Group 1 - The investment strategy focuses on long-only investment, evaluating companies from an operational and buy-and-hold perspective [1] - The approach does not prioritize market-driven dynamics or future price action, instead emphasizing long-term earnings power and competitive dynamics [1] - Most recommendations will be holds, indicating a cautious approach to market conditions, with only a small fraction of companies deemed suitable for purchase at any given time [1] Group 2 - The articles aim to provide valuable information for future investors and introduce skepticism in a generally bullish market [1] - There is a clear distinction made between the author's opinions and professional investment advice, emphasizing the need for readers to conduct their own due diligence [2][3]

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].

[PART I. FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%2E%20FINANCIAL%20INFORMATION) Overview of the company's financial statements, management's analysis, market risks, and internal controls [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements%2E) Presents unaudited condensed consolidated financial statements and accompanying notes for the specified periods [Condensed Consolidated Balance Sheets (Unaudited)](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS%20%28UNAUDITED%29) Provides a snapshot of the company's financial position, including assets, liabilities, and equity Condensed Consolidated Balance Sheets (Unaudited) | Metric | June 30, 2025 (thousands) | December 31, 2024 (thousands) | | :-------------------------------- | :-------------------------- | :---------------------------- | | **ASSETS:** | | | | Cash and cash equivalents | $77,430 | $70,963 | | Marketable securities, at amortized cost (current) | $1,109 | $852 | | Accounts receivable, net | $32,022 | $37,464 | | Inventories | $71,258 | $74,012 | | Total current assets | $186,019 | $209,391 | | Total assets | $300,936 | $324,086 | | **LIABILITIES AND EQUITY:** | | | | Accounts payable | $7,058 | $8,378 | | Dividend payable | — | $21,579 | | Total current liabilities | $20,886 | $47,263 | | Total liabilities | $52,874 | $78,501 | | Total equity | $248,062 | $245,585 | | Total liabilities and equity | $300,936 | $324,086 | [Condensed Consolidated Statements of Earnings (Unaudited)](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20EARNINGS%20%28UNAUDITED%29) Details the company's revenues, expenses, and net earnings over specific reporting periods Condensed Consolidated Statements of Earnings (Unaudited) | Metric | Three Months Ended June 30, 2025 (thousands) | Three Months Ended June 30, 2024 (thousands) | Six Months Ended June 30, 2025 (thousands) | Six Months Ended June 30, 2024 (thousands) | | :--------------------------------- | :----------------------------------------- | :----------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net sales | $58,221 | $63,932 | $126,251 | $135,490 | | Gross earnings | $25,223 | $28,092 | $55,598 | $60,099 | | Earnings from operations | $3,893 | $6,661 | $10,924 | $14,912 | | Net earnings | $2,256 | $5,607 | $7,799 | $12,257 | | Basic Earnings per share | $0.24 | $0.60 | $0.82 | $1.30 | | Diluted Earnings per share | $0.24 | $0.59 | $0.81 | $1.28 | | Cash dividends declared (per share) | $0.27 | $0.26 | $0.53 | $0.51 | [Condensed Consolidated Statements of Comprehensive Income (Unaudited)](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME%20%28UNAUDITED%29) Presents net earnings and other comprehensive income components, reflecting total non-owner changes in equity Condensed Consolidated Statements of Comprehensive Income (Unaudited) | Metric | Three Months Ended June 30, 2025 (thousands) | Three Months Ended June 30, 2024 (thousands) | Six Months Ended June 30, 2025 (thousands) | Six Months Ended June 30, 2024 (thousands) | | :-------------------------------- | :----------------------------------------- | :----------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net earnings | $2,256 | $5,607 | $7,799 | $12,257 | | Other comprehensive income (loss) | $1,865 | $134 | $2,098 | $(885) | | Comprehensive income | $4,121 | $5,741 | $9,897 | $11,372 | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS%20%28UNAUDITED%29) Summarizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (Unaudited) | Metric | Six Months Ended June 30, 2025 (thousands) | Six Months Ended June 30, 2024 (thousands) | | :------------------------------------ | :--------------------------------------- | :--------------------------------------- | | Net cash provided by operating activities | $14,357 | $17,668 | | Net cash used for investing activities | $(672) | $(129) | | Net cash used for financing activities | $(8,174) | $(7,676) | | Net increase in cash and cash equivalents | $6,467 | $9,095 | | Cash and cash equivalents at end of period | $77,430 | $78,407 | | Income taxes paid, net of refunds | $4,208 | $4,337 | | Interest paid | $1 | $— | | Settlement of dividend payable with prefunded dividend (non-cash) | $21,579 | $— | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=7&type=section&id=NOTES:) Provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1. Financial Statements](index=7&type=section&id=1.%20Financial%20Statements) Explains the basis of presentation and significant accounting policies for the financial statements - Management believes the unaudited condensed consolidated financial statements contain all necessary adjustments for fair presentation, which are of a normal recurring nature, but results for the three and six months ended June 30, 2025, may not be indicative of the full year[13](index=13&type=chunk) - The preparation of financial statements requires management to make estimates and assumptions, and actual results could differ from those estimates[14](index=14&type=chunk) [Note 2. New Accounting Pronouncements](index=7&type=section&id=2.%20New%20Accounting%20Pronouncements) Discusses recently issued accounting standards and their potential impact on the company's financial reporting - FASB issued ASU 2023-09 (Income Taxes) effective for fiscal years beginning after December 15, 2024, requiring additional income tax rate reconciliation and disaggregation of income taxes paid, with the company evaluating its potential impact[15](index=15&type=chunk) - FASB issued ASU No. 2024-03 (Income Statement – Expense Disaggregation) effective for fiscal years beginning after December 15, 2026, requiring disaggregated income statement expense information, with the company evaluating its potential impact[16](index=16&type=chunk) [Note 3. Earnings Per Share](index=7&type=section&id=3.%20Earnings%20Per%20Share) Provides details on the calculation of basic and diluted earnings per share, including share counts Earnings Per Share (Three and Six Months Ended June 30) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Net earnings (thousands) | $2,256 | $5,607 | $7,799 | $12,257 | | Basic EPS | $0.24 | $0.60 | $0.82 | $1.30 | | Diluted EPS | $0.24 | $0.59 | $0.81 | $1.28 | | Basic weighted average shares outstanding (thousands) | 9,475 | 9,429 | 9,511 | 9,433 | | Diluted weighted average shares outstanding (thousands) | 9,561 | 9,548 | 9,612 | 9,564 | - Anti-dilutive stock options were excluded from diluted weighted average shares outstanding: **168,000 shares for Q2 2025** (avg. exercise price **$31.92**), **115,000 shares for YTD 2025** (avg. exercise price **$34.56**), **393,000 shares for Q2 2024** (avg. exercise price **$30.15**), and **394,000 shares for YTD 2024** (avg. exercise price **$30.15**)[17](index=17&type=chunk) [Note 4. Investments](index=9&type=section&id=4.%20Investments) Details the company's marketable securities, their classification, amortized cost, and market values - All marketable securities are classified as held-to-maturity debt securities and reported at amortized cost[18](index=18&type=chunk) Marketable Securities (Amortized Cost and Market Value) | Category | June 30, 2025 Amortized Cost (thousands) | June 30, 2025 Market Value (thousands) | Dec 31, 2024 Amortized Cost (thousands) | Dec 31, 2024 Market Value (thousands) | | :--------------- | :--------------------------------------- | :------------------------------------- | :-------------------------------------- | :------------------------------------ | | Current | $1,109 | $1,105 | $852 | $848 | | Due from one through five years | $3,043 | $3,044 | $2,692 | $2,677 | | Due from six through ten years | $2,238 | $2,155 | $2,837 | $2,749 | | Total | $6,390 | $6,304 | $6,381 | $6,274 | Unrealized Gains and Losses on Marketable Securities | Metric | June 30, 2025 Unrealized Gains (thousands) | June 30, 2025 Unrealized Losses (thousands) | Dec 31, 2024 Unrealized Gains (thousands) | Dec 31, 2024 Unrealized Losses (thousands) | | :------------------ | :--------------------------------------- | :--------------------------------------- | :-------------------------------------- | :--------------------------------------- | | Marketable securities | $9 | $(95) | $5 | $(112) | [Note 5. Intangible Assets](index=9&type=section&id=5.%20Intangible%20Assets) Outlines the company's indefinite-lived and amortizable intangible assets, including their carrying amounts and amortization - Indefinite-lived intangible assets (goodwill and trademarks) are primarily in the North American Wholesale segment, with no changes in carrying value during the six months ended June 30, 2025[20](index=20&type=chunk) Amortizable Intangible Assets | Asset Type | Weighted Average Life (Years) | Gross Carrying Amount (June 30, 2025) (thousands) | Accumulated Amortization (June 30, 2025) (thousands) | Net (June 30, 2025) (thousands) | Gross Carrying Amount (Dec 31, 2024) (thousands) | Accumulated Amortization (Dec 31, 2024) (thousands) | Net (Dec 31, 2024) (thousands) | | :----------------------- | :---------------------------- | :------------------------------------------------ | :--------------------------------------------------- | :------------------------------ | :----------------------------------------------- | :-------------------------------------------------- | :----------------------------- | | Customer relationships | 15 | $3,500 | $(3,344) | $156 | $3,500 | $(3,227) | $273 | | Total amortizable intangible assets | | $3,500 | $(3,344) | $156 | $3,500 | $(3,227) | $273 | - Amortization expense for intangible assets was **$58,000** in both Q2 2025 and Q2 2024, and **$116,000** for both YTD 2025 and YTD 2024[20](index=20&type=chunk) [Note 6. Segment Information](index=10&type=section&id=6.%20Segment%20Information) Presents financial data disaggregated by the company's reportable operating segments: Wholesale and Retail - The company has two reportable segments: North American wholesale operations (Wholesale) and North American retail operations (Retail), with corporate expenses included in the Wholesale segment[21](index=21&type=chunk) Net Sales and Earnings from Operations by Segment (Three Months Ended June 30) | Metric | Wholesale 2025 (thousands) | Retail 2025 (thousands) | Total 2025 (thousands) | Wholesale 2024 (thousands) | Retail 2024 (thousands) | Total 2024 (thousands) | | :--------------------------------------- | :------------------------- | :---------------------- | :--------------------- | :------------------------- | :---------------------- | :--------------------- | | Product sales | $45,473 | $6,773 | $52,246 | $49,741 | $7,603 | $57,344 | | Licensing revenues | $157 | — | $157 | $507 | — | $507 | | Net sales - reportable segments | $45,630 | $6,773 | $52,403 | $50,248 | $7,603 | $57,851 | | Earnings from operations - reportable segments | $4,063 | $65 | $4,128 | $5,784 | $695 | $6,479 | Net Sales and Earnings from Operations by Segment (Six Months Ended June 30) | Metric | Wholesale 2025 (thousands) | Retail 2025 (thousands) | Total 2025 (thousands) | Wholesale 2024 (thousands) | Retail 2024 (thousands) | Total 2024 (thousands) | | :--------------------------------------- | :------------------------- | :---------------------- | :--------------------- | :------------------------- | :---------------------- | :--------------------- | | Product sales | $99,252 | $15,439 | $114,691 | $105,464 | $17,422 | $122,886 | | Licensing revenues | $651 | — | $651 | $1,034 | — | $1,034 | | Net sales - reportable segments | $99,903 | $15,439 | $115,342 | $106,498 | $17,422 | $123,920 | | Earnings from operations - reportable segments | $10,699 | $687 | $11,386 | $13,175 | $1,992 | $15,167 | - Other net sales and losses from operations are derived from Florsheim Australia (Australia and South Africa), which ceased Asia Pacific operations in 2023 and completed wind down in 2024[23](index=23&type=chunk) Depreciation and Amortization by Segment | Segment | 3 Months Ended June 30, 2025 (thousands) | 3 Months Ended June 30, 2024 (thousands) | 6 Months Ended June 30, 2025 (thousands) | 6 Months Ended June 30, 2024 (thousands) | | :-------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Wholesale | $531 | $514 | $953 | $1,001 | | Retail | $2 | $2 | $4 | $4 | | Other | $204 | $171 | $377 | $332 | | Total depreciation and amortization | $737 | $687 | $1,334 | $1,337 | [Note 7. Employee Retirement Plans](index=12&type=section&id=7.%20Employee%20Retirement%20Plans) Details the components of pension expense and their classification within the financial statements Components of Pension Expense | Component | 3 Months Ended June 30, 2025 (thousands) | 3 Months Ended June 30, 2024 (thousands) | 6 Months Ended June 30, 2025 (thousands) | 6 Months Ended June 30, 2024 (thousands) | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Service cost | $59 | $97 | $117 | $193 | | Interest cost | $634 | $637 | $1,269 | $1,274 | | Expected return on plan assets | $(628) | $(612) | $(1,256) | $(1,224) | | Net amortization and deferral | $55 | $99 | $110 | $198 | | Pension expense | $120 | $221 | $240 | $441 | - Components of pension expense other than service cost are included in 'other expense, net' in the Condensed Consolidated Statements of Earnings[28](index=28&type=chunk) [Note 8. Leases](index=12&type=section&id=8.%20Leases) Provides information on operating lease arrangements, including costs, maturities, and cash flow impacts - The company leases retail stores, office, and distribution facilities with original lease periods expiring between 2025 and 2031, with renewal options not assumed unless reasonably assured[29](index=29&type=chunk) Operating Lease Costs | Metric | 3 Months Ended June 30, 2025 (thousands) | 3 Months Ended June 30, 2024 (thousands) | 6 Months Ended June 30, 2025 (thousands) | 6 Months Ended June 30, 2024 (thousands) | | :------------------ | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Operating lease costs | $1,186 | $1,116 | $2,267 | $2,222 | | Variable lease costs | — | — | — | — | | Total lease costs | $1,186 | $1,116 | $2,267 | $2,222 | Maturities of Operating Lease Liabilities (as of June 30, 2025) | Year | Operating Leases (thousands) | | :--- | :--------------------------- | | 2025, excluding the six months ended June 30, 2025 | $2,624 | | 2026 | $4,555 | | 2027 | $2,834 | | 2028 | $1,841 | | 2029 | $1,275 | | Thereafter | $424 | | Total lease payments | $13,553 | | Less: imputed interest | $(866) | | Present value of operating lease liabilities | $12,687 | Operating Lease Liabilities Classification | Classification | June 30, 2025 (thousands) | December 31, 2024 (thousands) | | :------------- | :------------------------ | :---------------------------- | | Operating lease liabilities - current | $4,751 | $4,033 | | Operating lease liabilities - non-current | $7,936 | $7,034 | | Total | $12,687 | $11,067 | - As of June 30, 2025, the weighted-average discount rate for lease liabilities was **4.89%**, and the weighted-average remaining lease term was **3.2 years**[32](index=32&type=chunk) Supplemental Cash Flow Information for Operating Leases | Metric | 3 Months Ended June 30, 2025 (thousands) | 3 Months Ended June 30, 2024 (thousands) | 6 Months Ended June 30, 2025 (thousands) | 6 Months Ended June 30, 2024 (thousands) | | :------------------------------------------------------ | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Cash paid for amounts included in the measurement of lease liabilities | $1,311 | $1,181 | $2,524 | $2,322 | | Right-of-use assets obtained in exchange for new lease liabilities (noncash) | $1,575 | $259 | $3,358 | $259 | [Note 9. Income Taxes](index=13&type=section&id=9.%20Income%20Taxes) Explains the company's effective income tax rates and the factors influencing their changes Effective Income Tax Rates | Period | 2025 Effective Tax Rate | 2024 Effective Tax Rate | | :---------------------- | :---------------------- | :---------------------- | | 3 Months Ended June 30 | 51.1% | 25.1% | | 6 Months Ended June 30 | 35.8% | 25.9% | - The higher effective tax rates in 2025 were primarily due to U.S. state taxes and the establishment of a **$1.1 million** valuation allowance on deferred tax assets at Florsheim Australia, as realization was deemed unlikely[34](index=34&type=chunk) [Note 10. Share-Based Compensation Plans](index=13&type=section&id=10.%20Share-Based%20Compensation%20Plans) Details share-based compensation expense and activity for stock options and restricted stock awards Share-Based Compensation Expense | Period | 2025 Compensation Expense (thousands) | 2024 Compensation Expense (thousands) | | :---------------------- | :------------------------------------ | :------------------------------------ | | 3 Months Ended June 30 | $375 | $331 | | 6 Months Ended June 30 | $802 | $698 | - Compensation expense is associated with stock option and restricted stock awards granted in prior years[35](index=35&type=chunk) Stock Option Activity (Six Months Ended June 30, 2025) | Metric | Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (thousands) | | :-------------------------- | :----- | :------------------------------ | :-------------------------------------------------- | :------------------------------------ | | Outstanding at January 1, 2025 | 563,760 | $25.98 | | | | Exercised | (3,020) | $24.84 | | | | Forfeited or expired | (1,370) | $25.34 | | | | Outstanding at June 30, 2025 | 559,370 | $25.99 | 6.0 | $4,261 | | Exercisable at June 30, 2025 | 285,329 | $26.50 | 4.9 | $2,151 | Restricted Stock Award Activity (Six Months Ended June 30, 2025) | Metric | Shares of Restricted Stock | Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (thousands) | | :-------------------------- | :------------------------- | :------------------------------------- | :-------------------------------------------------- | :------------------------------------ | | Non-vested January 1, 2025 | 92,965 | $31.12 | | | | Vested | (3,050) | $30.64 | | | | Forfeited | (150) | $34.65 | | | | Non-vested - June 30, 2025 | 89,765 | $31.13 | 3.0 | $2,977 | [Note 11. Short-Term Borrowings](index=15&type=section&id=11.%20Short-Term%20Borrowings) Describes the company's revolving line of credit and its compliance with financial covenants - As of June 30, 2025, the company had a **$40.0 million** revolving line of credit expiring September 26, 2025, secured by general business assets, with no outstanding borrowings and compliance with all financial covenants[38](index=38&type=chunk) [Note 12. Comprehensive Income](index=15&type=section&id=12.%20Comprehensive%20Income) Presents the components of accumulated other comprehensive loss and changes during the reporting periods Components of Accumulated Other Comprehensive Loss | Component | June 30, 2025 (thousands) | December 31, 2024 (thousands) | | :-------------------------------- | :------------------------ | :---------------------------- | | Foreign currency translation adjustments | $(9,655) | $(11,671) | | Pension liability, net of tax | $(6,181) | $(6,263) | | Total accumulated other comprehensive loss | $(15,836) | $(17,934) | Changes in Accumulated Other Comprehensive Loss (Six Months Ended June 30, 2025) | Metric | Foreign Currency Translation Adjustments (thousands) | Defined Benefit Pension Items (thousands) | Total (thousands) | | :-------------------------- | :------------------------------------------------- | :---------------------------------------- | :---------------- | | Balance, January 1, 2025 | $(11,671) | $(6,263) | $(17,934) | | Net current period other comprehensive income | $2,016 | $82 | $2,098 | | Balance, June 30, 2025 | $(9,655) | $(6,181) | $(15,836) | Changes in Accumulated Other Comprehensive Loss (Six Months Ended June 30, 2024) | Metric | Foreign Currency Translation Adjustments (thousands) | Defined Benefit Pension Items (thousands) | Total (thousands) | | :------------------------------------------ | :------------------------------------------------- | :---------------------------------------- | :---------------- | | Balance, January 1, 2024 | $(7,954) | $(9,357) | $(17,311) | | Net current period other comprehensive (loss) income | $(1,031) | $146 | $(885) | | Balance, June 30, 2024 | $(8,985) | $(9,211) | $(18,196) | Reclassification Adjustments from Accumulated Other Comprehensive Loss (Six Months Ended June 30) | Item | 2025 (thousands) | 2024 (thousands) | Affected line item in the statement where net earnings is presented | | :------------------------------------------ | :--------------- | :--------------- | :---------------------------------------------------------------- | | Amortization of defined benefit pension items: Prior service cost | $10 | $10 | Other expense, net | | Amortization of defined benefit pension items: Actuarial losses | $100 | $188 | Other expense, net | | Total before tax | $110 | $198 | | | Tax benefit | $(28) | $(52) | Provision for income taxes | | Net of tax | $82 | $146 | | [Note 13. Equity](index=17&type=section&id=13.%20Equity) Reconciles changes in common stock, capital in excess of par value, reinvested earnings, and comprehensive loss Equity Reconciliation (Six Months Ended June 30, 2025) | Metric | Common Stock (thousands) | Capital in Excess of Par Value (thousands) | Reinvested Earnings (thousands) | Accumulated Other Comprehensive Loss (thousands) | | :---------------------------------------- | :----------------------- | :----------------------------------------- | :------------------------------ | :----------------------------------------------- | | Balance, January 1, 2025 | $9,643 | $72,577 | $181,299 | $(17,934) | | Net earnings | — | — | $7,799 | — | | Foreign currency translation adjustments | — | — | — | $2,016 | | Pension liability adjustment, net of tax | — | — | — | $82 | | Cash dividends declared | — | — | $(5,087) | — | | Stock options exercised, net | $1 | $(1) | — | — | | Share-based compensation expense | — | $802 | — | — | | Shares purchased and retired | $(105) | — | $(3,030) | — | | Balance, June 30, 2025 | $9,539 | $73,378 | $180,981 | $(15,836) | Equity Reconciliation (Six Months Ended June 30, 2024) | Metric | Common Stock (thousands) | Capital in Excess of Par Value (thousands) | Reinvested Earnings (thousands) | Accumulated Other Comprehensive Loss (thousands) | | :---------------------------------------- | :----------------------- | :----------------------------------------- | :------------------------------ | :----------------------------------------------- | | Balance, January 1, 2024 | $9,497 | $71,661 | $180,646 | $(17,311) | | Net earnings | — | — | $12,257 | — | | Foreign currency translation adjustments | — | — | — | $(1,031) | | Pension liability adjustment, net of tax | — | — | — | $146 | | Cash dividends declared | — | — | $(4,844) | — | | Stock options exercised, net | $12 | $(13) | — | — | | Share-based compensation expense | — | $698 | — | — | | Shares purchased and retired | $(18) | — | $(496) | — | | Balance, June 30, 2024 | $9,491 | $72,346 | $187,563 | $(18,196) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%2E) Analyzes the company's financial condition, operational results, key business trends, and liquidity [Forward-Looking Statements](index=18&type=section&id=FORWARD-LOOKING%20STATEMENTS) Cautions that the report contains forward-looking statements subject to risks and uncertainties - The report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially, as described in the Annual Report on Form 10-K and this Form 10-Q, and the company undertakes no obligation to update these statements[43](index=43&type=chunk) [General Business Overview and Segments](index=18&type=section&id=GENERAL) Describes the company's footwear business, brand portfolio, and reportable operating segments - Weyco Group, Inc. designs, markets, and distributes quality 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, with inventory purchased from third-party overseas manufacturers, almost all denominated in U.S. dollars[44](index=44&type=chunk) - The company has two reportable segments: North American wholesale operations (Wholesale) and North American retail operations (Retail), with 'Other' operations including Florsheim Australia (Australia and South Africa), whose Asia Pacific operations ceased in 2023 and wound down in 2024[45](index=45&type=chunk) - The majority of operations are in the United States, making results primarily affected by U.S. economic conditions and the retail environment[45](index=45&type=chunk) [Current Business Trends - Tariffs](index=18&type=section&id=Current%20Business%20Trends%20-%20Tariffs) Discusses the impact of recent and evolving U.S. tariffs on imported goods and the company's mitigation strategies - In early 2025, the U.S. government enacted incremental tariffs on imported goods, with the tariff on goods from China reaching **145%** in April, then temporarily reduced to **30%** from May 12 to August 12, 2025[46](index=46&type=chunk) - Tariffs on goods from other countries (excluding China) were **10%** throughout Q2 2025, but increased for Cambodia (**19%**), Vietnam (**20%**), and India (**50%**) as of August 7, 2025, with effective dates over the next several months[46](index=46&type=chunk) - U.S. trade and tariff policies currently remain fluid and unpredictable, and the company is committed to adapting and implementing mitigation strategies[46](index=46&type=chunk) [Executive Overview](index=18&type=section&id=EXECUTIVE%20OVERVIEW) Summarizes the company's performance, highlighting challenges from tariffs and consumer spending slowdowns - The tariff environment and consumer affordability issues created headwinds in Q2 2025, leading to consumers pulling back on discretionary footwear purchases and wholesale customers being cautious with inventory buys[47](index=47&type=chunk) - Combined legacy business sales were down **8%** for the quarter (Nunn Bush **-11%**, Stacy Adams **-10%**, Florsheim **-5%**), reflecting softness in men's dress, dress-casual, and basic-casual markets, with this challenging environment expected to persist through H2 2025[48](index=48&type=chunk) - BOGS brand sales were down **14%** in Q2 due to sluggish outdoor category demand, with the company introducing new Fall products, expanding Seamless construction, diversifying manufacturing away from China, and broadening the product line to reduce cold-weather dependency, with cautious optimism for H2 traction[49](index=49&type=chunk)[50](index=50&type=chunk) - Retail segment net sales declined **11%** for the quarter, driven by a tepid consumer environment and decreased sales conversion rates despite increased e-commerce site traffic, as consumers are value-conscious, leading to comparison shopping, while the company aims to maintain pricing integrity[51](index=51&type=chunk) - Florsheim Australia (including Asia and South Africa) experienced a **4%** decline in net sales (**2%** in local currency) for the quarter, primarily due to lower wholesale shipments, with the focus on wholesale growth and efficiency improvements[52](index=52&type=chunk) [Second Quarter Highlights](index=20&type=section&id=Second%20Quarter%20Highlights) Presents key consolidated financial performance metrics for the second quarter ended June 30 Consolidated Financial Highlights (Three Months Ended June 30) | Metric | 2025 (millions) | 2024 (millions) | % Change | | :------------------------ | :-------------- | :-------------- | :------- | | Net sales | $58.2 | $63.9 | (9)% | | Gross earnings | $25.2 | $28.1 | (10)% | | Gross earnings as % of net sales | 43.3% | 43.9% | (0.6) pp | | Earnings from operations | $3.9 | $6.7 | (42)% | | Net earnings | $2.3 | $5.6 | (60)% | | Diluted EPS | $0.24 | $0.59 | (59.3)% | [Year-To-Date Highlights](index=20&type=section&id=Year-To-Date%20Highlights) Summarizes consolidated financial performance metrics for the six months ended June 30 Consolidated Financial Highlights (Six Months Ended June 30) | Metric | 2025 (millions) | 2024 (millions) | % Change | | :------------------------ | :-------------- | :-------------- | :------- | | Net sales | $126.3 | $135.5 | (7)% | | Gross earnings | $55.6 | $60.1 | (7)% | | Gross earnings as % of net sales | 44.0% | 44.4% | (0.4) pp | | Earnings from operations | $10.9 | $14.9 | (27)% | | Net earnings | $7.8 | $12.3 | (36)% | | Diluted EPS | $0.81 | $1.28 | (36.7)% | [Financial Position Highlights](index=20&type=section&id=Financial%20Position%20Highlights) Outlines the company's cash, marketable securities, debt, and cash flow utilization - As of June 30, 2025, cash and marketable securities totaled **$83.8 million**, with no outstanding debt on the **$40.0 million** revolving line of credit[55](index=55&type=chunk) - During the first six months of 2025, the company generated **$14.4 million** in cash from operations, with funds used to pay **$5.0 million** in dividends, repurchase **$3.1 million** of common stock, and pay **$0.7 million** of capital expenditures[55](index=55&type=chunk) - A prefunded dividend of **$21.6 million** was paid to shareholders in January 2025[55](index=55&type=chunk) [Consolidated Results of Operations](index=20&type=section&id=CONSOLIDATED%20RESULTS%20OF%20OPERATIONS) Analyzes consolidated net sales, gross earnings, operating expenses, and net earnings performance - Consolidated net sales for Q2 2025 and YTD 2025 were down **9%** and **7%**, respectively, compared to the same periods of 2024, mainly due to lower sales in the Wholesale and Retail segments[58](index=58&type=chunk) - Consolidated gross earnings as a percentage of net sales decreased to **43.3%** in Q2 2025 (from **43.9%** in Q2 2024) and to **44.0%** YTD 2025 (from **44.4%** in YTD 2024), primarily due to incremental tariffs incurred in Q2[59](index=59&type=chunk) Consolidated Distribution Costs | Period | 2025 (millions) | 2024 (millions) | | :----- | :-------------- | :-------------- | | Q2 | $4.3 | $4.5 | | YTD | $9.3 | $9.7 | - Consolidated selling and administrative expenses as a percentage of net sales increased to **37%** in Q2 2025 (from **34%** in Q2 2024) and to **35%** YTD 2025 (from **33%** in YTD 2024), as many operating costs are fixed[62](index=62&type=chunk) - Consolidated earnings from operations for Q2 2025 and YTD 2025 were down **42%** and **27%**, respectively, mainly due to lower sales in the Wholesale and Retail segments[63](index=63&type=chunk) - Net earnings for Q2 2025 totaled **$2.3 million** (down **60%**) and for YTD 2025 totaled **$7.8 million** (down **36%**), mainly impacted by lower operating earnings in Wholesale and Retail segments, and a **$1.1 million** income tax provision adjustment related to a valuation allowance on deferred tax assets at Florsheim Australia[67](index=67&type=chunk)[66](index=66&type=chunk) [Segment Analysis](index=22&type=section&id=SEGMENT%20ANALYSIS) Provides a detailed breakdown of financial performance across the company's operating segments Segment Net Sales and Earnings from Operations (Three and Six Months Ended June 30) | Segment | Q2 2025 Net Sales (thousands) | Q2 2024 Net Sales (thousands) | Q2 % Change | YTD 2025 Net Sales (thousands) | YTD 2024 Net Sales (thousands) | YTD % Change | | :----------------------- | :---------------------------- | :---------------------------- | :---------- | :----------------------------- | :----------------------------- | :----------- | | North American Wholesale | $45,630 | $50,248 | (9)% | $99,903 | $106,498 | (6)% | | North American Retail | $6,773 | $7,603 | (11)% | $15,439 | $17,422 | (11)% | | Other | $5,818 | $6,081 | (4)% | $10,909 | $11,570 | (6)% | | Total | $58,221 | $63,932 | (9)% | $126,251 | $135,490 | (7)% | | | | | | | | | | Segment | Q2 2025 Op. Earnings (thousands) | Q2 2024 Op. Earnings (thousands) | Q2 % Change | YTD 2025 Op. Earnings (thousands) | YTD 2024 Op. Earnings (thousands) | YTD % Change | | :----------------------- | :----------------------------- | :----------------------------- | :---------- | :------------------------------ | :------------------------------ | :----------- | | North American Wholesale | $4,063 | $5,784 | (30)% | $10,699 | $13,175 | (19)% | | North American Retail | $65 | $695 | (91)% | $687 | $1,992 | (66)% | | Other | $(235) | $182 | NM | $(462) | $(255) | NM | [North American Wholesale Segment](index=23&type=section&id=North%20American%20Wholesale%20Segment) Reviews net sales, gross margins, and operating earnings for the North American wholesale operations North American Wholesale Net Sales by Brand | Brand | Q2 2025 Net Sales (thousands) | Q2 2024 Net Sales (thousands) | Q2 % Change | YTD 2025 Net Sales (thousands) | YTD 2024 Net Sales (thousands) | YTD % Change | | :---------- | :---------------------------- | :---------------------------- | :---------- | :----------------------------- | :----------------------------- | :----------- | | Stacy Adams | $10,586 | $11,779 | (10)% | $23,357 | $25,537 | (9)% | | Nunn Bush | $11,280 | $12,683 | (11)% | $21,891 | $25,373 | (14)% | | Florsheim | $20,953 | $22,068 | (5)% | $44,871 | $44,463 | 1% | | BOGS | $2,553 | $2,969 | (14)% | $8,855 | $9,628 | (8)% | | Forsake | $101 | $242 | (58)% | $278 | $463 | (40)% | | Licensing | $157 | $507 | (69)% | $651 | $1,034 | (37)% | | Total Wholesale Segment | $45,630 | $50,248 | (9)% | $99,903 | $106,498 | (6)% | - Wholesale net sales decreased **9%** in Q2 2025 and **6%** YTD 2025, with sales down across most brands due to a slowdown in consumer spending and cautious retailer inventory management, though Florsheim sales were slightly up YTD due to new product launches[69](index=69&type=chunk) - Wholesale gross earnings as a percentage of net sales decreased to **37.6%** in Q2 2025 (from **38.2%** in Q2 2024) and to **38.6%** YTD 2025 (from **39.0%** in YTD 2024), negatively impacted by incremental tariffs[70](index=70&type=chunk) - Mitigation strategies for tariffs include proactive inventory acquisition, negotiating factory cost reductions, diversifying sourcing away from China, and raising U.S. selling prices effective July 1, 2025[71](index=71&type=chunk) - Wholesale operating earnings decreased **30%** for Q2 2025 and **19%** for YTD 2025, driven by lower sales and gross margins[73](index=73&type=chunk) [North American Retail Segment](index=23&type=section&id=North%20American%20Retail%20Segment) Examines net sales, gross margins, and operating expenses for the North American retail operations - Retail net sales decreased **11%** to **$6.8 million** for Q2 2025 and to **$15.4 million** YTD 2025, primarily due to lower consumer demand on Florsheim and Stacy Adams websites, and less promotional activity on BOGS website[74](index=74&type=chunk) - Retail gross earnings as a percentage of net sales were **66.6%** for Q2 2025 (vs. **67.5%** in Q2 2024) and **66.6%** YTD 2025 (vs. **66.2%** in YTD 2024)[75](index=75&type=chunk) - Retail selling and administrative expenses remained flat at **$4.4 million** for Q2 and **$9.6 million** YTD, but as a percentage of net sales, they increased to **66%** in Q2 2025 (from **58%** in Q2 2024) and to **62%** YTD 2025 (from **55%** in YTD 2024) due to fixed costs[76](index=76&type=chunk) - Retail operating earnings declined **$0.6 million** for Q2 2025 and **$1.3 million** YTD 2025, mainly due to lower sales and gross margins[77](index=77&type=chunk) [Other (Florsheim Australia)](index=25&type=section&id=Other%20%28Florsheim%20Australia%29) Reports on the financial performance of Florsheim Australia, focusing on sales and operating losses - The 'other' category now reflects only Australia and South Africa operations, as Asia Pacific operations ceased in 2023 and wound down in 2024[78](index=78&type=chunk) - Florsheim Australia's net sales decreased **4%** to **$5.8 million** for Q2 2025 (**2%** in local currency) and **6%** YTD 2025 (**2%** in local currency), primarily due to lower wholesale shipments and the weaker Australian dollar, with the YTD local currency decrease partially offset by higher sales in South Africa and Australia[79](index=79&type=chunk) - Florsheim Australia reported operating losses of **$0.2 million** for Q2 2025 (vs. earnings of **$0.2 million** in Q2 2024) and widened to **$0.5 million** YTD 2025 (from **$0.3 million** YTD 2024), mainly due to lower sales[80](index=80&type=chunk) [Other Income and Expense](index=25&type=section&id=Other%20income%20and%20expense) Discusses interest income, other net expenses, and the effective income tax rate - Interest income decreased due to lower interest rates in 2025, while other expense, net, remained relatively flat, comprising non-service pension costs and foreign currency transaction gains/losses[81](index=81&type=chunk)[82](index=82&type=chunk) - The effective income tax rate increased to **51.1%** for Q2 2025 (from **25.1%** in Q2 2024) and to **35.8%** YTD 2025 (from **25.9%** in YTD 2024), primarily due to a **$1.1 million** valuation allowance on deferred tax assets at Florsheim Australia[83](index=83&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Assesses the company's cash flow generation, debt capacity, and overall financial flexibility [Operating Activities](index=25&type=section&id=Operating%20Activities) Analyzes cash flows generated from the company's primary business operations - Net cash provided by operating activities decreased by **$3.3 million** to **$14.4 million** in the first six months of 2025, primarily due to lower net earnings and changes in operating assets and liabilities, especially inventory[85](index=85&type=chunk) - Cash flows from inventory changes decreased **$4.2 million**, as inventory levels were higher than normal due to proactive expediting ahead of incremental tariffs, with the company aiming to normalize inventory pairs, but dollar value may increase due to tariffs[86](index=86&type=chunk) [Investing Activities](index=27&type=section&id=Investing%20Activities) Details cash flows related to the acquisition and disposal of long-term assets and investments - Net cash used for investing activities increased to **$0.7 million** in the first six months of 2025 (from **$0.1 million** in 2024) due to higher capital expenditures and less proceeds from marketable securities maturities[87](index=87&type=chunk) - Capital expenditures totaled **$0.7 million** for the period, with estimated total capital expenditures for 2025 projected between **$1.0 million** and **$2.0 million**[87](index=87&type=chunk) [Financing Activities](index=27&type=section&id=Financing%20Activities) Reports cash flows from debt, equity transactions, dividends, and share repurchases - Net cash used for financing activities increased to **$8.2 million** in the first six months of 2025 (from **$7.7 million** in 2024), driven by a **$2.6 million** increase in shares repurchased, partially offset by a **$2.1 million** decrease in cash dividends paid[88](index=88&type=chunk) - Cash dividends paid in H1 2025 totaled **$5.0 million** (two payments), while H1 2024 totaled **$7.2 million** (three payments, including one declared in Q4 2023)[89](index=89&type=chunk) - On August 5, 2025, a cash dividend of **$0.27 per share** was declared, payable September 30, 2025[90](index=90&type=chunk) - The company repurchased **104,092 shares** for approximately **$3.1 million** in H1 2025, with **744,824 authorized shares** remaining available under the repurchase program as of June 30, 2025[91](index=91&type=chunk) - The **$40.0 million** revolving line of credit had no outstanding borrowings as of June 30, 2025, and the company was in compliance with all financial covenants[92](index=92&type=chunk) [Financing Activities – Non-cash](index=27&type=section&id=Financing%20Activities%20%E2%80%93%20Non-cash) Describes significant non-cash financing transactions, such as prefunded dividend payments - A **$21.6 million** prefunded dividend from Q4 2024 was paid to shareholders in January 2025, recorded as a non-cash financing activity[93](index=93&type=chunk) [Other (Liquidity Outlook)](index=27&type=section&id=Other%20%28Liquidity%20Outlook%29) Provides management's assessment of future liquidity and capital resource adequacy - As of June 30, 2025, approximately **$4.8 million** of cash and cash equivalents was held by foreign subsidiaries[94](index=94&type=chunk) - The company believes available cash, marketable securities, and cash from operations will provide adequate liquidity for at least one year, with continued evaluation for capital expenditures, stock repurchases, and acquisitions[94](index=94&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk%2E) States that there are no applicable quantitative and qualitative disclosures about market risk for the company - Not applicable[95](index=95&type=chunk) [Item 4. Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures%2E) Confirms the effectiveness of the company's disclosure controls and procedures and reports no significant changes in internal control over financial reporting during the quarter ended June 30, 2025 - The CEO and CFO evaluated disclosure controls and procedures as of June 30, 2025, and concluded they are effective in ensuring timely and accurate reporting of material information[96](index=96&type=chunk)[97](index=97&type=chunk) - No significant changes in internal control over financial reporting occurred during the three months ended June 30, 2025, that materially affected or are reasonably likely to materially affect it[98](index=98&type=chunk) [PART II. OTHER INFORMATION](index=29&type=section&id=PART%20II.%20OTHER%20INFORMATION) Covers legal proceedings, risk factors, equity security sales, other disclosures, and exhibits [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings%2E) The company is not currently party to any legal proceedings that are expected to have a material adverse effect on its business, financial condition, operating results, or cash flows - The company is not presently involved in any legal proceedings the resolution of which is believed to have a material adverse effect on its business, financial condition, operating results, or cash flows[100](index=100&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) Highlights the material risk factor related to additional tariffs and retaliatory trade actions, which could significantly increase costs, reduce margins, and decrease consumer demand for the company's products - Additional tariffs on products imported into the U.S., retaliatory trade actions by other countries, and resulting trade wars may have a material adverse impact on the company's business[102](index=102&type=chunk) - The recent incremental tariffs, especially on goods from China, India, and other Asian countries, could materially increase costs and reduce margins, potentially leading to higher product pricing and reduced consumer demand[102](index=102&type=chunk)[103](index=103&type=chunk) - The company is analyzing strategies to mitigate tariff effects, including evaluating country of origin for sourcing, negotiating with suppliers, and adjusting pricing, but there's no assurance these measures will be successful or offset negative impacts[103](index=103&type=chunk) - The specific impact of current and potential tariffs and trade actions on business, results of operations, cash flows, and financial condition is uncertain but could be material[104](index=104&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds%2E) Details the company's common stock repurchase activity during the second quarter of 2025 under its established share repurchase program - The company has a share repurchase program, with **8.5 million shares** authorized for repurchase since its inception in 1998[106](index=106&type=chunk) Common Stock Repurchases (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of the Publicly Announced Program | Maximum Number of Shares that May Yet Be Purchased Under the Program | | :------------------------ | :------------------------------- | :--------------------------- | :----------------------------------------------------------------------- | :------------------------------------------------------------------- | | 04/01/2025 - 04/30/2025 | 43,012 | $28.95 | 43,012 | 781,651 | | 05/01/2025 - 05/31/2025 | 30,679 | $31.36 | 30,679 | 750,972 | | 06/01/2025 - 06/30/2025 | 6,148 | $31.83 | 6,148 | 744,824 | | Total | 79,839 | $30.10 | 79,839 | | [Item 5. Other Information](index=30&type=section&id=Item%205.%20Other%20Information) Confirms that no director or Section 16 officer adopted or terminated a Rule 10b5-1 trading agreement or non-Rule 10b5-1 trading arrangement during the second quarter of 2025 - No director or Section 16 officer adopted or terminated a 'Rule 10b5-1 trading agreement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended June 30, 2025[108](index=108&type=chunk) [Item 6. Exhibits](index=30&type=section&id=Item%206.%20Exhibits%2E) Lists the exhibits filed with the Form 10-Q, including certifications from the CEO and CFO, and financial information formatted in iXBRL Exhibits Filed | Exhibit | Description | | :------ | :---------- | | 31.1 | Certification of Chief Executive Officer | | 31.2 | Certification of Chief Financial Officer | | 32 | Section 906 Certification of Chief Executive Officer and Chief Financial Officer | | 101 | iXBRL formatted financial information (Condensed Consolidated Balance Sheets, Statements of Earnings, Comprehensive Income, Cash Flows, and Notes) | | 104 | iXBRL formatted cover page | [Signatures](index=31&type=section&id=SIGNATURES) Contains the duly authorized signature for the report on behalf of Weyco Group, Inc - The report was signed on August 7, 2025, by Judy Anderson, Vice President, Chief Financial Officer, and Secretary, as a duly authorized officer and Principal Financial Officer[113](index=113&type=chunk)

Financial Data and Key Metrics Changes - Overall net sales for Q2 2025 were $58.2 million, down 9% from $63.9 million in Q2 2024 [5] - Consolidated gross earnings were 43.3% of net sales compared to 43.9% in the previous year [5] - Earnings from operations were $3.9 million, down 42% from $6.7 million in Q2 2024 [6] - Net earnings totaled $2.3 million, down 60% from $5.6 million last year [6] - Diluted earnings per share were $0.24 in Q2 2025, compared to $0.59 in Q2 2024 [6] Business Line Data and Key Metrics Changes - North American wholesale segment net sales were $45.6 million, down 9% from $50.3 million last year [6] - Retail segment net sales were $6.8 million, down 11% from $7.6 million in 2024 [12] - Florsheim Australia net sales were $5.8 million, down 4% from $6.1 million in 2024 [14] - Retail gross earnings as a percentage of net sales were 66.6% in 2025 compared to 67.5% in 2024 [12] Market Data and Key Metrics Changes - The overall men's dress, dress casual, and basic casual markets are under pressure, with the traditional men's business being one of the first categories impacted in a slowing footwear market [20] - BOGS brand sales were down 14% compared to 2024 due to sluggish consumer demand in the outdoor category [21] - Retailer inventories for outdoor footwear are now very clean, indicating cautious inventory management [22] Company Strategy and Development Direction - The company is actively working to diversify its supply chain away from reliance on China, which previously accounted for 75% of its factory base [18] - The focus is on maintaining quality and value across all brands while adapting to the evolving tariff environment [19] - The company aims to grow its wholesale business in Australia and South Africa while managing retail operations carefully [54][58] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer sentiment is cautious due to affordability issues and uncertainty around tariffs, leading to reduced discretionary spending [17] - The expectation is that the challenging environment will persist through the second half of the year [21] - The company is optimistic about new product introductions and expanding its product line to be less dependent on cold weather demand [21] Other Important Information - The consolidated effective tax rate was 51.1% for the quarter, up from 25.1% in the previous year due to a valuation allowance on deferred tax assets [15] - Cash and marketable securities totaled $83.8 million with no debt outstanding on the revolving line of credit [15] - The Board of Directors declared a cash dividend of $0.27 per share, payable on September 30, 2025 [16] Q&A Session Summary Question: Can you quantify the change in inventory due to pre-purchasing? - Management indicated that inventory levels are returning to normal, expected to be in the $70 to $75 million range, but the dollar value may increase due to tariffs [31][32] Question: What is the approach if warning flags arise regarding wholesale customers' creditworthiness? - Management stated they monitor the situation closely and aim to work with retailers while being realistic about market changes [50] Question: What is the strategic importance of Florsheim Australia? - Management emphasized the long-standing presence in Australia, the dominance in the market, and the potential for profitability through careful management of retail and wholesale operations [52][54]

Core Viewpoint - Weyco Group reported significant declines in financial performance for Q2 2025, with revenue falling to $58.2 million and diluted earnings per share dropping to $0.24, reflecting broad-based demand weakness and the impact of new U.S. tariffs on footwear imported from China [1][5][9] Financial Performance - Revenue (GAAP) decreased by 9% year-over-year from $63.9 million in Q2 2024 to $58.2 million in Q2 2025 [2] - Diluted earnings per share (GAAP) fell by 59.3%, from $0.59 in Q2 2024 to $0.24 in Q2 2025 [2] - Gross margin decreased to 43.3%, down 0.6 percentage points from the previous year [2][8] - Earnings from operations dropped by 41.6%, from $6.7 million in Q2 2024 to $3.9 million in Q2 2025 [2] - Net earnings fell by 58.9%, from $5.6 million in Q2 2024 to $2.3 million in Q2 2025 [2] Business Overview - Weyco Group designs, markets, and distributes footwear under brands such as Florsheim, Nunn Bush, Stacy Adams, and BOGS, primarily through wholesale channels in North America, Australia, and South Africa [3] Strategic Focus - Recent strategies include defending brand recognition, expanding e-commerce, and managing supply chain risks, particularly in response to U.S. tariffs on Chinese goods [4] - The company is focusing on sourcing diversification, inventory management, and price adjustments to mitigate external shocks [4][11] Key Developments - All major revenue sources experienced a slowdown, with the North American Wholesale segment seeing a 9% decline in sales [5][6] - The direct-to-consumer segment also contracted, with retail revenue dropping 11% [7] - Margins were compressed due to rising tariffs, which peaked at 145% in April 2025 [8] Tax and Cash Position - The effective tax rate spiked to 51.1%, influenced by a $1.1 million valuation allowance on deferred tax assets at Florsheim Australia [9] - As of June 30, 2025, the company reported $77.4 million in cash and cash equivalents with no debt [9] Dividend Policy - The company raised its quarterly dividend by 4% to $0.27 per share in May 2025, providing stability for shareholders [10][12] Management Outlook - Management anticipates continued top-line pressure due to economic uncertainty and reduced consumer sentiment, with no specific revenue or earnings guidance provided for the remainder of fiscal 2025 [11] - Key variables to monitor include U.S. footwear tariff negotiations, sourcing progress outside of China, and margin trends [12]

[Second Quarter 2025 Overview](index=1&type=section&id=Second%20Quarter%202025%20Overview) WEYCO Group faced challenges in Q2 2025 with a 9% decline in net sales, a 42% drop in operating earnings, and a 60% decrease in net earnings, primarily due to slower consumer spending and rising tariff costs [Consolidated Financial Highlights](index=1&type=section&id=Consolidated%20Financial%20Highlights) WEYCO Group's Q2 2025 consolidated financial performance saw significant declines in net sales, operating earnings, net earnings, and diluted EPS compared to the prior year **Q2 2025 Consolidated Financial Highlights (vs Q2 2024):** | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | YoY Change (%) | | :------------------- | :------------------- | :------------------- | :------------- | | Net Sales | 58.2 | 63.9 | -9% | | Gross Margin | 43.3% | 43.9% | -0.6 pp | | Operating Earnings | 3.9 | 6.7 | -42% | | Net Earnings | 2.3 | 5.6 | -60% | | Diluted EPS | 0.24 | 0.59 | -59.3% | [CEO Commentary and Outlook](index=3&type=section&id=CEO%20Commentary%20and%20Outlook) The CEO noted Q2 headwinds from tariffs and reduced consumer spending, impacting sales, margins, and profitability, with revenue pressure expected to continue amid economic uncertainty - The tariff environment and reduced consumer discretionary spending adversely impacted Q2 business, leading to **decreased sales**, **eroded margins**, and **lower profitability**[15](index=15&type=chunk) - **Continued revenue pressure** is anticipated in the coming months due to heightened economic uncertainty and subdued consumer sentiment[15](index=15&type=chunk) - The company maintains a **strong financial position**, providing stability and flexibility to navigate short-term uncertainties and focus on long-term profitability and sustainable growth[15](index=15&type=chunk) [Segmental Performance Analysis](index=1&type=section&id=Segmental%20Performance%20Analysis) Analysis of WEYCO Group's business segments reveals declines across North American wholesale, North American retail, and other operations, driven by reduced sales and tariff impacts [North American Wholesale Segment](index=1&type=section&id=North%20American%20Wholesale%20Segment) North American wholesale net sales decreased by 9% due to cautious retailer purchasing, with operating earnings down 30% impacted by tariffs and higher SG&A as a percentage of sales **North American Wholesale Key Financial Data (Q2 2025 vs Q2 2024):** | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | YoY Change (%) | | :------------------- | :------------------- | :------------------- | :------------- | | Net Sales | 45.6 | 50.3 | -9% | | Gross Margin | 37.6% | 38.2% | -0.6 pp | | Selling and Administrative Expenses | 13.1 | 13.4 | -2.2% | | SG&A as % of Net Sales | 29% | 27% | +2 pp | | Operating Earnings | 4.1 | 5.8 | -30% | - Sales for Nunn Bush, Stacy Adams, Florsheim, and BOGS brands **decreased by 11%, 10%, 5%, and 14%**, respectively[3](index=3&type=chunk) - The decline in operating earnings is primarily attributed to **lower sales** and **reduced gross margin**[4](index=4&type=chunk) [North American Retail Segment](index=1&type=section&id=North%20American%20Retail%20Segment) North American retail net sales declined by 11%, primarily due to reduced website sales for Florsheim and Stacy Adams, reflecting decreased consumer demand for footwear **North American Retail Key Financial Data (Q2 2025 vs Q2 2024):** | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | YoY Change (%) | | :------------------- | :------------------- | :------------------- | :------------- | | Net Sales | 6.8 | 7.6 | -11% | | Gross Margin | 66.6% | 67.5% | -0.9 pp | | Operating Earnings | 0.1 | 0.7 | -85.7% | - The sales decline is mainly due to **lower Florsheim and Stacy Adams website sales**, reflecting a decrease in consumer demand for footwear[8](index=8&type=chunk) [Other Operations (Florsheim Australia)](index=1&type=section&id=Other%20Operations%20%28Florsheim%20Australia%29) Other operations, now limited to Australia and South Africa, experienced a 4% net sales decline, partly due to a weaker AUD, shifting from operating income to a loss - The scope of other operations has been adjusted for Q2 2025 to reflect only **Australia and South Africa businesses**, following the liquidation of Asia Pacific operations in 2024[10](index=10&type=chunk) **Florsheim Australia Key Financial Data (Q2 2025 vs Q2 2024):** | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | YoY Change (%) | | :------------------- | :------------------- | :------------------- | :------------- | | Net Sales | 5.8 | 6.1 | -4% | | Local Currency Sales Change | -2% | N/A | N/A | | Gross Margin | 60.9% | 62.0% | -1.1 pp | | Operating Earnings/(Loss) | (0.2) | 0.2 | N/A (Shift to Loss) | - The **weakening Australian dollar against the US dollar** was a contributing factor to the sales decline[12](index=12&type=chunk) [Key Business Factors and Financial Details](index=1&type=section&id=Key%20Business%20Factors%20and%20Financial%20Details) This section details the impact of new tariffs and mitigation strategies, alongside the significant increase in the effective tax rate due to a valuation allowance for deferred tax assets [Incremental Tariffs and Mitigation Efforts](index=1&type=section&id=Incremental%20Tariffs%20and%20Mitigation%20Efforts) The US government implemented new reciprocal and retaliatory tariffs, reaching 145% on Chinese imports before a temporary reduction to 30%, with the company implementing various mitigation strategies - The US government implemented **new tariffs in early 2025**, with duties on Chinese imports reaching **145% in April**, then temporarily reduced to **30% on May 12** for 90 days[5](index=5&type=chunk) - Tariffs on imports from countries other than China were **10% in Q2** and are set to increase to **19-25% on August 7, 2025**[5](index=5&type=chunk) - Mitigation efforts include **accelerated inventory purchases**, **negotiating cost reductions with Chinese suppliers**, **shifting some footwear sourcing out of China**, and **increasing US selling prices effective July 1, 2025**[6](index=6&type=chunk) - The US trade and tariff policy remains **unstable and unpredictable**, creating uncertainty regarding the near-term impact of tariffs on gross margins[7](index=7&type=chunk) [Provision for Income Taxes](index=3&type=section&id=Provision%20for%20Income%20Taxes) The effective tax rate significantly increased to 51.1% in Q2 2025, primarily due to a $1.1 million valuation allowance established against deferred tax assets for Florsheim Australia **Effective Tax Rate (Q2 2025 vs Q2 2024):** | Metric | Q2 2025 | Q2 2024 | | :----------- | :------- | :------- | | Effective Tax Rate | 51.1% | 25.1% | - The increase in the effective tax rate is primarily due to a **$1.1 million valuation allowance** established against deferred tax assets for Florsheim Australia[14](index=14&type=chunk) [Corporate Information](index=3&type=section&id=Corporate%20Information) This section provides details on the declared quarterly dividend, upcoming conference call for Q2 results, an overview of WEYCO Group's business, and a cautionary note on forward-looking statements [Dividend Declaration](index=3&type=section&id=Dividend%20Declaration) The Board of Directors declared a regular quarterly cash dividend of $0.27 per share, payable on September 30, 2025 **Dividend Declaration:** | Metric | Details | | :----------- | :------------------- | | Dividend Type | Regular Quarterly Cash Dividend | | Amount Per Share | $0.27 | | Record Date | August 18, 2025 | | Payment Date | September 30, 2025 | [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) A conference call is scheduled for August 6, 2025, at 11:00 AM ET to discuss Q2 2025 financial results, with online pre-registration and replay options available - A conference call will be held on **August 6, 2025, at 11:00 AM ET**, to discuss Q2 financial results[17](index=17&type=chunk) - Participants are required to **pre-register online**, and a replay will be available approximately two hours after the call for one year[17](index=17&type=chunk)[18](index=18&type=chunk) [About WEYCO Group](index=3&type=section&id=About%20Weyco%20Group) WEYCO Group, Inc. designs and markets high-quality footwear for men, women, and children under various brands, sold globally through multiple channels and company-operated stores - WEYCO Group designs and markets **men's, women's, and children's footwear**[19](index=19&type=chunk) - Key brands include **Florsheim, Nunn Bush, Stacy Adams, BOGS, and Forsake**[19](index=19&type=chunk) - Products are sold through leading footwear stores, department stores, specialty stores, and global e-commerce websites, with Florsheim stores operated in the **US, Australia, and South Africa**[19](index=19&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements subject to various factors, including tariff uncertainties, economic conditions, and market competition, which could cause actual results to differ materially - Forward-looking statements are subject to various factors that could cause **actual results to differ materially** from expectations[20](index=20&type=chunk) - Key risk factors include **uncertainty in US trade and tariff policies** (especially on Chinese goods), **inflation**, **economic slowdowns** in the US or Australia, **market competition**, **seasonal weather**, **ability to procure products timely**, **consumer acceptance**, and the **impact of geopolitical conflicts**[20](index=20&type=chunk) [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated financial statements, including the balance sheets, statements of earnings, and statements of cash flows, for the relevant periods [Balance Sheets](index=4&type=section&id=Balance%20Sheets) As of June 30, 2025, total assets decreased to $300,936 thousand, with a significant reduction in total liabilities and a slight increase in total equity compared to December 31, 2024 **Condensed Consolidated Balance Sheet Summary (As of June 30, 2025 vs December 31, 2024):** | Metric | June 30, 2025 (Thousand USD) | December 31, 2024 (Thousand USD) | | :------------------- | :------------------- | :------------------- | | Total Assets | 300,936 | 324,086 | | Total Liabilities | 52,874 | 78,501 | | Total Equity | 248,062 | 245,585 | - Cash and cash equivalents **increased from $70,963 thousand to $77,430 thousand**[22](index=22&type=chunk) - Inventory **decreased from $74,012 thousand to $71,258 thousand**[22](index=22&type=chunk) [Statements of Earnings](index=5&type=section&id=Statements%20of%20Earnings) Q2 2025 saw declines in net sales, gross profit, operating earnings, and net earnings compared to the prior year, with diluted EPS falling to $0.24 **Condensed Consolidated Statements of Earnings Summary (Three/Six Months Ended June 30, 2025):** | Metric | Q2 2025 (Thousand USD) | Q2 2024 (Thousand USD) | H1 2025 (Thousand USD) | H1 2024 (Thousand USD) | | :------------------- | :------------------- | :------------------- | :------------------- | :------------------- | | Net Sales | 58,221 | 63,932 | 126,251 | 135,490 | | Gross Profit | 25,223 | 28,092 | 55,598 | 60,099 | | Operating Earnings | 3,893 | 6,661 | 10,924 | 14,912 | | Net Earnings | 2,256 | 5,607 | 7,799 | 12,257 | | Diluted EPS | 0.24 | 0.59 | 0.81 | 1.28 | - Q2 net sales **decreased by 9%**, operating earnings **decreased by 42%**, and net earnings **decreased by 60%** year-over-year[23](index=23&type=chunk) - H1 net sales **decreased by 6.8%**, operating earnings **decreased by 26.7%**, and net earnings **decreased by 36.4%** year-over-year[23](index=23&type=chunk) [Statements of Cash Flows](index=6&type=section&id=Statements%20of%20Cash%20Flows) Net cash from operating activities decreased for the six months ended June 30, 2025, with net cash outflows from investing and financing activities, resulting in a net increase in cash **Condensed Consolidated Statements of Cash Flows Summary (Six Months Ended June 30, 2025):** | Cash Flow Type | H1 2025 (Thousand USD) | H1 2024 (Thousand USD) | | :------------------- | :------------------- | :------------------- | | Net Cash from Operating Activities | 14,357 | 17,668 | | Net Cash from Investing Activities | (672) | (129) | | Net Cash from Financing Activities | (8,174) | (7,676) | | Effect of Exchange Rate Changes | 956 | (768) | | Net Increase in Cash and Cash Equivalents | 6,467 | 9,095 | | Cash and Cash Equivalents, End of Period | 77,430 | 78,407 | - Net cash from operating activities **decreased by 18.7%** year-over-year[24](index=24&type=chunk) - Net cash outflow from investing activities **increased**, primarily due to higher purchases of property, plant, and equipment[24](index=24&type=chunk)

Core Viewpoint - Weyco Group, Inc. reported a decline in financial performance for the second quarter of 2025, attributed to reduced consumer spending and increased tariffs impacting gross margins and profitability [1][15]. Financial Performance Summary - Net sales for the second quarter of 2025 were $58.2 million, down 9% from $63.9 million in the same quarter of 2024 [10]. - Gross earnings as a percentage of net sales decreased to 43.3% from 43.9% year-over-year [10]. - Earnings from operations fell to $3.9 million, a 42% decrease compared to $6.7 million in Q2 2024 [10]. - Net earnings were $2.3 million, down 60% from $5.6 million in Q2 2024 [10]. - Diluted earnings per share decreased to $0.24 from $0.59 in Q2 2024 [10]. Segment Performance North American Wholesale Segment - Wholesale net sales were $45.6 million, down 9% from $50.3 million in Q2 2024 [3]. - Sales for major brands such as Nunn Bush, Stacy Adams, Florsheim, and BOGS decreased by 11%, 10%, 5%, and 14%, respectively [3]. - Wholesale gross earnings as a percentage of net sales were 37.6%, down from 38.2% in Q2 2024 [4]. - Operating earnings in this segment totaled $4.1 million, a 30% decline from $5.8 million in 2024 [4]. North American Retail Segment - Retail segment net sales were $6.8 million, down 11% from $7.6 million in 2024 [8]. - Retail gross earnings as a percentage of net sales decreased to 66.6% from 67.5% in the previous year [9]. - Operating earnings in the retail segment fell to $0.1 million from $0.7 million in Q2 2024 [9]. Other Operations - Net sales from Florsheim Australia were $5.8 million, down 4% from $6.1 million in Q2 2024 [12]. - Operating losses in Florsheim Australia totaled $0.2 million, compared to operating earnings of $0.2 million in the previous year [13]. Tariff Impact - The U.S. government enacted incremental tariffs on imported goods, with tariffs on goods sourced from China reaching 145% before being temporarily reduced to 30% [5]. - The company has implemented measures to mitigate the impact of these tariffs, including increasing inventory ahead of tariff changes and negotiating cost reductions with suppliers [6][7]. Tax Provision - The effective tax rate for Q2 2025 was 51.1%, up from 25.1% in Q2 2024, primarily due to a valuation allowance on deferred tax assets [14]. Dividend Declaration - The Board of Directors declared a quarterly cash dividend of $0.27 per share, payable on September 30, 2025 [16].

Core Viewpoint - Weyco Group, Inc. is set to announce its second quarter 2025 financial results on August 5, 2025, followed by a conference call on August 6, 2025, 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, BOGS, and Forsake [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].

Core Insights - Weyco Group, Inc. (WEYS) shares have increased by 6.2% since the earnings report for Q1 2025, outperforming the S&P 500 index, which declined by 0.2% during the same period [1] - The company reported a decline in earnings per share to 57 cents, down 17% from 69 cents in Q1 2024, with net sales decreasing by 5% to $68 million [2] Financial Performance - Net earnings fell 17% year-over-year to $5.5 million, while earnings from operations decreased by 15% to $7 million [2] - The North American Wholesale segment experienced a 4% decline in sales to $54.3 million, with mixed performance across brands [3] - The North American Retail segment saw a 12% drop in sales to $8.7 million, attributed to reduced promotional activity [4] - International sales from Florsheim Australia and South Africa decreased by 7% to $5.1 million, primarily due to foreign exchange issues [5] Management Commentary - The CEO highlighted challenges such as geopolitical risks and macroeconomic uncertainty, while noting proactive measures taken by the company [6] - Future risks include significantly higher tariffs on goods sourced from China, with the effective tariff rate increasing from 16% in 2024 to 161% in 2025 [7] Strategic Developments - To address rising costs from tariffs, the company plans to raise prices starting in summer 2025 and diversify sourcing efforts [7] - The board approved a 4% increase in the quarterly dividend to 27 cents per share, payable on June 30, 2025 [8]

Core Viewpoint - Weyco Group, Inc. is conducting a conference call to discuss its first quarter 2025 earnings results, indicating a focus on financial performance and future expectations [1][3]. Company Overview - The conference call features key company participants including Judy Anderson (CFO), Tom Florsheim (Chairman & CEO), and John Florsheim (President & COO), highlighting the leadership team involved in the discussion [3]. Financial Performance - The call aims to provide insights into the financial results for the first quarter of 2025, although specific financial metrics have not yet been disclosed in the provided text [3]. Forward-Looking Statements - The company will make forward-looking statements regarding future events and financial performance, emphasizing that these are predictions and actual results may differ materially [4]. - A cautionary note is included regarding the uncertainty of U.S. trade and tariff policies, inflation impacts on costs, and consumer demand, which are factors that could affect future performance [5].