Wolverine Stock Gains 10% After Q2 Earnings Beat, 2026 Outlook Raised

Wolverine World Wide, Inc. WWW reported solid second-quarter 2026 results, with both the top and bottom lines surpassing the Zacks Consensus Estimate. Revenues and earnings increased year over year.

The company continued to benefit from strong momentum at its two largest brands, Merrell and Saucony, while progress at Wolverine and Sweaty Betty supported broader portfolio improvement. Management highlighted stronger brand execution, increased consumer demand and market share gains across key categories. The company raised its 2026 outlook, reflecting confidence in its growth trajectory and operating performance. As a result, shares of WWW increased 10% yesterday.

Insight Into WWW’s Q2 Performance

The company posted adjusted earnings of 40 cents a share, which beat the Zacks Consensus Estimate of 38 cents by 5.3%. The figure improved 14.3% from adjusted earnings of 35 cents in the prior-year quarter. At constant currency, earnings per share were 38 cents, up 8.6% from 35 cents in the prior-year quarter.

Total revenues were $506.4 million, up 6.8% year over year on a reported basis. The top line surpassed the Zacks Consensus Estimate of $502 million by 0.8%. Growth was led by Merrell and Saucony, while wholesale revenues advanced 8% on a constant-currency basis.

Direct-to-consumer revenues were $111.7 million, essentially flat year over year. WWW’s international business revenues increased 10.9% to $277.2 million.

Regarding segments, Active Group revenues increased 9.3% year over year to $388.4 million. However, the segment’s revenues lagged the Zacks Consensus Estimate of $390.8 million. Work Group revenues declined 1.6% to $105.8 million and beat the consensus estimate of $105.7 million. Revenues of the Other segment increased 8.9% to $12.2 million. Also, the metric surpassed the consensus estimate of $11.2 million.

Wolverine’s Brand Momentum Broadens

Merrell revenues increased 11.1% year over year to $175.5 million or 10.3% on a constant-currency basis. Management cited healthy sell-through in core franchises, including the Moab 3, Moab Speed 2 and Agility Peak 6, along with strong international gains.

Saucony revenues increased 9.9% to $158.6 million. The brand gained market share at U.S. run specialty and continued to build momentum across performance and lifestyle categories.

Wolverine revenues climbed 6.6% to $39.6 million, supported by stronger key franchises and marketplace improvements.

Sweaty Betty revenues declined 2.4% to $40.3 million amid the planned reset of its U.S. business, though management said the brand grew about 3% excluding that reset.

The Zacks Consensus Estimate for revenues was pegged at $170.5 million for Merrell, $170.3 million for Saucony, $36.4 million for Wolverine and $39.2 million for Sweaty Betty.

Wolverine’s Margins & Costs

Gross profit was $235.3 million, up 5% year over year. Gross margin was 46.5%, down 70 basis points from 47.2% in the prior-year quarter. The decline primarily reflected the impact of higher U.S. tariffs, partially offset by price increases and other tariff mitigation initiatives.

Adjusted operating costs increased 2.4% year over year to $184.9 million. As a percentage of revenues, adjusted operating expenses leveraged 40 basis points year over year.

Adjusted operating profit increased 14.3% year over year to approximately $50.6 million, while the adjusted operating margin improved 80 basis points to 10%.

Wolverine’s Balance Sheet Gets Stronger

Cash and cash equivalents were $158.5 million at quarter-end, compared with $141 million a year earlier. Net debt fell 22% year over year to $443 million, while long-term debt stood at $547.1 million.

Inventory declined 17% year over year to $269.3 million. For the first half of fiscal 2026, operating cash flow was $3.4 million compared with an outflow of $39.2 million in the prior-year period.

WWW Provides Q3 View

For the third quarter, revenues are projected to be between $495 million and $500 million, indicating approximately 5.8% reported growth at the midpoint versus the prior-year quarter. On a constant-currency basis, revenues are expected to increase 6.5% at the midpoint. The Active Group is anticipated to deliver high-single-digit growth, while the Work Group is expected to remain approximately flat year over year.

The third-quarter gross margin is expected to be approximately 47.4%, down 10 basis points from the prior year. The outlook reflects an estimated unmitigated tariff impact of 180 basis points and a modest headwind from higher oil prices on freight costs. These pressures are expected to be largely offset by mitigation actions and other business initiatives.

The adjusted operating margin is projected to be approximately 10.4%, an improvement of 130 basis points year over year, as revenue growth and disciplined cost management are expected to more than offset the impact of higher tariffs and elevated oil prices on gross margin. As a result, adjusted earnings per share are expected to range from 42 cents to 45 cents compared with 36 cents in the prior-year quarter.

WWW Raised 2026 Outlook

Wolverine Worldwide raised its 2026 revenue outlook to $1.98-$2 billion from the previous range of $1.96-$1.985 billion. The updated guidance represents reported revenue growth of approximately 6.2% at the midpoint. The company maintained its foreign currency assumption of an estimated $14 million benefit compared with the prior year.

Fiscal 2025 included a 53rd week in the fourth quarter, which contributed approximately 70 basis points to full-year revenue growth, primarily within the direct-to-consumer business. Excluding the 53rd week and on a constant-currency basis, WWW expects revenues to increase approximately 6.1% at the midpoint. On a constant-currency basis, Active Group revenues are expected to increase at a high-single-digit rate, up from the prior mid-single-digit growth outlook. Work Group revenues are expected to remain approximately flat compared with 2025.

At the brand level, the company raised its Saucony growth outlook to the mid-teens compared with the high end of its previous low- to mid-teens range. The company continues to expect Merrell revenues to grow at a mid-single-digit rate, while Sweaty Betty is expected to decline at a low-single-digit rate and Wolverine is projected to remain approximately flat compared with 2025.

Gross margin is expected to be approximately 46.9%, up from the prior outlook of 46.4%. The improvement primarily reflects stronger marketplace execution, supply chain efficiencies and modestly lower tariffs. The updated guidance assumes existing tariff rates remain in place for the balance of 2026, reducing the estimated unmitigated tariff impact by approximately $2 million compared with the previous outlook. The guidance excludes any refund related to the $36 million of IEEPA tariffs previously paid. 

Adjusted operating margin is projected to be approximately 9.9%, compared with the prior outlook of 9.5%. The improvement reflects higher gross margin and meaningful operating leverage, partly offset by strategic investments in brands and key capabilities. As a result, adjusted earnings per share are expected to range from $1.55 to $1.65 compared with the previous range of $1.43-$1.58. WWW raised its operating free cash flow outlook to $115-$130 million from $105-$120 million previously. Capital expenditures are expected to remain approximately $20 million.

WWW Stock Past Three-Month Performance

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Over the past three months, shares of this Zacks Rank #3 (Hold) company have gained 30.3% compared with the industry’s 1.3% growth.

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