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Wolverine has executed a genuine turnaround after a brutal stretch — net income swung from -$188M (FY2022) and -$38.5M (FY2023) to $45.2M (FY2024) and $95.8M (FY2026), with diluted EPS more than doubling to $1.14. The quality of the move is in the margin, not the top line: revenue grew only 6.8% to $1.87B, but gross margin expanded 300bps to 47.3% on product-cost savings, a favorable shift toward full-price sales, and price increases that the MD&A says more than offset higher U.S. tariffs. Operating profit jumped 54% to $150M and ROE is a healthy 23.5%. The growth is concentrated in the right place — Active Group revenue rose 13.0% (Saucony +$126.6M, Merrell +$50.6M) while the weaker Work Group (-7.3%) and divested/declining 'Other' brands shrink, suggesting a cleaner, higher-margin portfolio going forward.

Valuation is the reason this is a buy rather than a hold: at $16.34 the stock trades at 14.3x earnings and just 0.7x sales for a business compounding earnings and expanding margins. That is not a demanding multiple for a brand owner with a 47% gross margin and 23.5% ROE, and a modest re-rating toward 16-17x on the recovered earnings base supports the ~$20 target. The company is also returning cash — $33.3M of dividends ($0.40/share) and $14.5M of buybacks — while retained earnings sit at $917M.