franchises, the Ride, Guide, Prime and Hurricane.”
Across these key franchises, Hufnagel said the Saucony team has improved performance with enhanced technology and cushioning, elevated style with more versatile, wearable designs, and the consumer is responding.
In the fourth quarter, the company reported sell-through in the U.S. of its core four franchises to be up at retail by “very strong double-digits” year-over-year. To fuel the pace, Hufnagel said the brand opened 2025 with the introduction of the new Ride and Guide models, which are also off to a strong start.
“In a few weeks, Saucony will push its innovation to the next level with the launch of its highly anticipated new super shoe, the Endorphin Elite 2, built on next-generation IncrediRun foam and a full-length slotted carbon fiber plate for unmatched energy return,” the CEO noted.
During the Q&A session, Hufnagel was asked about the general health of the U.S. run specialty channel after strong growth years post-pandemic.
“The U.S. run specialty channel is a really special and important channel in the U.S. and certainly important to the performance running brands,” he began. “You’re right, running has been on a tear. And I’m pleased to report that Saucony is quickly catching up and beginning to gain share again after losing share for a number of years.”
The CEO continued, “It is a very competitive channel, as you know. We’re not seeing any significant weakening that that trend continues. The data lags a little, but still appears to be healthy. And I think our focus this year and some of the investments we’re going to make on Saucony are going to benefit that brand in those doors as we invest in the team’s ground game.”
On the Lifestyle side, Hufnagel said Saucony continues to leverage its “deep, authentic product archive to deliver trend-right styles to the marketplace,” led by the ProGrid Omni, Ride Millennium, ProGrid Triumph, and others. “And it continues to fuel brand heat with a powerhouse lineup of collaborations on these various platforms,” Hufnagel said.
“Last quarter, the brand dropped collections with J.Tips, Minted New York, Sarkal Paris, Homework, and Grayson,” he detailed. “The team has done a remarkable job in a very short period of time, enjoying the social and cultural discourse, and is now thoughtfully translating this newfound energy into meaningful growth.”
I’m also excited by the progress the brand is making in the Asia Pacific, elevating our partnerships in the region’s key markets and further expanding its branded store footprint.
“A year ago, I said I was bullish on the brand’s prospects,” Hufnagel noted. “And, today, I believe Saucony is on the cusp of doing something very special, leveraging its deep authentic running roots, its tremendous performance product credibility and the macro trends benefiting the category to leapfrog into a unique position at the intersection of running and culture, blurring the lines between performance and lifestyle.”
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,” she said.
Miller said Saucony is expected to drive outsized growth in 2025, increasing in the mid-teens, reflecting “category momentum, new launches in both performance and lifestyle products and expanded distribution.”
Images courtesy Saucony/Wolverine Worldwide
