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

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

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 Viewpoint - Weyco Group, Inc. reported a decline in financial performance for the first quarter of 2025, with net sales down 5% compared to the same period in 2024, primarily due to lower sales across major brands and reduced consumer spending on non-athletic footwear [3][11]. Financial Performance - Net sales for the first quarter of 2025 were $68.0 million, down from $71.6 million in Q1 2024 [11]. - Gross earnings as a percentage of net sales were 44.6%, slightly down from 44.7% in Q1 2024 [11]. - Earnings from operations decreased by 15% to $7.0 million compared to $8.3 million in Q1 2024 [11]. - Net earnings fell by 17% to $5.5 million from $6.7 million in the previous year [11]. - Diluted earnings per share decreased to $0.57 from $0.69 in Q1 2024 [11]. Segment Performance North American Wholesale Segment - Wholesale net sales were $54.3 million, a 4% decrease from $56.2 million in Q1 2024 [3]. - Florsheim's sales increased by 7% due to new product launches, but this was offset by declines in other brands: Stacy Adams down 7% and Nunn Bush down 16% [3]. - Wholesale operating earnings decreased by 10% to $6.6 million from $7.4 million in 2024 [4]. North American Retail Segment - Retail segment net sales were $8.7 million, down 12% from $9.8 million in 2024 [5]. - Retail operating earnings fell by 52% to $0.6 million from $1.3 million in the previous year [6]. Other Operations - Florsheim Australia reported net sales of $5.1 million, down 7% from $5.5 million in Q1 2024, impacted by a weaker Australian dollar [8]. - In local currency, net sales in Australia increased by 6%, with higher sales in both wholesale and retail [8][9]. Tariff Impact - The effective total tariff rate on goods sourced from China has risen to 161% from 16% in 2024, which may significantly increase future costs of goods sold [10]. - The company has negotiated cost reductions with several Chinese suppliers to mitigate the impact of these tariffs [10][12]. Dividend Declaration - The Board of Directors declared a quarterly cash dividend of $0.27 per share, a 4% increase from the previous rate of $0.26 [14]. Conference Call - A conference call is scheduled for May 7, 2025, to discuss the first quarter 2025 financial results in detail [15].