Weyco (WEYS) - 2025 Q1 - Quarterly Results

Q1 2025 Financial Highlights 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 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 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 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] 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) 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] - 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] 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 Management addresses significant new U.S. tariffs on Chinese goods and outlines strategies to mitigate their impact on future costs Tariffs and Outlook 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] - Mitigation strategies include negotiating cost reductions with suppliers, planning to raise selling prices in Summer 2025, and accelerating sourcing diversification[10] - 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] Shareholder Information The company announced a quarterly cash dividend increase and provided details for an upcoming conference call Dividend Declaration 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 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] - Participation details: Dial 1-888-596-4144 or 1-646-968-2525, with passcode 6441034[14] Financial Statements Key financial statements provide a detailed overview of the company's balance sheet, earnings, and cash flows for Q1 2025 Condensed Consolidated Balance Sheets 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 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 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 |