Wolverine World Wide, Inc. 2026 Q2 Earnings Call

You may begin. Good morning, and welcome to our second quarter fiscal 2026 conference call.

On the call today are Christoph Hufnagel, President and Chief Executive Officer, and Taryn Miller, Chief Financial Officer. Earlier this morning, we issued a press release announcing our financial results for the second quarter of 2026 and guidance for fiscal year 2026. The press release is available on many news sites and can be viewed on our investor relations website at investors.wolverineworldwide.com. This morning's press release and comments made during today's earnings call include non-GAAP financial measures. These non-GAAP financial measures, including references to the ongoing business and constant currency revenue growth rates, were reconciled to the most comparable GAAP financial measures in attached tables within the body of the release or on our investor relations website.

I'd also like to remind you that statements describing the company's expectations, plans, predictions, and projections, such as those regarding the company's outlook for fiscal year 2026, growth opportunities, and trends expected to affect the company's future performance made during today's conference call are forward-looking statements under U.S. securities laws. As a result, we must caution you that there are a number of factors that could cause actual results to differ materially from those described in the forward-looking statements. These important risk factors are identified in the company's SEC filings and in our press releases. All revenue growth rates will be cited on a constant currency basis unless otherwise stated. With that, I will now turn the call over to Christoph Hufnagel.

Thanks, Jared. Good morning, everyone, and thanks for joining us on today's call. In the second quarter, our business results continued to track ahead of our expectations, driven by the team's strong execution of our global brand-building model. We delivered better-than-anticipated revenue, growing 6% against double-digit growth last year, with adjusted earnings per share growing 14%, reflecting healthy SG&A leverage, while at the same time investing in our strategic priorities and key growth drivers. Merrell and Saucony, representing approximately two-thirds of our business, continued to lead the way with revenue up 10% and 9% in the quarter respectively. We continue to make progress in building better brands, delivering compelling products, investing more in demand creation, and telling better stories, managing the marketplace more effectively, all leading to elevating our brands' positions in their respective markets. As a result, we're seeing the cumulative tangible effects of our consistent efforts.

Across our portfolio, our brands generated increases in consumer interest and took market share in their key categories. These gains in consumer demand are creating more consistent growth in the business, with the company having now delivered seven consecutive quarters of year-over-year growth. Given the strengthening of our brands, the solid results we drove in the first half, and the continued momentum we are seeing in the business, today, we are raising our guidance for the year, which Taryn will walk you through in a few minutes. Before handing the call over to her, I would like to share more on our brands, including the continued growth of Merrell and Saucony, as well as the progress we are making in applying our playbook to set Sweaty Betty and Wolverine on a path to more consistent growth. I will start with Merrell.

Merrell remains focused on modernizing the outside with faster, lighter, more versatile product design and elevated brand relevance. The brand's consistent execution of its strategy has resulted in sustained, meaningful growth and market share gains, and these trends continued in the second quarter. The brand delivered a double-digit increase in revenue, with growth in all regions and outsized increases internationally, where its key city strategy has helped amplify the brand's momentum. Globally, Merrell's It Starts Outside marketing platform, launched earlier this year, is creating brand consistency and lifting purchase intent with our consumers. To extend the platform, the team executed a host of community activations as part of its Outside in the City series, redefining the outdoors in several key global cities, including London, Paris, and New York, with more cities planned in the coming weeks.

Merrell once again had triple-digit basis point market share gains in the U.S. hike category, now with three in the top 10 styles. The brand's key franchises, the Moab 3 and Moab Speed 2, are exceptionally healthy, each driving significant double-digit growth in the second quarter. The iconic Moab 3 is respected on the trail and remains relevant with collaborations and rematerializations like the sought-after and sold-out Kakis collab and the recently dropped Jelly Pack. In trail run, Merrell continued to entrench its position with its title sponsorship of the Skyrunner World Series, composed of elite trail running races around the globe in locations such as China, Japan, France, Italy, Spain, Chile, Argentina, and right here in the U.S. Merrell-sponsored athletes currently claim seven spots in the top 15 men's and women's standings, including the top four ranked men in the series.

In the marketplace, the brand's Agility Peak 6 franchise continued to gain traction, up double digits globally versus the previous model's comparable first season. On the lifestyle side of the business, the Wrapt franchise continued to grow with additional silhouettes, more than doubling year over year at U.S. retail. The brand also continues to enhance its lifestyle offering with trend-right styles like the Moab 2 Wool Slide, the low-profile Relay, and hybrid Mary Janes on performance platforms including the Moab Speed 2 and Speed Arc, all of which are selling well. In June, the brand engaged influential partners at Paris Fashion Week as it continues to elevate its lifestyle profile globally and looks to accelerate the side of the business in 2027. Merrell is performing well, and the brand remains on track to deliver mid-single digit growth this year. Shifting to Saucony. We continue to believe that Saucony is uniquely positioned as a disruptive challenger brand at the intersection of two of the fastest-growing categories in the market, performance and lifestyle running.

In the second quarter, the brand drove solid growth in both categories around the world on top of 40% overall growth last year. Saucony's key city focus, which started in London a few years ago, continued to help fuel strong brand heat, consumer demand, and revenue growth, particularly in Europe. In London, the brand held one of its own Maze Run Club races early this year, once again sponsored the London 10K last month, and plans to sponsor the Shoreditch Half Marathon this fall.

In addition, Saucony expanded its key city strategy to Berlin with sponsorship of the Berliner Morgenpost Great 10K a couple of months ago and a broader activation plan underway, and then to Paris with a Maze race back in February and plans for a host of activations, a new Pioneer store, and title sponsorship of the Saucony 10K de la Tour Eiffel. Creating tenfold moments by sponsoring race events that each reach a broad running audience, flanked by a series of community activations, often in partnership with run clubs and key retail partners, has proven to be an effective strategy. Saucony's brand search interest was up meaningfully year-over-year in the first quarter globally with even faster growth in the U.K. This past quarter, the search interest growth rate accelerated by almost 2 times globally and more than tripled in the U.K., and France grew at an even significantly faster pace.

Sell-through trends in the EMEA region are also very strong, creating a healthy pull dynamic, which we are actively managing to cultivate sustainable growth, focusing on disciplined distribution and segmentation strategies. Because of these positive results, our key city playbook is now being adopted by some of our distribution partners around the world. Our latest Saucony store opened in Hong Kong in the second quarter, and there are already plans to activate in Istanbul and Bangkok this year with race sponsorship and Maze events, a store opening, and community activations on tap. In the performance running category, Saucony gained market share at U.S. run specialty in the quarter and showed well at the major marathons this spring, ranking in the top five most won brands at Boston and London, notably second among women at the Boston Marathon.

With the brand's Endorphin collection, its pinnacle offering for elite runners, Saucony launched a new version of its most innovative shoe, the Endorphin Elite 3, and plans to launch an all-new Endorphin model in 2027 that we believe will further elevate innovation and performance for serious runners. In Saucony's Core Four franchises, which are targeted towards a more casual runner, the brand introduced the new Triumph 24 and Hurricane 26 in the last couple of months, and they are driving franchise growth on saucony.com and are early selling with positive feedback from our wholesale partners. Saucony also continued to fuel brand heat in its lifestyle business with compelling styles and thoughtfully selected collaborators who are helping develop the brand's relevance on several different dimensions.

In the second quarter, the brand dropped collaborations with Studio Nicholson, Grayson, Engineered Garments, and Minted New York, the last of which was launched at an event hosted at our Covent Garden Pioneer store in London, generating exceptional brand energy. Later this month, the brand plans to drop a highly anticipated collaboration with West Gunn, building on a partnership that continues to strengthen the brand's credibility in streetwear and culture. In June, Saucony launched the ProGrid Ride 1 as part of its extensive Paris Fashion Week presence, including a host of activations of influential collaborators, retailers, and consumers. The brand also introduced the Kinvara 1 and ProGrid Paramount in top of the pyramid distribution, while the ProGrid Omni 9 continued to drive growth globally.