Two prominent outdoor companies delivered contrasting second-quarter performances, with Wolverine Worldwide, owner of Merrell, Saucony, and other brands, exceeding expectations while Yeti navigated a challenging consumer environment and market softness in a key category.
Wolverine posted its strongest revenue growth in years at 11.5%, driven by robust performance across key brands, while Yeti saw a 4% decline in sales amid promotional market pressures and supply chain transitions. Both companies face uncertainty heading into the latter half of 2025, with Wolverine declining to provide full-year guidance due to tariff concerns and YETI moderating its sales outlook while raising earnings expectations.
Wolverine Worldwide Delivers Strong Q2 Performance
Wolverine Worldwide reported second-quarter revenue of $474.2 million, an 11.5% increase compared to the same period last year. The footwear company’s performance exceeded expectations, delivering what CEO Chris Hufnagel called “the strongest revenue growth we’ve seen in several years.”
The company’s Active Group, which includes outdoor and athletic brands, led the charge with revenue of $355.5 million, up 16.2% year-over-year. Within this segment, Merrell brand revenue grew 10.7% to $157.9 million compared to the prior-year quarter, the brand’s fourth consecutive quarter of growth. Merrell is focused on “modernizing the trail,” Hufnagel said.
Merrell reported strong wholesale sell-through which led to replenishment orders during the quarter, executives said on an earnings conference call.
Saucony delivered particularly strong results with revenue jumping 41.5% to $144.3 million. The growth came from increased demand in both running and lifestyle channels, expanded distribution, and timing shifts in orders.
The Work Group segment, encompassing industrial and work footwear, posted modest growth of 2.4% to $107.5 million.
Profitability metrics showed substantial improvement across the board. Gross margin expanded to 47.2% from 43.1% in the prior year, an increase of 410 basis points. The company attributed this improvement to “a healthier sales mix, lower promotional activity, and the benefit of supply chain cost initiatives, with minimal incremental impact from U.S. tariffs.”
Net income per diluted share nearly doubled to $0.32 from $0.17 in the second quarter of 2024, reflecting the company’s focus on operational efficiency and margin expansion.
“We’re executing our new brand-building model at pace, and we’ve made meaningful strides in improving the profitability of the business, along with strengthening the balance sheet,” Hufnagel said in the earnings release.
International sales provided another bright spot with revenue of $250 million, up 15.7%.
Net debt declined 14.8% in the quarter to $568 million.
Yeti Faces Headwinds Despite Strategic Progress
Yeti reported second-quarter net sales of $445.9 million, a 4% decrease from the prior-year period. The Austin-based company faced challenges from what the company described as a more promotional drinkware market environment, caution from consumers and retail partners, and inventory constraints driven by Yeti’s supply chain transition.
In an earnings call with investors, executives noted several interesting trends in consumer spending, including:
- Yeti’s lower-priced coolers selling better than more expensive models in the quarter, which the company attributed in part to consumers trading down.
- While site traffic was up on Yeti.com, conversion rates came in below expectations, which the company attributed to “less intentional shopping behavior.”
- Wholesale partners ordering cautiously and managing inventory levels more tightly.
The company’s two primary product categories both recorded revenue decreases. Drinkware sales fell 4% to $236.4 million, with growth in international markets being offset by declines in the U.S. region. Coolers & equipment sales dropped 3% to $200.6 million, though growth in hard coolers partially offset declines in soft coolers.
By channel, wholesale sales fell 7% to $197.3 million. Direct-to-consumer declined 1% to $248.6 million.
Geographically, U.S. sales decreased 5% to $367.8 million while international sales increased 2% to $78.1 million. The international increase reflected strong growth in Europe and Yeti’s launch in Japan, which was partially offset by conservative inventory management from wholesale partners in other regions.
Despite the sales decline, Yeti maintained strong profitability metrics. Gross margin expanded 80 basis points to 57.8% from 57% in the prior-year quarter, primarily due to lower product costs and selective price increases, though these gains were partially offset by higher tariff costs.
Net income per diluted share increased 3% to $0.61 compared to the prior-year quarter, while adjusted earnings per share decreased 6% to $0.66.
“We are making excellent progress on our long-term strategic priorities – accelerating innovation, expanding our global brand, and diversifying our supply chain,” CEO Matt Reintjes said in a statement. He noted encouraging momentum in product diversification, particularly strength in the bags category, and strong international performance in the UK and Europe.
Yeti has been working to diversify its supply chain, and by the end of 2025, less than 5% of Yeti’s total cost of goods sold will be exposed to U.S. tariffs on products sourced from China.
The company continued its capital allocation strategy, repurchasing 0.7 million shares for $23 million during the quarter and targeting approximately $200 million in total share repurchases for 2025.
Outlook Reflects Cautious Optimism Amid Uncertainties
Both companies provided measured outlooks for the remainder of 2025 due to the ongoing macroeconomic uncertainties and trade-related challenges.
Wolverine Worldwide projected third-quarter revenue of approximately $450 million to $460 million, representing growth of 2.1% to 4.4% compared to the third quarter 2024 ongoing business revenue. The company expects gross margin to reach approximately 47%, up 170 basis points year-over-year, while operating margin is projected at approximately 7.3%.
Wolverine declined to provide full-year 2025 guidance, citing “uncertainty around tariffs and related macro-economic conditions.”
Yeti moderated its full-year sales expectations while raising earnings projections. The company now expects adjusted sales to be flat to up 2%, down from previous guidance of 1% to 4% growth, reflecting “a slightly more prolonged recovery in drinkware in the U.S.”
However, Yeti raised its adjusted earnings per share outlook to between $2.34 and $2.48, up from previous guidance of $1.96 to $2.02, primarily due to strong operational execution and tariff adjustments, namely the tariffs on Chinese goods falling to 30% from 145%.
“Our confidence in the business and the underlying operating fundamentals supporting our full-year outlook remains unchanged,” Reintjes stated, emphasizing continued investment in supply chain diversification and global expansion initiatives.
