Space Wolves automatically regroup as they fall back, even if the squad is reduced to less than 50% by casualties. If the enemy advance into them the Space Wolves are not destroyed and the advancement of the enemy unit is treated as a new assault (enemy striking: +1A the following turn) in the same way as a sweeping advance. If the enemy do not advance into them the Space Wolves are free to move, shoot and assault normally in their following turn.
'And They Shall Know No Fear'
Source: Codex: Space Wolves, p. 4