Weyco Reports Second Quarter Sales and Earnings
MILWAUKEE, Aug. 05, 2025 (GLOBE NEWSWIRE) -- Weyco Group, Inc. (NASDAQ: WEYS) (“we,” “our,” “us” and the “Company”) today announced financial results for the quarter ended June 30, 2025.
Second Quarter 2025 Overview
- Net sales: $58.2 million (down 9% from $63.9 million in Q2 2024)
- Gross earnings: 43.3% of net sales (compared to 43.9% of net sales in Q2 2024)
- Earnings from operations: $3.9 million (down 42% compared to $6.7 million in Q2 2024)
- Provision for income taxes: $2.4 million (includes a $1.1 million adjustment)
- Net earnings: $2.3 million (down 60% from $5.6 million in Q2 2024)
- Diluted earnings per share: $0.24 (down from $0.59 in Q2 2024)
North American Wholesale Segment
Wholesale net sales were $45.6 million for the quarter, down 9% from $50.3 million in the second quarter of 2024. Sales of the Nunn Bush, Stacy Adams, Florsheim and BOGS brands were down 11%, 10%, 5%, and 14%, respectively, for the quarter, with sales down across most major categories. A slowdown in consumer spending amid economic uncertainty has prompted retailers to take a more cautious approach with buying and managing their inventories.
Wholesale gross earnings as a percent of net sales were 37.6% and 38.2% in the second quarters of 2025 and 2024, respectively. Gross margins were negatively impacted by the effects of incremental tariffs, discussed below. Wholesale selling and administrative expenses totaled $13.1 million for the quarter and $13.4 million last year. As a percent of net sales, wholesale selling and administrative expenses were 29% and 27% in the second quarters of 2025 and 2024, respectively. The increase in expenses as a percentage of net sales was because many of our operating costs are fixed and do not vary with sales. Wholesale operating earnings totaled $4.1 million for the quarter, down 30% from $5.8 million in 2024, due mainly to lower sales and gross margins.
Incremental Tariffs
In early 2025, the U.S. government enacted reciprocal and retaliatory tariffs (“incremental tariffs”) on goods imported into the United States. The incremental tariff on goods sourced from China, which is where we source most of our products, reached a high of 145% in April, but was temporarily reduced to 30% on May 12, 2025, for a 90-day period ending August 12, 2025. It has not yet been announced if the China tariff will change at that time. The incremental tariffs on goods we source from other countries, excluding China, were 10% throughout the second quarter of 2025. Effective August 7, 2025, the tariffs of three of those countries will increase to 19 - 25%.
We have taken various measures to minimize the impact of the incremental tariffs on our gross margins. These measures included proactively bringing in a large amount of inventory ahead of the tariff effective dates, enabling us to temporarily halt our China imports while the incremental tariff rate was 145%. We negotiated factory cost reductions with several of our Chinese suppliers. We moved sourcing of certain footwear styles out of China and are continuing our efforts to diversify sourcing. Finally, as mentioned in the first quarter, we raised U.S. selling prices effective July 1, 2025.
U.S. trade and tariff policies currently remain fluid and unpredictable, and the specific tariff rates applicable to goods imported by our Company continue to evolve. Therefore, despite our mitigation efforts, uncertainty still exists regarding the potential near-term impact of incremental tariffs on our gross margins. We remain committed to adapting to changes in tariff policies and will adopt further mitigation strategies, as needed.
North American Retail Segment
Net sales in our retail segment, which were generated mainly by our e-commerce websites, were $6.8 million, down 11% from $7.6 million in 2024. The decrease was primarily due to lower sales on the Florsheim and Stacy Adams websites, a result of lower consumer demand for footwear.
Retail gross earnings as a percent of net sales were 66.6% and 67.5% in the second quarters of 2025 and 2024, respectively. Retail operating earnings totaled $0.1 million for the quarter and $0.7 million in last year’s second quarter. The decrease was mainly due to lower sales and gross margins.
Other Operations
Our other operations historically included our retail and wholesale businesses in Australia, South Africa, and Asia Pacific (collectively, “Florsheim Australia”). We ceased operations in the Asia Pacific region in 2023 and completed the wind down of that business in 2024. Accordingly, second quarter 2025 results of the “other” category only reflect the operations of Australia and South Africa.
Net sales of Florsheim Australia were $5.8 million, down 4% from $6.1 million in the second quarter of 2024. The weaker Australian dollar relative to the U.S. dollar contributed to the decrease, as Florsheim Australia’s net sales in local currency were down 2% for the quarter, driven by lower wholesale shipments.
Florsheim Australia’s gross earnings as a percent of net sales were 60.9% and 62.0% in the second quarters of 2025 and 2024, respectively. Florsheim Australia generated operating losses totaling $0.2 million for the quarter versus operating earnings of $0.2 million last year.
Provision for Income Taxes
Our effective tax rates for the second quarters of 2025 and 2024 were 51.1% and 25.1%, respectively. The increase this quarter was due to the establishment of a $1.1 million valuation allowance on deferred tax assets at Florsheim Australia, as it was determined more likely than not that these assets will not be realized.
“The tariff-environment created headwinds for our business in second quarter,” stated Thomas W. Florsheim, Chairman and CEO. “Consumers pulled back on discretionary spending which adversely impacted sales, and higher tariff-import costs set in, eroding our margins and reducing our profitability for the period. In the months ahead, we expect continued top-line pressure amid heightened economic uncertainty and reduced consumer sentiment. Our strong financial position provides us with stability and flexibility to navigate near-term uncertainties with confidence, allowing us to focus on our long-term goal of delivering profitable and sustainable growth to our shareholders.”
Dividend Declaration
On August 5, 2025, our Board of Directors declared a regular quarterly cash dividend of $0.27 per share to all shareholders of record on August 18, 2025, payable September 30, 2025.
Conference Call Details
Weyco Group will host a conference call on August 6, 2025, at 11:00 a.m. Eastern Time to discuss the second quarter 2025 financial results in more detail. To participate in the call, you will first need to pre-register online. Pre-registration takes only a few minutes, and you may pre-register at any time, including up to and after the call start time. To pre-register, please go to: https://register-conf.media-server.com/register/BIf23c2f1c16ad4f4a9f9138c2a0f565f2.
The pre-registration process will provide the conference call phone number and a passcode required to enter the call. A replay will be available for one year beginning about two hours after the completion of the call at the following webcast link: https://edge.media-server.com/mmc/p/bujv3dot. Alternatively, the replay will be available by visiting the investor relations section of Weyco Group’s website at www.weycogroup.com.
About Weyco Group
Weyco Group, Inc., designs and markets quality and innovative footwear principally for men, but also for women and children, under a portfolio of well-recognized brand names including: Florsheim, Nunn Bush, Stacy Adams, BOGS, and Forsake. The Company’s products can be found in leading footwear, department, and specialty stores, as well as on e-commerce websites worldwide. Weyco Group also operates Florsheim stores in the United States, Australia, and South Africa.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Various factors could cause our results to be materially different from the results expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the uncertain impacts of U.S. trade and tariff policies – particularly incremental tariffs on goods sourced from China - which remain highly dynamic and unpredictable; the impact of inflation generally and, specifically, increases in our costs for materials, labor and other manufacturing inputs; a slow down or contraction in the overall U.S. or Australian economies; our ability to successfully market and sell our products in a highly competitive industry and in view of changing and unpredictable consumer trends; the effect of unseasonable weather conditions on the demand for certain of our products; our ability to successfully procure our products from independent manufacturers on a timely basis; consumer acceptance of products and other factors affecting retail market conditions, changes in interest rates, the uncertain impact of the wars in Ukraine and Israel and the related economic and other sanctions imposed by the U.S. and European Union; and other factors detailed from time to time in our filings made with the Securities and Exchange Commission, including our annual report on Form 10-K filed on March 14, 2025, which are incorporated herein by reference. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.
For more information, contact:
Judy Anderson
Vice President, Chief Financial Officer and Secretary
414-908-1833
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WEYCO GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (Dollars in thousands) | ||||||||
| ASSETS: | ||||||||
| Cash and cash equivalents | $ | 77,430 | $ | 70,963 | ||||
| Marketable securities, at amortized cost | 1,109 | 852 | ||||||
| Accounts receivable, net | 32,022 | 37,464 | ||||||
| Income tax receivable | 1,792 | 1,086 | ||||||
| Inventories | 71,258 | 74,012 | ||||||
| Prefunded dividend | — | 21,579 | ||||||
| Prepaid expenses and other current assets | 2,408 | 3,435 | ||||||
| Total current assets | 186,019 | 209,391 | ||||||
| Marketable securities, at amortized cost | 5,281 | 5,529 | ||||||
| Deferred income tax benefits | — | 1,037 | ||||||
| Property, plant and equipment, net | 27,781 | 28,180 | ||||||
| Operating lease right-of-use assets | 12,104 | 10,504 | ||||||
| Goodwill | 12,317 | 12,317 | ||||||
| Trademarks | 32,868 | 32,868 | ||||||
| Other assets | 24,566 | 24,260 | ||||||
| Total assets | $ | 300,936 | $ | 324,086 | ||||
| LIABILITIES AND EQUITY: | ||||||||
| Accounts payable | $ | 7,058 | $ | 8,378 | ||||
| Dividend payable | — | 21,579 | ||||||
| Operating lease liabilities | 4,751 | 4,033 | ||||||
| Accrued liabilities | 9,077 | 13,273 | ||||||
| Total current liabilities | 20,886 | 47,263 | ||||||
| Deferred income tax liabilities | 13,727 | 13,922 | ||||||
| Long-term pension liability | 9,845 | 9,888 | ||||||
| Operating lease liabilities | 7,936 | 7,034 | ||||||
| Other long-term liabilities | 480 | 394 | ||||||
| Total liabilities | 52,874 | 78,501 | ||||||
| Common stock | 9,539 | 9,643 | ||||||
| Capital in excess of par value | 73,378 | 72,577 | ||||||
| Reinvested earnings | 180,981 | 181,299 | ||||||
| Accumulated other comprehensive loss | (15,836 | ) | (17,934 | ) | ||||
| Total equity | 248,062 | 245,585 | ||||||
| Total liabilities and equity | $ | 300,936 | $ | 324,086 | ||||
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WEYCO GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||
| Net sales | $ | 58,221 | $ | 63,932 | $ | 126,251 | $ | 135,490 | ||||||||
| Cost of sales | 32,998 | 35,840 | 70,653 | 75,391 | ||||||||||||
| Gross earnings | 25,223 | 28,092 | 55,598 | 60,099 | ||||||||||||
| Selling and administrative expenses | 21,330 | 21,431 | 44,674 | 45,187 | ||||||||||||
| Earnings from operations | 3,893 | 6,661 | 10,924 | 14,912 | ||||||||||||
| Interest income | 785 | 964 | 1,419 | 1,869 | ||||||||||||
| Interest expense | (1 | ) | — | (2 | ) | — | ||||||||||
| Other expense, net | (59 | ) | (143 | ) | (186 | ) | (238 | ) | ||||||||
| Earnings before provision for income taxes | 4,618 | 7,482 | 12,155 | 16,543 | ||||||||||||
| Provision for income taxes | 2,362 | 1,875 | 4,356 | 4,286 | ||||||||||||
| Net earnings | $ | 2,256 | $ | 5,607 | $ | 7,799 | $ | 12,257 | ||||||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic | 9,475 | 9,429 | 9,511 | 9,433 | ||||||||||||
| Diluted | 9,561 | 9,548 | 9,612 | 9,564 | ||||||||||||
| Earnings per share | ||||||||||||||||
| Basic | $ | 0.24 | $ | 0.60 | $ | 0.82 | $ | 1.30 | ||||||||
| Diluted | $ | 0.24 | $ | 0.59 | $ | 0.81 | $ | 1.28 | ||||||||
| Cash dividends declared (per share) | $ | 0.27 | $ | 0.26 | $ | 0.53 | $ | 0.51 | ||||||||
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WEYCO GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||
| Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| (Dollars in thousands) | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net earnings | $ | 7,799 | $ | 12,257 | ||||
| Adjustments to reconcile net earnings to net cash provided by operating activities - | ||||||||
| Depreciation | 1,203 | 1,204 | ||||||
| Amortization | 131 | 133 | ||||||
| Bad debt expense | 148 | (2 | ) | |||||
| Deferred income taxes | 838 | (11 | ) | |||||
| Net foreign currency transaction losses | 66 | 28 | ||||||
| Share-based compensation expense | 802 | 698 | ||||||
| Pension expense | 240 | 441 | ||||||
| Loss on disposal of fixed assets | 5 | 20 | ||||||
| Increase in cash surrender value of life insurance | (230 | ) | (210 | ) | ||||
| Changes in operating assets and liabilities - | ||||||||
| Accounts receivable | 5,301 | 1,948 | ||||||
| Inventories | 2,705 | 6,941 | ||||||
| Prepaid expenses and other assets | 791 | 2,800 | ||||||
| Accounts payable | (1,277 | ) | (4,264 | ) | ||||
| Accrued liabilities and other | (3,458 | ) | (4,225 | ) | ||||
| Accrued income taxes | (707 | ) | (90 | ) | ||||
| Net cash provided by operating activities | 14,357 | 17,668 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Proceeds from maturities of marketable securities | 5 | 215 | ||||||
| Purchases of property, plant and equipment | (677 | ) | (344 | ) | ||||
| Net cash used for investing activities | (672 | ) | (129 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Cash dividends paid | (5,039 | ) | (7,162 | ) | ||||
| Shares purchased and retired | (3,135 | ) | (514 | ) | ||||
| Net cash used for financing activities | (8,174 | ) | (7,676 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | 956 | (768 | ) | |||||
| Net increase in cash and cash equivalents | $ | 6,467 | $ | 9,095 | ||||
| CASH AND CASH EQUIVALENTS at beginning of period | 70,963 | 69,312 | ||||||
| CASH AND CASH EQUIVALENTS at end of period | $ | 77,430 | $ | 78,407 | ||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Income taxes paid, net of refunds | $ | 4,208 | $ | 4,337 | ||||
| Interest paid | $ | 1 | $ | — | ||||
| NON-CASH FINANCING ACTIVITY: | ||||||||
| Settlement of dividend payable with prefunded dividend | $ | 21,579 | $ | — | ||||
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