Wolverine Targeting China Sourcing to be ‘Near Zero’ by 2026 as Company Aims to ‘Mitigate’ Risks From Trump Tariff War
Stephen Garner
Senior Editor
Wolverine Worldwide is not waiting around for President Trump to resolve his ongoing trade war with China.
In the company’s first quarter 2025 earnings call on Thursday, president and chief executive officer of Wolverine Worldwide Chris Hufnagel told analysts that he is “optimistic” amid the ongoing tariff dispute since the company has been working since the pandemic to diversify its sourcing.
Hufnagel noted that six years ago, nearly 40 percent of products sold in the U.S. by the company were sourced from China. This year, the company expects that to be just high single digits, primarily within its Work Group brands like its namesake line Wolverine boots.
“[In 2025], less than 10 percent of our products are now expected to be sourced from China, down from the mid teens just earlier this year,” the CEO said. “We’re targeting to push this down to near zero in 2026.”
But even with this decrease in reliance on China sourcing, Hufnagel noted that the company expects the incremental tariff rates of 145 percent for China, and 10 percent for other sourcing countries, to translate to an estimated $30 million profit impact in 2025, hitting the company’s gross margin profit.
Still, Hufnagel is pushing ahead on his growth plans for the company. “I’m pleased to report our business is strong and growing outside the U.S., up mid-teens year over year in the first quarter, with a good outlook for the balance of the year,” he said. “We have a solid plan to protect profitability, while also working to protect the momentum we generated across a range of model scenarios.”
This plan consists of three components, Hufnagel mentioned. The first is to mitigate the impact of tariffs, which includes a “holistic balance set of actions across the entire value chain.”
“We plan to leverage our diversified supply chain and dual sourcing flexibility to the maximum extent possible to limit our exposure to elevated tariffs on goods sourced from China into the U.S.,” the CEO said. “In addition, we’re in discussion with our supply chain partners on the financial impact of the tariffs and redirecting products into our vast international distribution network where we have demand tailwinds without onerous tariffs.”
The last component is to implement “strategic and surgical price adjustments.”
“Taking price increases is not something we do without significant consideration, but we believe our brands and momentum, positioning in the marketplace, and product innovation pipelines will help limit potential demand headwinds,” Hufnagel said. “To navigate what is still a very fluid situation going forward, we’ve formed a dedicated internal team which is meeting daily, helping surface insights, align planning, and drive action at pace across the global enterprise.”
This plan comes as the company’s Saucony and Merrell brands both posted double-digit growth in the first quarter.
The Rockford, Mich.-based footwear company said total revenue in the first quarter of 2025 was $412.3 million, up 4.4 percent from $394.9 million the same time last year. Ongoing total revenue in Q1 – which excludes the results of the Sperry business, which was sold in January 2024 – was also $412.3 million, an increase of 5.5 percent from $390.8 million the prior year period.
Looking ahead, the company said it expects to see “continued momentum” as it moves into the second quarter. Revenue in Q2 is expected to be approximately $440 million to $450 million, representing growth of approximately 3.7 percent to 6.0 percent compared to the second quarter of 2024.
“We’re obviously anxious to see what happens with the trade war and where that is,” Hufnagel added on Thursday’s call. “At the same time, we’re moving quickly to mitigate the risks that we see today and then certainly work to exploit the opportunities that we believe we have or that we may have in the future. At the same time, trying to run the company really responsibly in the face of this sort of unprecedented event.
