Merrell and Saucony parent Wolverine, in reporting Q4 and FY24 results, said the first phase of its turnaround strategy, with its cost cuts and margin expansions, is complete.
Merrell and Saucony parent Wolverine, in reporting Q4 and FY24 results, said the first phase of its turnaround strategy, with its cost cuts and margin expansions, is complete. But the company’s business this year continues to face macroeconomic uncertainties within retail and the possible imposition of tariffs. The strategy to address these tariffs on its product imports from China will likely focus on sourcing diversification for its portfolio of brands.
In Q4, ended Dec. 28, Wolverine reported operating income of $39.8 million, compared with a loss of $186.9 million, as total revenues fell by 6 percent to $494.7 million. Net income was $25.3 million, against a loss of $90.6 million in the year-ago period. Gross margin jumped by 740 basis points to 44.0 percent from 36.6 percent.
Merrell sales increased by 1 percent to $163.4 million in the final period, as the outdoor brand gained market share in the US hiking and trail-running categories for the eighth time in nine quarters and expanded its gross margin by nearly 400 basis points. Merrell’s annual sales declined by 11.5 percent to $598.4 million, from $675.8 million.
The group’s current FY25 outlook calls for total revenues of $1.795 to $1.825 billion, or 2.5 to 4.3 percent overall year-over-year growth, with Merrell projected to increase its annual sales by mid-single digits – a rise fueled by contributions from key collections. The annual gross margin should expand by 100 basis points to approximately 45.5 percent, with operating margin estimated to be up by 190 basis points year-over-year to 7.7 percent.
Elsewhere, Saucony is forecast to deliver a mid-teens sales expansion in 2025, fueled by product launches, expanded distributions and a lifestyle-segment increase. In Q4, Saucony’s sales declined by 5.3 percent to $99.6 million – but were 7 percent higher when adjusted for business-model changes. Full-year Saucony revenues tumbled 18 percent to $406.5 million.
Sweaty Betty, which suffered a 5.9 percent Q4 sales drop to $63.4 million and 2.4 percent drop for the FY to $198.9 million, is aiming for a low-single-digits sales increase in 2025 by focusing on a stronger retail footprint and more profitable sales.
