WEYCO GROUP INC Q4 FY2025 earnings call

• Overall company sales down 5% in Q4 and full year 2025. - Faced tariff challenges, but production team navigated to deliver nearly 100% of fall shipments on time once tariffs reduced. - Floorshine brand achieved record wholesale sales in 2025. - Porsche division had 1% Q4 decrease but 2% year increase, with $92M sales in 2025. - Nunn-Bush business declined, with focus on value engineering. - Stacey Adams sales declined due to fashion dress shoe market challenges. - Boggs business difficult, but optimistic about fall 2026 bookings. - Florsheim Australia net sales increased in Q4 and local currency for the year. - Inventory at healthy level as of Dec 31, 2025. - Gross margins down due to incremental tariffs, with plan to adjust margin and pricing strategy

Fourth quarter 2025: Overall net sales $76.8M, down 5% y-o-y. North American wholesale: Net sales $56.7M, down 6% y-o-y; gross earnings % of net sales 37.2% vs 42.4% in 2024. Retail: Net sales $13.3M, down 5% y-o-y; operating earnings $1.9M vs $2.5M in 2024. Florsheim Australia: Net sales $6.8M, up 12% y-o-y; operating losses $100,000 vs operating earnings $100,000 in 2024. Full year 2025: Consolidated net sales $276M, down 5% y-o-y. North American wholesale: Net sales $217M, down 5% y-o-y; wholesale operating earnings $26.6M, down 16% y-o-y. North American retail: Net sales $35.7M, down 8% y-o-y; retail operating earnings $3.3M vs $5.3M in 2024. Florsheim Australia: Net sales $23.7M, flat y-o-y; operating losses $700,000 vs $200,000 in 2024

• Estimates 2026 annual capital expenditures will be between $1 and $3 million. - Board declared first quarter cash dividend of 27 cents per share. - Expect continued cost uncertainty in 2026 due to trade policy changes, with plan to adjust margin and pricing strategy to maintain historical margins

• Uncertain impact of US trade and tariff policies, highly dynamic and unpredictable. - Impact of inflation on costs and consumer demand. - Increased interest rates and other macroeconomic factors may cause slowdown or contraction in US or Australian economies. - US trade policies remain fluid and unpredictable, creating near-term gross margin uncertainty. - Litigation related to tariff refunds could be tied up, affecting recovery of incremental tariffs

Q: How much of the $16 million in incremental tariffs was recovered in terms of price increases?

A: Tariffs from different countries varied a lot. 10% price increase only recovered a small percentage of the tariff impact.

Q: How much are you looking to retrieve with the lawsuit for tariff refunds?

A: Hoping to retrieve the whole $16 million.

Q: What percentage of cost of goods sold was imported from China last year?

A: About 65 to 70%.

Q: Color on increase in sales reserves for e-commerce business?

A: Standard adjustment in Q4, less clearance leading to consumers moving to other sites to find deals.

Q: Impact of higher oil prices on vendors?

A: Minimal impact on shoe components, mainly impact on consumer discretionary spending and shipping costs