WEYCO GROUP INC Q3 FY2025 earnings call

Bullet points:

• Overall company wholesale sales down 2% in dollars and 7% in unit volume in Q3; raised prices 10% on July 1 to offset tariff increases.
• Brands performed well in difficult market, Florsheim sales up 8%, Nunn Bush up 1%, Stacy Adams down 5%, BOGS down 17%; closed Forsake brand.
• Retail segment net sales down 4% driven by e-commerce decline; price sensitivity from consumers and pricing gap with wholesale partners.
• Florsheim Australia net sales flat, up 2% in local currency; still working on profitability.
• Overall inventory $67.2 million as of Sep 30, 2025, good level for Q4.
• Board declared quarterly cash dividend $0.27 per share and special cash dividend $2 per share.

Net sales for the third quarter of 2025 were $73.1 million. North American Wholesale segment: net sales totaled $60.2 million, down 2% from last year; sales volumes down 7%, but price increase on July 1 mitigated volume decline. Wholesale gross earnings as % of net sales was 35.7% in 2025 vs 40.1% in 2024. North American Retail segment: net sales $7 million, down 4% from last year. Other operations (Florsheim Australia): net sales $6 million, flat vs last year, up 2% in local currency; gross earnings as % of net sales 61% in 2025 vs 59.2% in 2024.

Bullet points:

• Estimate 2025 annual capital expenditures between $1 million and $3 million.
• Board declared quarterly cash dividend of $0.27 per share and special cash dividend of $2 per share.

Bullet points:

• Uncertain impact of U.S. trade and tariff policies, tariffs on goods from China and other countries remain fluid and unpredictable, affecting gross margins.
• Impact of inflation on costs and consumer demand, increased interest rates and other macroeconomic factors may cause slowdown or contraction in U.S. or Australian economy.

Q: Can you provide sense of margin deterioration attributable to tariffs?

A: Tariffs are 100% of margin erosion; raised prices 10% but not enough to cover incremental tariffs from China and other countries, done intentionally to maintain market share.

Q: Sense of customer base and regions/demographics remaining stronger?

A: Florsheim attracts slightly higher income customers and is strong; Stacy Adams and Nunn Bush are more value customers, seeing drag on those brands