WEYCO GROUP INC SEC 10-Q Report

WEYCO GROUP INC, a leading footwear company known for its diverse range of brands including Florsheim and BOGS, has released its Form 10-Q report for the third quarter of 2025. The report highlights the company's financial performance and operational activities amidst a challenging economic environment marked by tariff uncertainties and fluctuating consumer demand. Financial Highlights Net Sales: $73.1 million, down 2% compared to $74.3 million in the third quarter of 2024, primarily due to order cancellations with a large wholesale customer.Gross Earnings: $29.8 million, representing 40.7% of net sales compared to 44.3% in the third quarter of 2024, impacted by higher costs from incremental tariffs.Earnings from Operations: $8.1 million, down 21% from $10.2 million in the third quarter of 2024, mainly due to lower sales volumes and gross margins.Net Earnings: $6.6 million, or $0.69 per diluted share, down 18% from $8.1 million, or $0.84 per diluted share, in the third quarter of 2024.Net Sales (Nine Months Ended September 30): $199.4 million, a decrease of 5% from $209.8 million in 2024, primarily due to softer demand in the first half of the year.Gross Earnings (Nine Months Ended September 30): $85.4 million, representing 42.8% of net sales compared to 44.3% in the same period of 2024.Earnings from Operations (Nine Months Ended September 30): $19.0 million, down 24% from $25.1 million in 2024, mainly due to lower sales volumes and gross margins.Net Earnings (Nine Months Ended September 30): $14.4 million, or $1.50 per diluted share, down from $20.3 million, or $2.12 per diluted share, last year. Business Highlights Revenue Segments: The North American Wholesale segment experienced a 2% decline in net sales for the third quarter of 2025 compared to the same period in 2024, with a 4% decrease for the nine-month period. The Retail segment saw a 4% decrease in net sales for the quarter and a 9% decrease for the nine-month period. The 'Other' category, primarily consisting of operations in Australia and South Africa, reported flat net sales for the quarter and a 4% decrease for the nine-month period.Geographical Performance: Florsheim Australia reported flat net sales in U.S. dollars for the third quarter of 2025, but a 2% increase in local currency. For the nine-month period, net sales in local currency were down 1%, primarily due to the closure of operations in the Asia Pacific region.Sales Units: Wholesale sales volumes were down 7% for the third quarter of 2025, primarily due to reduced business with a large customer who did not adopt the new pricing structure in a timely manner. This affected all major brands' sales performance.New Product Launches: The company focused on expanding Florsheim's presence in hybrid footwear and dress sneakers, which contributed to an 8% increase in Florsheim sales for the quarter.Future Outlook: The company is navigating uncertainties in the economic environment, particularly with the unsettled tariff situation. They are committed to diversifying their factory base to reduce manufacturing concentration in China and are implementing strategies to mitigate the impact of tariffs, such as shifting sourcing and optimizing pricing structures.Operational Challenges: The BOGS brand faced a 17% decline in sales for the quarter due to an oversaturated outdoor footwear market and mild winters. The company is focusing on innovation and diversifying away from winter-weather dependence.Strategic Decisions: The company decided to wind down operations of the Forsake brand due to its lack of growth and profitability, as part of an effort to optimize the brand portfolio.Retail Environment: The Retail segment faced challenges with increased price sensitivity among consumers and competition from wholesale partners' e-commerce sites, which often promote brands more aggressively than the company's own sites.SEC Filing: WEYCO GROUP INC [ WEYS ] - 10-Q - Nov. 07, 2025