Weyco (US:WEYS)2023-08-02 17:05Financial Data and Key Metrics Changes - Overall net sales for Q2 2023 were $67 million, down 10% from record sales of $74.4 million in 2022 [5] - Consolidated gross earnings increased to 43.3% of net sales compared to 40% in the same quarter last year, primarily due to higher gross margins in the North American wholesale segment [5] - Net earnings reached a record $4.9 million or $0.50 per diluted share, up 8% from $4.5 million or $0.47 per diluted share last year [6] Business Line Data and Key Metrics Changes - North American wholesale segment net sales were $51.5 million, down 13% from $59 million in 2022, with reduced demand across all major brands [6] - Retail segment net sales were a record $7.6 million, up 3% from $7.4 million in 2022, driven by higher sales volumes across e-commerce websites [8] - Florsheim Australia net sales totaled $7.9 million, slightly down from $8 million in Q2 2022, but up 7% in local currency [10] Market Data and Key Metrics Changes - The footwear industry is experiencing a shift in consumer discretionary spending towards travel and dining, leading to a return to historical sales norms [15] - Legacy brands Florsheim, Stacy Adams, and Nunn Bush saw sales declines of 11%, 17%, and 1% respectively, reflecting the overall industry slowdown [16] - BOGS business was down 35% compared to 2022, impacted by an oversaturated market and conservative retailer ordering [19] Company Strategy and Development Direction - The company aims to maintain its leadership in the dress footwear market, diversify product offerings, and manage inventory levels effectively [17] - Plans to close the Hong Kong office and wind down the Florsheim Asia Pacific division by the end of 2023 due to ongoing profitability struggles [23][24] - The business model in Australia and New Zealand remains strong, with a focus on maintaining larger wholesale accounts [22] Management's Comments on Operating Environment and Future Outlook - Management noted that the current environment reflects cyclical challenges in the footwear industry, with cautious inventory management from accounts [15] - The company believes that the current inventory situation is manageable due to strong gross margins and a return to predictable sales cycles [18] - Future performance for BOGS will depend on external factors such as weather conditions, with adjusted inventory plans in place [20] Other Important Information - Cash, short-term investments, and marketable securities totaled $29.6 million as of June 30, 2023, with $2.6 million outstanding on a $50 million revolving line of credit [11] - The Board of Directors declared a cash dividend of $0.25 per share, payable on September 29, 2023 [13] Q&A Session Summary - The conference call concluded without any recorded questions or answers, indicating a lack of engagement during the Q&A segment [25][26]