🧠 Takeaways:
Wolverine the 143-year-old boot company is drowning in a portfolio of non-overlapping brands and bad debt. Time for us to set them free.
Spin out the Active Group into an IPO and set the winners free.
Turn the boot biz into every work brand's shoe department + Home Depot's white label.
Dump Sweaty Betty and Chaco. License out Saucony's apparel.
Let’s Examine This Biz
Note: As always, none of what follows is legal, tax, investing, financial, or any other sort of advice. And I was never here 😉.
Wolverine World Wide (Michigan's 143-year-old boot company that owns a portfolio of rando brands) just had its best year in a while. Rev +7%. Net income more than doubled.
And no one cares. The stock is going no where.
The portfolio of brands: Saucony, Merrel, Sweaty Betty, Hush Puppies, Wolverine (OG brand) and made for boot brands like Caterpillar and Harley Davidson. Most are dying.
Today we're buying Wolverine to break up this can’t-co and unlocking $2B in value.
Financial Summary
Stock price: $19.20
Market Cap: ~$1.6B
L5 Performance: -37%
P/E Ratio: 15
FY 2025 Financial Statements (YoY Comparison)
Rev: $1.9B (+7%) 😐
Gross Profits: $887m (+14%) 👍
OPEX: $730m (+6%) 😐
Net Income: $96m (+112%) 🥳
FCF: $126m (-22%) 😬
Competitive Benchmarking
(GAAP, most recent FY each, fiscal years not aligned)
Metric | WWW | Deckers | Crocs | On | Columbia | Steve Madden |
Revenue Growth | +6.8% | +9.8% | -1.5% | +30.0% | +0.9% | +11.0% |
Gross Margin | 47.3% | 57.7% | 58.3% | 62.8% | 50.5% | 41.4% (1) |
Operating Margin | 8.0% | 23.1% | 3.7% (2) | 12.5% | 6.1% | 3.2% |
FCF Margin | 6.7% | 20.1% | 16.3% | 9.3% | 6.4% | 4.7% |
DTC % of Rev | 25.4% | 41.4% | 52.1% | 41.8% | 47.6% | 33.4% |
TLDR Analysis: Rev +7% to $1.9B. Saucony is essentially all of the growth.
Gross margin hit 47%, but still -10% to Deckers.
Net income +112% but Real. But FCF -22%. Dumping last year’s inventory cleaned up the mess.
Their HQ admin eats 58% of what the brands actually earn. There are no real synergies. 2 brands and dragging the rest of the company into growth and profitability.
Pretty simple this shouldn’t be a portco model anymore. They still haven’t shed enough dead weight.
Let’s TLDR This Biz
Founded:
1883, by G.A. Krause and Fredrick Hirth, who bought a small leather shop in Grand Rapids, MI for $2,900.
Built a plant in Rockford in 1901.
Added a tannery in 1908.
Aha Moment:
1958, Hush Puppies. A casual shoe in what the company itself calls a "boring, brown shoe category."
Then 1994. Caterpillar handed them the Cat name for footwear. Lesson learned: you don't need to own a brand to sell it in 140 countries.
Growth:
Bought brands. Lots of them. Merrell in 1997. Saucony, Sperry, Keds and Stride Rite in a $1.23B deal in 2012. Sweaty Betty for $417M in 2021.
Model:
Design it, market it, have someone else make it. Wolverine owns zero factories.
~75% of sales go through wholesale partners in ~170 countries.
Rents brands in (Cat, Harley-Davidson). Rents brands out (Hush Puppies, Stride Rite).
Where We Are Now:
Already halfway through a garage sale. Keds sold in 2023. Sperry to Authentic Brands in 2024. All China business handed to Xtep. Hush Puppies fully licensed out.
Saucony is the only thing working.
Let’s Unwind This Biz
Here are the 3 moves to clean up Wolverine before the boots drag Saucony down w/ them.
1) Spin Out the Active Unit
Wolverine is 2 businesses that share an HQ and nothing else.
The Active Group (Merrell, Saucony, Sweaty Betty, Chaco) did $1.4B in sales (+13% YoY). 18% unit operating margin.
The Work Group (Wolverine, Cat, Bates, HYTEST, Harley) did $422M (-7% YoY).
The whole company trades at ~$1.6B.
Put Active on Steve Madden's 1.22x sales and it's worth ~$1.7B by itself.
The market is valuing the boots, the licenses and the HQ at ~$0.
Split it out.
IPO the Active Group as its own stock and issue 20% float to raise capital to pay off debt and get some fresh cash on the books. Wolverine owners still own 80% of the newco.
The NEW model:
Each brand (Merrell & Saucony) gets its own CEO. Branding, marketing and customer support live inside each brand.
One lean backend underneath for sourcing, distribution and retail ops.
Then go direct.
Today 25% of Wolverine sales are DTC. by comparison Deckers 41%. Crocs 52%.
The brands w/ the best margins own the customer.
Set the winners free. Every other Running brand is having a moment. Saucony and Merrell can as well. Once they’re unburdened from the dying Work Group.
Takeaway: Let your best run wild. Don’t let the losers hold them back.
2) Become Every Work Brand's Bootmaker
One of Wolverine’s smallest but strongest divisions is making boots for other brands. Caterpillar and Harley Davidson boots are actually made by Wolverine. They’ve been making Caterpillar’s for 32 years.
Build this as a white label power house. The fact that:
Sketchers makes John Deere is criminal.
Ford went to Timberland PRO.
Bobcat went to SCL Footwear.
This could have been a high margin $1B biz for Wolverine (They don’t manufacture the product, just design and sell through wholesale).
We’re hiring a team of Partnership/Collab Managers to bring in the best Work brands to make their boots through Wolverine.
Stanley Black and Decker
DeWalt
Rocky
And the crown jewels producing white label boots for The Home Depot and Lowe’s. The volume of sales that either brand could capture higher margin than branded boots in stores will be a massive win win.
Tractor Supply's brands are ~30% of $15.5B in sales.
Boot Barn's own brands hit 40% of sales.
If we land 1 mega retailer this is a $1B+/yr topline biz and the Work brand is a legit brand again.
Takeaway: What thing is winning the most. Do the most of that thing.
3) Only Focus on Footwear
The Sweaty Betty 2021 Acquisition was so smart, but a terrible move. Especially considering Wolverine paid $417M for Sweaty Betty in 2021.
The brand did $193M last year. Contracting for the 3rd straight year. Wolverine has already written the value down.
The last straggler in their Active Group is Chaco (Small sandal brand).
Saucony + Merrell on their own grew +18% last year. The whole group grew +13% YoY.
Sweaty Betty isn't a shoe company. Chaco is too small to matter. Both pull focus from the 2 brands actually working.
Deckers did this exact move. Sold Sanuk. Killed Koolaburra. Today HOKA + UGG are 97% of sales at a 23% operating margin rivaling On for the best in footwear.
Extending into Apparel was a good idea, but not their zone of genius. Wolverine LOVES licensing IP (Merrill -Apparel, kid’s shows, their whole China business).
A big push is to get into Saucony Apparel/Accessories, but don’t build it. License it.
At 10-15% of Saucony's sales, that's $53-80M of licensed gear. At ~10% royalties, $5-8M a year of near pure margin. No inventory. No apparel team.
And most importantly, not distractions in disciplines they aren’t the best in.
Takeaway: Make shoes. Let experts make everything else.
Final Thought
Whoever told you there are synergies in consumer brand portfolios is lying to you.
No brand gets more successful by owning a portfolio of similar, related brands. Wolverine is one of the best examples.
A 143-year-old footwear company that doesn't even make its own shoes can't make a portfolio of footwear brands work.
Trying to be smart and diversify across categories didn't work. Active over here. Work over there. 2 winners propped up all the dying brands that needed more love and attention.
You can see them dumping the less-related brands already. Sperry. Keds. Licensing Hush Puppies. And they’re not done yet.
Trying to buy their way into apparel didn't work either.
What they're truly the best at is designing footwear, selling it to wholesalers, and marketing it. That's where the focus needs to go.
I've seen this time and time again. Portfolios with a mishmash of brands, built so they can diversify inside 1 company. It's always a disaster.
Meanwhile, focus on the winners and let them grow. Make those brands bigger. Make them better. Extend them.
That's always the best way to grow a consumer brand.
