Moody’s Ratings upgraded Wolverine World Wide, Inc.’s debt ratings, citing the company’s turnaround efforts fueling “significant operating income growth and improvement in credit metrics.”
Wolverine’s corporate family rating was raised from (CFR) to B2 from B3, probability of default rating (PDR) to B2-PD from B3-PD, and senior unsecured global notes rating to B3 from Caa2. The speculative grade liquidity rating (SGL) remains unchanged at SGL-3, with a stable outlook.
The rating agency noted that Moody’s-adjusted debt/EBITDA has declined to 5.3x as of June 30, 2025, from 6.4x at year-end 2024, and EBITA/interest expense has improved to 2.8x from 1.8x. Sales have increased at Merrell and Saucony, which together accounted for 63 percent of Wolverine’s total revenue for the last twelve months, as both brands benefit from product innovation and broader distribution, driving growth in both performance and lifestyle categories. The company’s Moody’s-adjusted EBIT more than doubled in the first half of 2025, driven by higher revenue, a healthier sales mix, and supply chain initiatives, partly offset by increased brand investment. The upgrades also reflect Wolverine’s extension of its revolving credit facility to 2030 from 2026, as well as the repayment of its remaining $25 million term loan with revolver borrowings.
The two-notch upgrade of the senior unsecured notes rating to B3 from Caa2 also incorporates the smaller amount of secured debt in the capital structure following the refinancing, as the revolver was downsized to $600 million from $800 million.
In its analysis, Moody’s said, “Wolverine’s B2 CFR reflects the company’s relatively small scale and operations in the highly competitive footwear and apparel categories. The company has been executing a comprehensive turnaround, with strong improvement at its larger brands, Merrell and Saucony while revenue performance remains weak at Sweaty Betty and the Wolverine brand. In addition, the company’s other brands, representing about 16 percent of sales for the last twelve months, have very small scale and relatively low direct-to-consumer penetration, limiting the company’s ability to leverage customer insights. Wolverine 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.
“At the same time, the rating is supported by the company’s ownership of Merrell and Saucony, which are well-recognized brands in the outdoor and running categories. We expect modest earnings growth over the next 12-18 months, as the benefits of Wolverine’s continued turnaround efforts are partly offset by higher costs from tariffs and demand pressures as many consumers continue to spend cautiously. We project Moody’s-adjusted debt/EBITDA to decline to 4.4x, driven by revolver paydown and earnings improvement. The credit profile is also supported by the company’s adequate liquidity over the next 12-18 months, including modestly positive free cash flow, good excess revolver availability, good covenant cushion and lack of near-term debt maturities.
“The stable outlook reflects our expectations for deleveraging and the maintenance of at least adequate liquidity.”
Image courtesy Merrell
