Moody’s Ratings upgraded Wolverine World Wide, Inc.’s debt ratings due to the company’s “improved operating performance, leverage and liquidity, supported by the turnaround in its two largest brands, Merrell and Saucony.”
The upgrades also incorporate governance considerations, including the company’s continued debt reduction, according to the rating agency’s press release. Moody’s-adjusted debt/EBITDA declined to 4.1x as of April 4, 2026, from 5.3x as of June 30, 2025, while EBITA/interest expense improved to 3.7x from 2.8x. Moody’s said, “Merrell and Saucony, which represent almost two-thirds of revenue, continue to benefit from product innovation, broader distribution and strong sell-through, with Merrell supported by momentum in hiking and trail running and Saucony by strength in both performance running and lifestyle.”
Ratings upgrades include Wolverine’s corporate family rating (CFR) to B1 from B2, probability of default rating (PDR) to B1-PD from B2-PD and senior unsecured global notes rating to B2 from B3. The speculative-grade liquidity rating (SGL) was upgraded to SGL-2 from SGL-3, and the outlook remains stable.
The SGL upgrade to SGL-2 from SGL-3 reflects Moody’s expectations for good liquidity over the next 12-to 18-month period, including $60 million to $80 million of annual free cash flow, significant availability under the $600 million revolving credit facility, ample covenant cushion, and no near-term debt maturities.
Moody’s said in its analysis, “Wolverine’s B1 CFR reflects the company’s ownership of Merrell and Saucony, which are well-recognized brands in the outdoor and running categories, respectively. The company’s turnaround and portfolio rationalization since 2024 has significantly improved profitability. Merrell and Saucony drove a significant portion of earnings growth, reflecting reduced promotions, improved planning and supply chain processes, product innovation, marketing, new retail and wholesale distribution, and investments in information technology. Over the next 12-to-18 months, we expect mid-single-digit revenue and earnings growth, supported by Merrell and Saucony, and gradual stabilization and improvement in the rest of the portfolio, partly offset by higher costs, including marketing. We project Moody’s-adjusted debt/EBITDA to decline to mid-3x over the next 12-to-18 months, reflecting earnings improvement and revolver paydown, while EBITA/interest expense improves to mid-4x.
“At the same time, Wolverine’s brands have limited scale and operate in highly competitive and fashion-sensitive footwear and apparel categories. In addition, the company has yet to turn around its smaller brands. Sweaty Betty is stabilizing by reinvesting in its core UK market, and the Wolverine brand has continued to decline. The company’s other brands, representing about 16 percent of revenue, are very small and have low direct-to-consumer penetration, limiting their ability to leverage customer insights. The company is also subject to social and environmental risks, including remaining remediation and litigation exposure related to per- and polyfluoroalkyl substances (PFAS) at its former tannery facility.
“The stable outlook reflects our expectations for earnings growth, debt reduction and at least good liquidity.”
Image courtesy Merrell
