Sign in

You're signed outSign in or to get full access.

WG

WEYCO GROUP INC (WEYS)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 net sales were $68.0M, down 5% year over year; gross margin held at 44.6% while operating income fell 15% and diluted EPS declined to $0.57 as softness in non-athletic footwear persisted and BOGS demand remained subdued .
  • Florsheim rose 7% on new product launches, but declines at Stacy Adams (-7%) and Nunn Bush (-16%) and a 5% drop at BOGS offset gains; retail e-commerce sales fell 12% with fewer promotions, while Australia/South Africa net sales declined 7% (local currency -3%) .
  • A major macro surprise: effective tariff rate on China-sourced goods increased to 161% from 16% in 2024; management temporarily halted U.S. China imports, staged inventory in Canada, and plans price increases beginning Summer 2025, alongside accelerated sourcing diversification .
  • Balance sheet remained strong (cash $71.5M, no revolver debt) and the Board raised the quarterly dividend 4% to $0.27; capex for 2025 guided to $1–$2M, reinforcing liquidity and capital discipline .
  • Near-term stock reaction catalysts: tariff mitigation execution (supplier cost reductions, price hikes, supply chain diversification), BOGS sell-through and weather normalization, and durability of Florsheim share gains amidst cautious discretionary spending .

What Went Well and What Went Wrong

What Went Well

  • Florsheim sales +7% on new products, gaining share in refined hybrid/casual footwear; management remains “bullish” on seamless construction and new spring products like the Boga clog .
  • Gross margins resilient at 44.6% consolidated; retail gross margin improved to 66.6%, and Australia gross margin expanded to 62.7% on higher sales locally .
  • Strong liquidity: cash and equivalents $71.5M, undrawn $40M revolver, dividend increased to $0.27/share; capex guidance trimmed to $1–$2M for 2025 .

What Went Wrong

  • Wholesale softness across Stacy Adams (-7%) and Nunn Bush (-16%) reflecting cautious consumer discretionary spending; BOGS -5% on lower retailer demand .
  • Retail e-commerce revenue down 12% due to reduced promotions (particularly BOGS) versus strong promotional-driven comps last year; retail operating income down 52% to $0.6M .
  • Tariffs represent a material future headwind: effective rate on China-sourced goods now 161%, materially elevating future COGS despite mitigation actions; Q1 results did not yet reflect the impact .

Financial Results

Consolidated trends (last three quarters)

MetricQ3 2024Q4 2024Q1 2025
Net Sales ($USD Millions)$74.3 $80.5 $68.0
Gross Earnings (% of Net Sales)44.3% 47.9% 44.6%
Earnings from Operations ($USD Millions)$10.2 $11.5 $7.0
Net Earnings ($USD Millions)$8.1 $10.0 $5.5
Diluted EPS ($USD)$0.84 $1.04 $0.57

YoY comparison – Q1 2025 vs Q1 2024

MetricQ1 2024Q1 2025
Net Sales ($USD Millions)$71.6 $68.0
Gross Earnings (% of Net Sales)44.7% 44.6%
Earnings from Operations ($USD Millions)$8.3 $7.0
Net Earnings ($USD Millions)$6.7 $5.5
Diluted EPS ($USD)$0.69 $0.57

Segment breakdown – Q1 2025 vs Q1 2024

SegmentQ1 2024 Net Sales ($M)Q1 2025 Net Sales ($M)Gross Margin % (Q1 2024 → Q1 2025)Operating Earnings ($M, Q1 2024 → Q1 2025)YoY Change Commentary
North American Wholesale$56.2 $54.3 39.6% → 39.4% $7.4 → $6.6 Florsheim +7% offset by Stacy Adams -7%, Nunn Bush -16%, BOGS -5%
North American Retail (e-com)$9.8 $8.7 65.3% → 66.6% $1.3 → $0.6 Lower BOGS site sales due to fewer promotions
Florsheim Australia & South Africa$5.5 $5.1 60.2% → 62.7% -$0.4 → -$0.2 Local currency sales -3%; Australia +6% LC; FX headwind

KPIs and balance sheet highlights

KPIQ4 2024Q1 2025
Cash & Equivalents ($USD Thousands)$70,963 $71,546
Inventories ($USD Thousands)$74,012 $68,186
Cash from Operations ($USD Thousands)N/A$4,129
Capital Expenditure ($USD Thousands)N/A$417
Cash Dividend Declared (Per Share)$0.26 (Q4 payable Mar 31, 2025) $0.26 for Q1 statement; Board raised to $0.27 for Q2 payable Jun 30, 2025

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Capital Expenditures ($)FY 2025N/A$1–$2 million New
Pricing ActionsSummer/Fall 2025N/ARaise selling prices beginning Summer 2025 New
Sourcing StrategyNext 12 monthsN/AAccelerate diversification away from China; staged goods in Montreal New
China ImportsNear term (Q2–Q3 2025)N/ATemporary U.S. import pause; covered through part of Q3; staged in Canada New
DividendQ2 2025$0.26 per share $0.27 per share (+4%) Raised
Formal Revenue/EPS GuidanceFY/Q2 2025NoneNone provided Maintained (no guidance)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Tariffs/macroInflation and soft retail; weather muted BOGS; no tariff action yet Early 2025 additional tariffs flagged; pricing review underway Effective tariff rate 161% on China goods; imports paused; pricing to rise Escalating headwind; active mitigation
Supply chain diversificationNot highlightedNot highlightedAggressive re-sourcing (Cambodia/Vietnam/India); staging in Montreal Accelerating
BOGS/weather sensitivityOutdoor boot demand under pressure; warm/dry weather Q4 BOGS -17% on warm/dry weather BOGS -5%; Jan–Feb weather helped sell-through; seamless construction push Gradual improvement potential; product pivot
Brand performanceFlorsheim +1%; Stacy Adams -17%; Nunn Bush -20% Florsheim +22% in Q4; Stacy Adams -8%; Nunn Bush +4% Florsheim +7%; Stacy Adams -7%; Nunn Bush -16% Florsheim consistent strength; legacy brands mixed
E-commerce/promotionsBOGS e-com down; promotional sensitivity Retail gross margin steady; higher ad/freight Retail sales down 12% after reduced promos; margins improved Less promo; healthier margins
Regional (Australia)Same-store +1%; ops breakeven Same-store +11% Q4 Same-store +11% noted; gross margin expansion; smaller loss Improving operations
Liquidity/capital returnsRenewed $40M revolver; special $2 dividend announced Cash strong; dividend maintained Cash $71.5M; quarterly dividend raised to $0.27 Shareholder-friendly, prudent spend
Capex$1–$2M FY24 estimate $1–$2M FY24 actual plan FY25 capex guided $1–$2M Stable low capex

Management Commentary

  • “We started the year facing significant geopolitical and macroeconomic uncertainties… To date, our efforts to minimize the impact of the incremental tariffs have been fruitful… This allows us time… to temporarily halt our China imports… We are confident in our ability to manage tariff-related cost challenges.” — Thomas W. Florsheim, Jr., Chairman & CEO .
  • “We remain very bullish on our innovative seamless construction… lighter and more durable… We are also excited about new spring products like the Boga clog… off to a solid start.” — Thomas W. Florsheim, Jr. .
  • “During the first 3 months of 2025, we generated $4.1 million of cash from operations… paid $2.5 million in dividends and repurchased $700,000 of our common stock… We estimate that 2025 annual capital expenditures will be between $1 million and $2 million.” — Judy Anderson, CFO .

Q&A Highlights

  • Import pause duration and inventory coverage: Management expects coverage “through part of the third quarter,” while continuing manufacturing in China and staging inventory in Montreal to enable rapid U.S. delivery when tariffs subside .
  • Duty mechanics and staging strategy: Canada duty is 19%; if U.S. China tariffs fall (e.g., ~30%), company will use duty drawback to recoup Canadian duty and import to U.S. at prevailing rate; current additional duty is ~145% making direct U.S. import “totally unmanageable” .
  • Supply chain diversification timeline: Expect “radical reorganizing” of supply chain over the next 12 months into Cambodia, Vietnam, India, leveraging prior experience, with fall product flows beginning from new sources .

Estimates Context

  • S&P Global consensus for Q1 2025 appears unavailable for EPS and revenue; the S&P dataset returned actuals but no consensus values or estimate counts, indicating limited coverage for WEYS this quarter. As such, we cannot assess beats/misses versus Wall Street consensus for Q1 2025 [Values retrieved from S&P Global]*.
MetricQ1 2025 ConsensusNotes
Primary EPS Consensus MeanN/A*No active consensus returned [Values retrieved from S&P Global]*
Revenue Consensus MeanN/A*No active consensus returned; actual reported $68.0M [Values retrieved from S&P Global]*
EBITDA Consensus MeanN/A*No active consensus returned; actual reported EBITDA implied by operating results; no non-GAAP provided [Values retrieved from S&P Global]*

Key Takeaways for Investors

  • Tariff shock is the dominant risk; management’s multi-pronged mitigation (supplier cost concessions, price increases starting Summer 2025, supply chain diversification, Canada staging) is the central execution focus for the next 1–3 quarters .
  • Florsheim’s consistent outperformance and share gains provide ballast; monitoring whether Stacy Adams and Nunn Bush stabilize as retailers rebalance non-athletic footwear spend is key to margin resilience .
  • BOGS trajectory hinges on normalized weather and the seamless-construction pivot into less weather-sensitive channels (farm/ag, lifestyle); sequential improvement potential exists if sell-through and at-once orders recover .
  • Liquidity and capital returns remain attractive (cash $71.5M, dividend lifted to $0.27), with low capex ($1–$2M) supporting optionality for inventory, pricing investments, and opportunistic buybacks .
  • Near-term trading lens: headlines around tariff policy shifts, evidence of price realization without undue demand destruction, and updates on re-sourcing timelines likely drive stock moves more than near-term volume growth .
  • Medium-term thesis: If mitigation and diversification are executed effectively, WEYS can preserve margins through a turbulent macro, with Florsheim-led brand mix and healthier e-commerce profitability providing structural support .
  • Watch for Q2/Q3 inventory cadence and gross margin prints as the first real tests of tariff mitigation and price increases, alongside weather-linked BOGS demand signals .
Notes: All financial and operational figures and quotes are sourced from company filings and press releases/transcripts as cited. *Values retrieved from S&P Global.