S&P Upgrades Wolverine World Wide to B+ Amid Improved Performance

S&P Global Ratings Upgrade#

S&P Global Ratings has raised Wolverine World Wide Inc.'s rating from B to B+. This upgrade comes with a stable outlook, indicating that S&P expects the company to maintain its financial health over the next year.

Improved Financial Performance#

Wolverine has shown strong results, particularly from its Saucony and Merrell brands, which have helped the company reduce its debt levels. The footwear company has exceeded its own forecasts for revenue, earnings, and profit margins for 2025. Over the past two years, Wolverine's debt has decreased to below 5 times its earnings before interest, taxes, depreciation, and amortization (EBITDA), a measure of profitability. Additionally, the company's EBITDA margins have improved significantly, rising by about 720 basis points compared to 2023.

Future Outlook and Challenges#

S&P anticipates that Wolverine's operating performance in 2026 will be similar to that of 2025. However, the company faces challenges, including increased tariff costs and ongoing marketing investments in its Saucony brand. The agency estimates that Wolverine will incur around $65 million in tariff expenses, which could rise by an additional $50 million in 2025. Changes in U.S. tariff policies may help lower these costs, but any benefits are expected to be felt in the latter half of 2026. Additionally, geopolitical issues, such as the conflict in Iran, could lead to higher shipping costs and reduced consumer spending.

Focus on Organic Growth#

Wolverine ended 2025 with over $200 million in cash and has not engaged in significant share buybacks. The company is prioritizing strengthening its balance sheet by reducing pension liabilities and focusing on organic growth rather than acquisitions. However, its Wolverine work brand has faced challenges, with a 9% revenue decline in 2025, partly due to missing a trend in Western workwear. S&P warns that activist investors might push the company toward more aggressive financial strategies, such as debt-funded acquisitions or increased share repurchases.