Wolverine Worldwide has a new top dog — and analysts are feeling overall positive about the leadership change.
After announcing the sudden firing of its CEO Brendan Hoffman on Thursday, Wolverine named Christopher Hufnagel, formerly president of the company, as president and CEO. Hufnagel joined Wolverine in 2008 and served in several leadership roles before being named president in May 2023.
In the wake of the move, which occurred in tandem with a weak earnings report for the second quarter and a downgraded full-year outlook, analysts appeared overall positive about Hufnagel’s ability to help ignite growth for the company, which owns the Saucony, Merrell, Sperry and Sweaty Betty brands, among others.
“As a 15-year Wolverine Worldwide veteran with experience spanning multiple functional and brand leadership roles, we view Hufnagel’s appointment as a logical move for the company,” wrote Baird analyst Jonathan Komp in a Thursday note to investors. He added in another note that Hufnagel will need to “re-establish credibility in financial projections and brand health” to reinvigorate the stock.
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Last year, Wolverine initiated a broad turnaround effort meant to focus its attention on brands with the most potential and improve profitability. As part of this strategy, the company announced a possible sale of its Sperry brand after it divested its Keds business late last year and is now consolidating its U.S. offices to streamline the organization.
In his first call with analysts as CEO, Hufnagel outlined his goal to make Wolverine “a great builder of brands” by making great products, telling interesting stories and having strong teams.
Wolverine Worldwide board chairman Tom Long said Hufnagel’s “demonstrated playbook” for improving brands is what made him the clear choice to lead the organization and highlighted his experience heading up the company’s first consumer insights market intelligence team and leading the Merrell brand as president between 2021 and 2022, during which he achieved record revenues and more than doubled e-commerce business.
Stifel analyst Jim Duffy congratulated Hufnagel during the call and said he believes the new CEO has “a good skill set and temperament for the role,” though noted there will be challenges as he works to right the ship.
Similarly, Williams Trading analyst Sam Poser applauded Hufnagel’s big goals for the company in a Thursday note, but cautioned him against going too hard, too fast.
“We believe it’s essential that ‘less is more’ be the guiding principle for Mr. Hufnagel, and firmly place brand sanctity ahead of revenue growth,” he wrote. “Too aggressive a plan will lead to too wild a rollercoaster ride, we fear. Balancing profitable growth and brand sanctity must, in our view, err on the side of brand sanctity for the foreseeable future.”
On the retail side, some industry players seemed positive about the leadership shakeup as well.
“Honestly, I find it good for us, especially at the big corporate level,” said The Athlete’s Foot’s president and GM of the Americas Matt Lafone, adding that he’s never personally worked with Hufnagel and is just starting to test out Wolverine Worldwide’s Saucony brand for 2024. “They’ve been kind of rebuilding the brand, pulling back distribution. So that’s fairly new. I think they have a fairly good plan.”
According to Jeff Harris, the owner of Run With It Sports specialty store in Florida, Saucony has become increasingly less important and competitive in his store, though he is hopeful that new leadership could change that.
“Where we used to have orders coming in every six weeks, we now future out orders every 12 weeks and still have to revise the orders down to almost nothing,” he said. “I am thrilled that they have new (or old) leadership in place. Hopefully he can turn their ship around.”
