Financial Data and Key Metrics Changes - Net sales for Q4 2023 were $80.6 million, down 19% from $99 million in Q4 2022 [6] - Consolidated gross earnings increased to 50.3% of net sales in Q4 2023 from 46.6% in Q4 2022 [6] - Quarterly operating earnings were $11.5 million, down 24% from $15.1 million in Q4 2022 [6] - Net earnings for Q4 2023 were $8.5 million or $0.90 per diluted share, compared to $10.2 million or $1.06 per diluted share in Q4 2022 [6] Business Line Data and Key Metrics Changes - North American Wholesale segment net sales were $59.6 million, down 21% from $75.5 million last year, primarily due to a 32% decline in BOGS sales [7] - North American Retail segment net sales were $13.9 million, down 3% from $14.3 million last year, with retail operating earnings reaching a record $3.5 million, up 6% from $3.3 million in 2022 [8][9] - Florsheim Australia net sales were $7.2 million, down 23% from $9.2 million in Q4 2022, due to the loss of a significant wholesale customer [10] Market Data and Key Metrics Changes - Consolidated net sales for the full year 2023 were $318 million, down 10% from $351.7 million in 2022 [12] - North American Wholesale net sales for 2023 were $250.4 million, down 12% from $283.2 million in 2022 [13] - Florsheim Australia's net sales totaled $29.6 million in 2023, down 7% from $31.8 million in 2022 [14] Company Strategy and Development Direction - The company is focusing on product innovation for the BOGS brand, emphasizing seamless rubber boot construction to enhance durability and reduce weight [17] - There is a strategic shift towards casual and hybrid footwear to adapt to changing consumer preferences, with a significant portion of sales in casual styles [29] - The company is investing in its distribution platform to improve efficiency, particularly in e-commerce and dropship operations [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a slowdown in sales due to consumers prioritizing spending on experiences over apparel [16] - The outdoor boot market is expected to remain challenging in 2024 as retailers adjust their inventory levels [17] - Management expressed confidence in maintaining healthy gross margins and strong cash flow, with plans to explore acquisitions and shareholder returns [20] Other Important Information - Cash and marketable securities totaled $75.9 million with no debt outstanding on the revolving line of credit [15] - The board declared a cash dividend of $0.25 per share, payable on March 29, 2024 [15] Q&A Session Summary Question: Compliment on financial performance and cash management - Management appreciated the acknowledgment of their financial results and cash management strategies [22][23] Question: Breakdown of cash holdings geographically - The majority of cash is held in the U.S. and Canada, earning between 5% and 5.5% [24] Question: Consideration of shareholder capital return options - Management is exploring various options for cash utilization, including potential special dividends and stock buybacks [25] Question: Inquiry about the decline in traditional dress shoe sales - Management confirmed a significant decline in traditional dress shoe sales and emphasized the shift towards more casual and hybrid styles [26][27][28]
Weyco (WEYS) - 2023 Q4 - Earnings Call Transcript