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].

Part I. Financial Information [Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements.) This section presents the unaudited condensed consolidated financial statements as of March 31, 2025, showing declines in net sales and net income compared to the prior year, with total assets decreasing from **$324.1 million** to **$299.3 million**, and a declared dividend of **$0.26 per share** [Condensed Consolidated Financial Statements](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Total assets decreased from **$324.1 million** at year-end 2024 to **$299.3 million** by March 31, 2025, driven by reduced current assets, while net sales fell to **$68.0 million** from **$71.6 million**, leading to a decline in net income from **$6.7 million** to **$5.5 million** and diluted EPS from **$0.69** to **$0.57**, alongside a significant drop in operating cash flow Condensed Consolidated Balance Sheets (in thousands of USD) | Financial Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets:** | | | | Cash and cash equivalents | $71,546 | $70,963 | | Inventory | $68,186 | $74,012 | | Total current assets | $183,700 | $209,391 | | Total assets | $299,295 | $324,086 | | **Liabilities and Equity:** | | | | Total current liabilities | $19,114 | $47,263 | | Total liabilities | $50,745 | $78,501 | | Total equity | $248,550 | $245,585 | Condensed Consolidated Statements of Operations (in thousands of USD, except per share amounts) | Financial Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net sales | $68,030 | $71,558 | | Gross profit | $30,375 | $32,007 | | Operating earnings | $7,031 | $8,251 | | Net income | $5,543 | $6,650 | | Diluted earnings per share | $0.57 | $0.69 | Condensed Consolidated Statements of Cash Flows (in thousands of USD) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $4,129 | $14,336 | | Net cash (used in)/provided by investing activities | ($417) | $45 | | Net cash used in financing activities | ($3,214) | ($4,669) | [Notes to Financial Statements](index=7&type=section&id=Notes%20to%20Financial%20Statements) The notes detail accounting policies and financial conditions, highlighting two reporting segments (North America Wholesale and Retail), **$11.8 million** in operating lease liabilities, a **$40 million** revolving credit facility with no outstanding borrowings, and a stable effective tax rate around **26.5%** Segment Operating Performance (for the three months ended March 31, 2025, in thousands of USD) | Segment | Net Sales | Operating Earnings | | :--- | :--- | :--- | | North America Wholesale | $54,273 | $6,636 | | North America Retail | $8,666 | $622 | | Other | $5,091 | ($227) | | **Total** | **$68,030** | **$7,031** | - As of March 31, 2025, total operating lease liabilities amounted to **$11.844 million**, with a weighted-average remaining lease term of **3.2 years** and a weighted-average discount rate of **4.87%**[33](index=33&type=chunk) - The company maintains a **$40 million** revolving credit facility expiring on September 26, 2025, with no outstanding borrowings as of March 31, 2025[39](index=39&type=chunk) - The effective income tax rate for Q1 2025 was **26.5%**, consistent with **26.6%** in Q1 2024, primarily differing from the **21%** U.S. federal rate due to state taxes[35](index=35&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=15&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management attributes the **5%** decline in Q1 2025 net sales to geopolitical and macroeconomic uncertainties impacting consumer and retailer confidence, noting weak performance in traditional brands like Nunn Bush and Stacy Adams, strong Florsheim sales, and significant challenges from increased tariffs on Chinese imports, which are being addressed through price adjustments and sourcing diversification [Results of Operations](index=15&type=section&id=Results%20of%20Operations) Consolidated net sales for Q1 2025 decreased **5%** to **$68.0 million**, with North America Wholesale sales down **4%** due to Stacy Adams (**-7%**) and Nunn Bush (**-16%**) offset by Florsheim's **7%** growth, while North America Retail sales fell **12%** due to reduced promotions, and operating earnings declined **15%** to **$7.0 million**, facing significant challenges from new US tariffs on Chinese imports - Overall net sales for Q1 2025 decreased by **5%**, primarily due to geopolitical and macroeconomic uncertainties impacting consumer and retailer confidence, leading to declines in both wholesale and direct-to-consumer businesses[46](index=46&type=chunk) - Incremental tariffs imposed by the U.S. government have increased the current effective total tariff rate on goods sourced from China from **16%** in 2024 to **161%**, prompting the company to negotiate lower costs with Chinese suppliers, plan price increases starting Summer 2025, and accelerate sourcing diversification to mitigate impact[53](index=53&type=chunk) Wholesale Net Sales Year-over-Year Change by Brand (for the three months ended March 31) | Brand | 2025 Net Sales (in thousands of USD) | 2024 Net Sales (in thousands of USD) | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Stacy Adams | $12,771 | $13,758 | -7% | | Nunn Bush | $10,611 | $12,690 | -16% | | Florsheim | $23,918 | $22,395 | +7% | | BOGS | $6,302 | $6,659 | -5% | - North America Retail segment net sales decreased by **12%**, primarily due to reduced promotional activities on the BOGS website in 2025 compared to the prior year[68](index=68&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company maintained strong liquidity with **$77.9 million** in cash and marketable securities and no debt under its **$40 million** credit facility, despite a significant drop in net cash from operating activities to **$4.1 million** from **$14.3 million** due to proactive inventory build-up ahead of tariff increases, while paying **$2.5 million** in dividends and repurchasing **$0.7 million** in stock - As of March 31, 2025, the company held **$77.9 million** in cash and marketable securities, with no outstanding debt under its **$40 million** revolving credit facility[55](index=55&type=chunk) - Net cash provided by operating activities decreased from **$14.3 million** in the prior year to **$4.1 million**, primarily due to increased inventory-related cash outflows from proactive stocking in anticipation of incremental tariffs[77](index=77&type=chunk)[78](index=78&type=chunk) - During Q1 2025, the company paid **$2.5 million** in cash dividends and repurchased **$0.7 million** worth of common stock[80](index=80&type=chunk) - The Board of Directors declared a cash dividend of **$0.27 per share** on May 6, 2025, representing a **4%** increase from the previous quarter's **$0.26 per share**[82](index=82&type=chunk) [Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures.) Company management, including the CEO and CFO, assessed and concluded that disclosure controls and procedures were effective as of March 31, 2025, with no significant changes in internal control over financial reporting during the quarter that materially affected or were reasonably likely to materially affect them - The company's Chief Executive Officer and Chief Financial Officer assessed and concluded that disclosure controls and procedures were effective as of the end of the reporting period[89](index=89&type=chunk)[91](index=91&type=chunk) - No significant changes in the company's internal control over financial reporting occurred during the three months ended March 31, 2025, that have materially affected or are reasonably likely to materially affect them[92](index=92&type=chunk) Part II. Other Information [Legal Proceedings](index=24&type=section&id=Item%201.%20Legal%20Proceedings.) The company may be involved in legal proceedings in the ordinary course of business but is not currently party to any litigation deemed to have a material adverse effect on its business, financial condition, results of operations, or cash flows - The company is not currently facing any legal proceedings that are likely to have a material adverse effect on its business[94](index=94&type=chunk) [Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) The company identifies a new significant risk: additional US tariffs on imported products, especially from China, which could substantially increase costs, reduce profit margins, and decrease consumer demand due to higher prices, with mitigation strategies under review but uncertain overall impact - A new significant risk involves additional U.S. tariffs imposed on imported goods, particularly a substantial volume of products sourced from China[96](index=96&type=chunk) - Tariffs could lead to significantly increased costs, reduced profit margins, and negatively impact consumer demand and sales volume due to higher product prices[97](index=97&type=chunk) - The company is evaluating strategies such as adjusting sourcing countries, negotiating with suppliers, and modifying pricing to mitigate tariff impacts, though the success of these measures is not guaranteed[97](index=97&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=24&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) During Q1 2025, the company repurchased **24,253** shares of common stock at an average price of **$30.14 per share**, totaling approximately **$0.7 million**, with **824,663** shares remaining available for repurchase under the existing plan as of March 31, 2025 Stock Repurchase Details for Q1 2025 | Period | Total Shares Repurchased | Average Price Paid per Share | | :--- | :--- | :--- | | March 1 - March 31, 2025 | 24,253 | $30.14 | - As of March 31, 2025, **824,663** shares remain authorized for repurchase under the stock repurchase plan[100](index=100&type=chunk)

Financial Data and Key Metrics Changes - Overall net sales for Q1 2025 were $68 million, down 5% from $71.6 million in Q1 2024 [5] - Consolidated gross earnings were 44.6% of net sales for the quarter, compared to 44.7% in the previous year [5] - Operating earnings totaled $7 million, down 15% from $8.3 million in Q1 2024 [6] - Net earnings were $5.5 million or $0.57 per diluted share, compared to $6.7 million or $0.69 per diluted share in the same quarter last year [6] Business Line Data and Key Metrics Changes - In the North American wholesale segment, net sales were $54.3 million, down 4% from $56.2 million last year [6] - Wholesale gross earnings were 39.4% of net sales, compared to 39.6% in the previous year [6] - North American retail segment net sales were $8.7 million, down 12% from $9.8 million in Q1 2024 [7] - Retail gross earnings as a percentage of net sales were 66.6% in Q1 2025, down from 65.3% in Q1 2024 [8] - Florsheim Australia's net sales were $5.1 million, down 7% from $5.5 million in Q1 2024 [9] Market Data and Key Metrics Changes - Florsheim Australia's net sales declined 7% for the quarter or 3% in local currency [10] - Net sales in Australia were up 6% in local currency, with higher sales in both wholesale and retail businesses [10] - Overall inventory as of March 31, 2025, was $68.2 million, down from $74 million at the end of 2024 [18] Company Strategy and Development Direction - The company is focusing on mitigating the impact of increased tariffs by negotiating cost reductions with suppliers and planning to raise selling prices [12] - There is an ongoing effort to diversify sourcing to reduce reliance on China, with plans to reorganize the supply chain [25] - The company remains optimistic about its innovative product offerings and market share growth despite current economic challenges [15][20] Management's Comments on Operating Environment and Future Outlook - Management highlighted significant geopolitical and macroeconomic uncertainties affecting consumer and retailer confidence [14] - The company is optimistic about new product launches and expects improved inventory management to create opportunities for growth [15][17] - Management expressed confidence in their operational execution and ability to navigate the turbulent environment [20] Other Important Information - Cash and marketable securities totaled $77.9 million with no debt outstanding on the revolving line of credit [12] - A cash dividend of $0.27 per share was declared, representing a 4% increase from the previous rate [13] Q&A Session Summary Question: How long can the pause on imports from China last before impacting inventories? - Management indicated they are covered through part of Q3 but will face inventory issues thereafter, while continuing to manufacture in China and shipping to a distribution center in Montreal [23][24] Question: What is the current duty going into Canada? - The duty into Canada is 19%, which is less complicated than the U.S. duty structure [31]

Financial Data and Key Metrics Changes - Overall net sales for Q1 2025 were $68 million, down 5% from $71.6 million in Q1 2024 [4] - Consolidated gross earnings were 44.6% of net sales for the quarter, compared to 44.7% in the previous year [4] - Operating earnings totaled $7 million, down 15% from $8.3 million in Q1 2024 [5] - Net earnings were $5.5 million or $0.57 per diluted share, compared to $6.7 million or $0.69 per diluted share in the same quarter last year [5] Business Line Data and Key Metrics Changes - In the North American wholesale segment, net sales were $54.3 million, down 4% from $56.2 million last year [5] - North American retail segment net sales were $8.7 million, down 12% from record sales of $9.8 million in 2024 [6] - Florsheim Australia's net sales were $5.1 million, down 7% from $5.5 million in Q1 2024 [8] Market Data and Key Metrics Changes - Florsheim Australia's net sales declined 7% for the quarter or 3% in local currency, with a 6% increase in local currency sales in Australia [9] - Overall inventory as of March 31, 2025, was $68.2 million, compared to $74 million at the end of 2024 [18] Company Strategy and Development Direction - The company is focusing on mitigating the impact of increased tariffs by negotiating cost reductions with suppliers and planning to raise selling prices [11] - There is an emphasis on diversifying sourcing to reduce reliance on China, with plans to source from countries like Cambodia, Vietnam, and India [25] - The company remains optimistic about its innovative product lines and is investing in data-driven tools for long-term growth in e-commerce [16] Management's Comments on Operating Environment and Future Outlook - Management noted significant geopolitical and macroeconomic uncertainties affecting consumer and retailer confidence, leading to declines in wholesale and direct-to-consumer businesses [13] - Despite challenges, management expressed confidence in operational execution and the ability to manage supply chain disruptions [20] Other Important Information - Cash and marketable securities totaled $77.9 million with no debt outstanding on the revolving line of credit [11] - A cash dividend of $0.27 per share was declared, representing a 4% increase from the previous rate [12] Q&A Session Summary Question: How long can the pause on imports from China be maintained before impacting inventories? - Management indicated they are covered through part of Q3 but will face inventory issues thereafter, while continuing to manufacture in China and shipping to a distribution center in Montreal [23][24] Question: What is the current duty going into Canada? - The duty into Canada is 19%, which is less complicated than the U.S. duty structure [29]

[Q1 2025 Financial Highlights](index=1&type=section&id=WEYCO%20REPORTS%20FIRST%20QUARTER%20SALES%20AND%20EARNINGS) Weyco Group reported a **5% decline** in Q1 2025 net sales to **$68.0 million**, with net earnings down **17%** to **$5.5 million** Q1 2025 Financial Performance | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $68.0 million | $71.6 million | -5% | | Gross Earnings % | 44.6% | 44.7% | -0.1 pps | | Earnings from Operations | $7.0 million | $8.3 million | -15% | | Net Earnings | $5.5 million | $6.7 million | -17% | | Diluted EPS | $0.57 | $0.69 | -17.4% | [Segment Performance](index=1&type=section&id=First%20Quarter%202025%20Overview) The company's segments experienced varied performance in Q1 2025, with declines in wholesale and retail, and a narrowed loss in other operations [North American Wholesale Segment](index=1&type=section&id=North%20American%20Wholesale%20Segment) Wholesale net sales decreased **4%** to **$54.3 million** due to non-athletic footwear softness, leading to a **10%** drop in operating earnings Brand Sales Performance | Brand | Q1 2025 vs Q1 2024 Sales Change | Reason | | :--- | :--- | :--- | | Florsheim | +7% | New product launches | | Stacy Adams | -7% | Softness in non-athletic footwear | | Nunn Bush | -16% | Softness in non-athletic footwear | | BOGS | -5% | Lower retailer demand | Wholesale Segment Financials | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Sales | $54.3 million | $56.2 million | | Gross Margin | 39.4% | 39.6% | | Operating Earnings | $6.6 million | $7.4 million | [North American Retail Segment](index=1&type=section&id=North%20American%20Retail%20Segment) Retail net sales declined **12%** to **$8.7 million**, primarily due to reduced promotional activities, impacting operating earnings - The sales decrease was mainly due to lower sales on the BOGS website, resulting from reduced promotional activities in 2025 compared to a strong Q1 2024[5](index=5&type=chunk) Retail Segment Financials | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Sales | $8.7 million | $9.8 million | | Gross Margin | 66.6% | 65.3% | | Operating Earnings | $0.6 million | $1.3 million | [Other Operations (Florsheim Australia)](index=1&type=section&id=Other%20Operations) This segment's net sales decreased **7%** to **$5.1 million**, influenced by a weaker AUD, though operating loss narrowed - The company ceased operations in the Asia Pacific region in 2023, with the wind-down completed in 2024, so Q1 2025 results for this category only reflect Australia and South Africa[7](index=7&type=chunk) - The decline in USD net sales was partly due to a weaker Australian dollar, with local currency sales down **3%**, but net sales within Australia alone were up **6%**[8](index=8&type=chunk) Other Operations Financials | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Sales | $5.1 million | $5.5 million | | Gross Margin | 62.7% | 60.2% | | Operating Loss | ($0.2 million) | ($0.4 million) | [Management Discussion and Outlook](index=1&type=section&id=Management%20Discussion%20and%20Outlook) Management addresses significant new U.S. tariffs on Chinese goods and outlines strategies to mitigate their impact on future costs [Tariffs and Outlook](index=1&type=section&id=Tariffs) New U.S. tariffs on Chinese goods increased the effective rate to **161%**, prompting mitigation efforts like price increases and sourcing diversification - The effective total tariff rate on goods sourced from China has increased from **16%** in 2024 to **161%** in 2025 due to new incremental tariffs[10](index=10&type=chunk) - Mitigation strategies include negotiating cost reductions with suppliers, planning to raise selling prices in Summer 2025, and accelerating sourcing diversification[10](index=10&type=chunk) - The company brought in a large amount of inventory ahead of the tariff effective dates, allowing time to evaluate plans and temporarily halt China imports[12](index=12&type=chunk) [Shareholder Information](index=3&type=section&id=Shareholder%20Information) The company announced a quarterly cash dividend increase and provided details for an upcoming conference call [Dividend Declaration](index=3&type=section&id=Dividend%20Declaration) The Board declared a quarterly cash dividend of **$0.27 per share**, a **4% increase**, payable on June 30, 2025 Dividend Details | Dividend Detail | Information | | :--- | :--- | | Dividend per Share | $0.27 | | Increase vs. Prior Quarter | 4% (from $0.26) | | Record Date | May 16, 2025 | | Payment Date | June 30, 2025 | [Conference Call Details](index=3&type=section&id=Conference%20Call%20Details) A conference call is scheduled for May 7, 2025, at 11:00 a.m. ET to discuss Q1 2025 financial results - A conference call will be held on May 7, 2025, at 11:00 a.m. Eastern Time to discuss Q1 2025 results[14](index=14&type=chunk) - Participation details: Dial 1-888-596-4144 or 1-646-968-2525, with passcode 6441034[14](index=14&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) Key financial statements provide a detailed overview of the company's balance sheet, earnings, and cash flows for Q1 2025 [Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Total assets decreased to **$299.3 million**, while total liabilities significantly reduced to **$50.7 million** as of March 31, 2025 Balance Sheet Summary (in thousands) | Balance Sheet Item (in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $71,546 | $70,963 | | Inventories | $68,186 | $74,012 | | Total current assets | $183,700 | $209,391 | | **Total assets** | **$299,295** | **$324,086** | | Accounts payable | $4,801 | $8,378 | | Total current liabilities | $19,114 | $47,263 | | **Total liabilities** | **$50,745** | **$78,501** | | **Total equity** | **$248,550** | **$245,585** | [Condensed Consolidated Statements of Earnings](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20EARNINGS) Q1 2025 net sales were **$68.0 million**, resulting in net earnings of **$5.5 million**, or **$0.57 per diluted share** Income Statement Summary (in thousands) | Income Statement Item (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $68,030 | $71,558 | | Gross earnings | $30,375 | $32,007 | | Earnings from operations | $7,031 | $8,251 | | **Net earnings** | **$5,543** | **$6,650** | | Diluted EPS | $0.57 | $0.69 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash provided by operating activities significantly decreased to **$4.1 million** in Q1 2025, ending with **$71.5 million** cash Cash Flow Summary (in thousands) | Cash Flow Item (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $4,129 | $14,336 | | Net cash (used for) investing activities | ($417) | $45 | | Net cash used for financing activities | ($3,214) | ($4,669) | | **Net increase in cash** | **$583** | **$9,036** | | **Cash at end of period** | **$71,546** | **$78,348** |