Core Viewpoint - Weyco Group, Inc. is set to announce its fourth quarter and full year 2025 financial results on March 3, 2026, with a follow-up conference call on March 4, 2026, to discuss these results in detail [1]. Company Overview - Weyco Group, Inc. designs and markets quality and innovative footwear primarily for men, but also for women and children, under well-recognized brand names such as Florsheim, Nunn Bush, Stacy Adams, and BOGS [4]. - The company's products are available in leading footwear, department, and specialty stores, as well as on e-commerce platforms globally [4]. - Weyco Group operates Florsheim concept stores in the United States, Australia, and various international markets [4].

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Core Insights - Weyco Group, Inc. (WEYS) shares increased by 12.8% following the earnings report for Q3 2025, contrasting with a 1.8% decline in the S&P 500 index during the same period [1] - The company reported earnings per share of 69 cents, down from 84 cents in Q3 2024 [1] Financial Performance - Net sales for Q3 2025 were $73.1 million, a 2% decrease from $74.3 million in the same quarter last year, attributed to tariffs and lower sales volume [2] - Gross earnings as a percentage of net sales fell to 40.7% from 44.3% year-over-year, with operating earnings decreasing by 21% to $8.1 million [2] - Net earnings dropped 18% year-over-year to $6.6 million [2] North American Wholesale Performance - The North American wholesale segment recorded net sales of $60.2 million, a 2% decrease from $61.1 million in the prior year, with a 7% drop in sales volume [3] - Price increases implemented on July 1, 2025, partially offset the volume decline, which was primarily due to disruptions with a key wholesale customer [3] Brand-Level Performance - Florsheim sales increased by 8%, supported by pricing, while Nunn Bush saw a 1% sales increase [4] - Stacy Adams experienced a 5% sales decline, and BOGS sales fell sharply by 17% due to reduced shipments [4] - Wholesale gross margins declined to 35.7% from 40.1% due to tariffs, with operating earnings for the wholesale segment falling 20% to $7.5 million [4] Retail and International Operations - The North American retail segment reported net sales of $7 million, down 4% from $7.2 million, driven by weaker demand on e-commerce sites [5] - Retail gross earnings as a percentage of net sales slipped to 66.4% from 66.9%, with operating income declining to $0.6 million [5] - International operations generated net sales of $6 million, unchanged from the prior year, but local currency sales grew 2% [6] Management Commentary - CEO Thomas Florsheim Jr. highlighted that the sales decline was influenced by the wholesale customer issue and tariffs, particularly a 30% tariff on goods from China [7] - Management noted that price increases were insufficient to fully offset the tariff burden, leading to margin erosion [7] Strategic Initiatives - The company is diversifying its factory base beyond China and strengthening relationships with manufacturing partners to mitigate tariff exposure [8][9] - Management expressed confidence in adapting to the changing trade landscape, with potential signs of tariff relief from U.S.-China trade talks [11] Other Developments - Weyco decided to wind down its Forsake brand due to lack of growth and profitability, aiming to optimize its brand portfolio [12] - The Board of Directors declared a special cash dividend of $2.00 per share and a regular quarterly dividend of 27 cents per share, reflecting a strong liquidity position with $78.5 million in cash and no debt [13]

Sales Performance - Wholesale net sales decreased by 2% in dollars and 7% in volume for Q3 2025 compared to Q3 2024, with a 10% price increase implemented on July 1, 2025[52]. - Consolidated net sales for Q3 2025 were $73.1 million, down 2% from $74.3 million in Q3 2024, while year-to-date net sales totaled $199.4 million, a decrease of 5% from $209.8 million in 2024[61][62]. - The BOGS brand experienced a 17% sales decline in Q3 2025, attributed to an oversaturated outdoor footwear market and mild winters[57]. - Florsheim brand sales increased by 8% in Q3 2025, benefiting from its positioning in the traditional dress and dress-casual footwear market[55]. - Retail segment net sales declined by 4% in Q3 2025, driven by a decrease in e-commerce sales and increased price sensitivity among consumers[59]. - North American Wholesale segment net sales decreased by 2% to $60.151 million for Q3 2025, compared to $61.075 million in Q3 2024[74]. - Retail segment net sales totaled $6.953 million for Q3 2025, a decline of 4% from $7.225 million in Q3 2024[82]. - For the nine months ending September 30, 2025, total net sales decreased by 5% to $199.372 million compared to $209.819 million in the same period of 2024[74]. - Florsheim Australia's net sales remained flat at $6.0 million for Q3 2025, with a year-to-date decline of $0.7 million or 4% compared to the same period in 2024[87]. Earnings and Profitability - Consolidated gross earnings as a percentage of net sales fell to 40.7% in Q3 2025 from 44.3% in Q3 2024, primarily due to higher costs from incremental tariffs[67]. - Net earnings for Q3 2025 were $6.6 million, or $0.69 per diluted share, down 18% from $8.1 million, or $0.84 per diluted share, in Q3 2024[61]. - Consolidated earnings from operations decreased by 21% in Q3 2025, totaling $8.1 million compared to $10.2 million in Q3 2024[61]. - Earnings from operations for the North American Wholesale segment fell by 20% to $7.544 million in Q3 2025, down from $9.406 million in Q3 2024[74]. - Retail operating earnings declined by $1.4 million for the nine months ending September 30, 2025, compared to the same period in 2024[85]. - Gross earnings for the North American Wholesale segment were 35.7% of net sales in Q3 2025, down from 40.1% in Q3 2024[78]. Cash Flow and Liquidity - Cash and marketable securities totaled $78.5 million as of September 30, 2025, with no debt outstanding on the $40.0 million revolving line of credit[63]. - Net cash provided by operating activities totaled $13.2 million for the first nine months of 2025, down from $17.3 million in the same period last year[94]. - Cash dividends paid in the first nine months of 2025 totaled $7.7 million, compared to $9.6 million in the same period of 2024[97]. - Approximately $4.3 million of cash and cash equivalents was held by foreign subsidiaries as of September 30, 2025[103]. - The company believes that available cash, marketable securities, and cash provided by operations will support business cash needs for at least one year[103]. Tax and Financial Agreements - The effective tax rate for Q3 2025 was 26.3%, compared to 25.7% in Q3 2024[71]. - The effective tax rate for the nine months ending September 30, 2025, was 31.8%, compared to 25.8% in 2024, primarily due to a valuation allowance on deferred tax assets[92]. - The Amended Credit Agreement extended the maturity of the credit facility to September 25, 2026, with a maximum available borrowing limit of $40.0 million[100]. - The interest rate margin applicable to amounts outstanding was reduced by 15 basis points, now at SOFR plus 110 basis points[100]. - As of September 30, 2025, there were no outstanding borrowings on the line of credit, and the company was in compliance with all financial covenants[101]. Shareholder Returns - A total of $21.6 million in special cash dividends was prefunded in December 2024 and paid to shareholders in January 2025[102]. - The company continues to evaluate the best uses for available liquidity, including capital expenditures, stock repurchases, and acquisitions[103].

Financial Data and Key Metrics Changes - Overall net sales for Q3 2025 were $73.1 million, down 2% from $74.3 million in Q3 2024 [4] - Consolidated gross earnings were 40.7% of net sales compared to 44.3% in the previous year [4] - Earnings from operations were $8.1 million, down 21% from $10.2 million in Q3 2024 [4] - Net earnings totaled $6.6 million, down 18% from $8.1 million last year [4] - Diluted earnings per share were $0.69, compared to $0.84 in Q3 2024 [5] Business Line Data and Key Metrics Changes - North American wholesale segment net sales were $60.2 million, down 2% from $61.1 million last year [5] - Sales volumes in the wholesale segment were down 7%, but a price increase of 10% helped mitigate the impact [5] - Retail segment net sales were $7 million, down 4% from $7.2 million in 2024, primarily due to softer demand [8] - Florsheim Australia net sales remained flat at $6 million, but were up 2% in local currency [9] Market Data and Key Metrics Changes - The overall inventory as of September 30, 2025, was $67.2 million, down from $74 million at December 31, 2024 [17] - The incremental tariff on goods sourced from China remained at 30% throughout Q3 2025, impacting gross margins [7] Company Strategy and Development Direction - The company is diversifying its factory base to reduce manufacturing concentration in China while maintaining quality [11] - A strategic decision was made to wind down operations of the Forsake brand due to lack of growth and profitability [16] - The company is focused on expanding casual offerings for the Stacy Adams brand to regain growth [14] Management's Comments on Operating Environment and Future Outlook - Management noted that the unsettled tariff environment and weak consumer sentiment continue to create midterm challenges [11] - The company remains confident in the strength of its brands and the resilience of its business model despite current challenges [12] - Future strategies include shifting supply chains and assessing the need for additional price increases based on tariff developments [18] Other Important Information - The Board of Directors declared a quarterly cash dividend of $0.27 per share and a special cash dividend of $2 per share [10] - The company generated $13.2 million in cash from operations during the first nine months of 2025 [9] Q&A Session Summary Question: Margin deterioration attributable to tariffs - Management indicated that the margin erosion is primarily due to tariffs, with a 10% price increase not fully covering the 30% incremental duties from China [24] Question: Consumer behavior across demographics - Management observed that higher-income customers are performing well, while lower middle-income customers are facing challenges [26]

Financial Performance - Third quarter 2025 net sales were $73.1 million, down 2% from $74.3 million in Q3 2024[8] - Gross earnings as a percentage of net sales decreased to 40.7% in Q3 2025 from 44.3% in Q3 2024[8] - Earnings from operations for the quarter totaled $8.1 million, down 21% compared to $10.2 million in Q3 2024[8] - Net earnings were $6.6 million, an 18% decrease from $8.1 million in Q3 2024[8] - Diluted earnings per share decreased to $0.69 from $0.84 in Q3 2024[8] - Net earnings for the nine months ended September 30, 2025, were $14,385,000, a decrease of 29.5% compared to $20,320,000 in 2024[21] Sales Performance - Wholesale net sales in North America were $60.2 million, down 2% from $61.1 million in Q3 2024[3] - Florsheim brand sales increased by 8% for the quarter, while BOGS sales decreased by 17%[4] Dividends and Shareholder Returns - The company declared a special cash dividend of $2.00 per share, alongside a regular quarterly cash dividend of $0.27 per share[12][13] - Cash dividends paid amounted to $7,731,000, down 19.5% from $9,614,000 in the previous year[21] - The company repurchased and retired shares worth $4,065,000, significantly higher than $567,000 in 2024[21] Operational Changes - The company decided to wind down operations of the Forsake brand due to lack of growth and profitability[7] Cash Flow and Financial Position - Net cash provided by operating activities decreased to $13,247,000 from $17,294,000, reflecting a decline of 23.6%[21] - The cash and cash equivalents at the end of the period were $72,915,000, compared to $75,455,000 at the end of the same period in 2024[21] - The effect of exchange rate changes on cash and cash equivalents resulted in an increase of $865,000, contrasting with a decrease of $281,000 in 2024[21] Accounts and Inventory Management - Accounts receivable increased by $9,113,000, compared to an increase of $7,534,000 in the previous year[21] - Inventories rose to $6,803,000, significantly higher than $2,728,000 in 2024[21] - The company reported a bad debt expense of $167,000, a notable increase from $19,000 in the previous year[21] Cost and Tariff Impact - Incremental tariffs on goods sourced from China remained at 30%, contributing to margin compression[6] Interest Expense - Interest paid was minimal at $1,000, down from $15,000 in 2024[21]

Core Insights - Weyco Group, Inc. reported financial results for the third quarter of 2025, showing a decline in both wholesale and retail segments, primarily due to reduced sales volumes and increased costs from tariffs [1][2][12]. North American Wholesale Segment - Wholesale net sales were $60.2 million, down 2% from $61.1 million in Q3 2024, with sales volumes decreasing by 7% [3]. - Florsheim brand saw an 8% sales increase, while BOGS and Stacy Adams experienced declines of 17% and 5%, respectively [4]. - Wholesale gross earnings as a percentage of net sales decreased to 35.7% from 40.1% year-over-year, impacted by incremental tariffs [5]. - Operating earnings fell by 20% to $7.5 million due to lower sales volumes and margin erosion [5]. Incremental Tariffs - The U.S. government maintained a 30% tariff on goods sourced from China, with ongoing trade talks potentially affecting future tariff rates [6]. - The tariff environment remains unpredictable, creating uncertainty regarding its impact on gross margins [6]. North American Retail Segment - Retail segment net sales totaled $73.1 million, down 2% from $74.3 million in Q3 2024, with gross earnings at 40.7% of net sales [8][10]. - Net earnings decreased by 18% to $6.6 million, with diluted earnings per share dropping to $0.69 from $0.84 [8][22]. Other Operations - Florsheim Australia reported flat net sales of $6.0 million, with gross earnings as a percentage of net sales increasing to 61.0% [11]. Strategic Decisions - The company decided to wind down operations of the Forsake brand due to lack of growth and profitability, with no material impact expected on consolidated financial statements [7]. Dividend Declarations - The Board of Directors declared a regular quarterly cash dividend of $0.27 per share and a special cash dividend of $2.00 per share, reflecting a return of capital to shareholders [13][14].

Core Viewpoint - WEYCO Group, Inc. is set to announce its third quarter 2025 financial results on November 4, 2025, followed by a conference call on November 5, 2025, to discuss the results in detail [1]. Company Overview - WEYCO Group, Inc. designs and markets quality and innovative footwear primarily for men, but also for women and children, under well-recognized brand names such as Florsheim, Nunn Bush, Stacy Adams, and BOGS [4]. - The company's products are available in leading footwear, department, and specialty stores, as well as on e-commerce platforms globally [4]. - WEYCO Group operates Florsheim concept stores in the United States, Australia, and various international markets [4].

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Core Viewpoint - Weyco Group, Inc. has faced significant challenges in its recent earnings report, with declines in both sales and earnings attributed to economic uncertainty and increased tariffs [1][5]. Financial Performance - The company reported a second-quarter 2025 EPS of 24 cents, down from 59 cents in the prior-year quarter [1]. - Net sales decreased by 9% to $58.2 million from $63.9 million year-over-year [2]. - Net earnings fell 60% to $2.3 million compared to $5.6 million in the same quarter last year [2]. - Gross earnings as a percentage of net sales declined to 43.3% from 43.9% [2]. Segment Performance - In the North American Wholesale segment, sales dropped 9% to $45.6 million, with major brands like Nunn Bush, Stacy Adams, Florsheim, and BOGS experiencing declines of 11%, 10%, 5%, and 14% respectively [3]. - Retail sales fell 11% to $6.8 million, driven by weaker demand on Florsheim and Stacy Adams websites [3]. - The "Other" category, which includes operations in Australia and South Africa, saw a 4% sales decline to $5.8 million, resulting in an operating loss of $0.2 million [3]. Management Commentary - The CEO described the quarter as facing "headwinds" from tariffs and reduced consumer spending, with expectations of continued economic uncertainty [4]. - Management highlighted the company's strong financial position, which they believe will support long-term growth despite current challenges [4]. - Efforts to diversify sourcing away from China to countries like Vietnam, Cambodia, and India were emphasized [4]. Influencing Factors - The earnings decline was primarily due to reduced consumer spending and higher import costs from tariffs, with the China-specific tariff peaking at 145% in April 2025 [5]. - Weyco has taken measures to mitigate cost pressures, including pre-purchasing inventory and negotiating supplier cost reductions [5]. Guidance - Management anticipates ongoing top-line pressure in the coming months due to tariffs and weak consumer sentiment, with potential seasonal softness in casual and dress footwear [6]. Other Developments - On August 5, 2025, the board declared a quarterly cash dividend of 27 cents per share, payable on September 30, 2025 [7]. - The company allocated $3.1 million for share repurchases and approximately $0.7 million for capital expenditures in the first half of 2025 [7].