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WG

WEYCO GROUP INC (WEYS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 net sales were $73.1M, down 2% year over year but up materially from Q2’s $58.2M; diluted EPS was $0.69 vs $0.84 last year as gross margin compressed to 40.7% vs 44.3% due to incremental tariffs .
  • Wholesale revenue fell 2% to $60.2M on 7% lower volumes, offset by July 1 price increases; Florsheim grew 8% while BOGS declined 17%, Stacy Adams -5%, and Nunn Bush +1% .
  • Management declared a special cash dividend of $2.00 per share and a regular quarterly dividend of $0.27 per share, citing excess cash and balance sheet strength as catalysts .
  • Pricing issue with a large customer led to order cancellations in Q3 but was resolved and “not expected to significantly impact the fourth quarter,” providing a potential near-term tailwind .
  • No Wall Street consensus estimates were available via S&P Global for EPS or revenue; result comparisons to estimates are therefore not determinable at this time (S&P Global), which may limit immediate “beat/miss” trading cues.*

What Went Well and What Went Wrong

What Went Well

  • Florsheim was the standout brand, up 8% in Q3 as it gained shelf space in dress and “refined casual” categories; management emphasized Florsheim’s positioning “as a bridged brand that offers premium quality at a reasonable price” .
  • Operating discipline: wholesale SG&A fell to $14.0M from $15.1M, lowering SG&A as a % of sales to 23% from 25% despite revenue softness .
  • Capital returns and balance sheet strength: special $2.00 dividend plus $0.27 quarterly declared; cash and equivalents ended Q3 at $72.9M with no revolver debt, supporting continued flexibility .

What Went Wrong

  • Gross margin compressed to 40.7% from 44.3%, and wholesale GM% fell to 35.7% from 40.1% due to incremental tariffs; operating income declined 21% YoY to $8.1M .
  • BOGS sales -17% amid category oversaturation and mild winters; Stacy Adams -5% reflecting pressure in value-oriented segments with more price-sensitive consumers .
  • E-commerce headwinds: retail segment sales -4% to $7.0M; management cited increased price sensitivity and promotional gaps versus wholesale partners’ websites .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Net Sales ($USD Millions)$74.329 $58.221 $73.121
Diluted EPS ($)$0.84 $0.24 $0.69
Gross Margin (%)44.3% 43.3% 40.7%
Operating Income (EBIT) ($USD Millions)$10.163 $3.893 $8.055
EBIT Margin (%)13.7% (derived from )6.7% (derived from )11.0% (derived from )

Segment Revenue and Profitability

SegmentQ3 2024Q2 2025Q3 2025
Wholesale Net Sales ($M)$61.1 $45.6 $60.2
Wholesale GM%40.1% 37.6% 35.7%
Wholesale Operating Income ($M)$9.4 $4.1 $7.5
Retail Net Sales ($M)$7.2 $6.8 $7.0
Retail GM%66.9% 66.6% 66.4%
Retail Operating Income ($M)$0.8 $0.1 $0.6
Florsheim Australia Net Sales ($M)$6.0 $5.8 $6.0
Australia GM%59.2% 60.9% 61.0%
Australia Operating Income ($M)$0.0 (breakeven) -$0.2 -$0.1

Key KPIs and Balance Sheet

KPIFY 2024Q2 2025Q3 2025
Cash & Equivalents ($M)$70.963 $77.430 $72.915
Accounts Receivable, net ($M)$37.464 $32.022 $46.444
Inventories ($M)$74.012 $71.258 $67.178
Revolver Debt Outstanding$0 (FY context)$0 $0

Brand Performance (Q3 2025 vs Q3 2024)

BrandYoY Change
Florsheim+8%
Nunn Bush+1%
Stacy Adams-5%
BOGS-17%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Capital ExpendituresFY 2025N/A$1–$3M (management estimate) New
Quarterly DividendQ4 2025 declaration$0.26/share (prior run-rate) $0.27/share declared Nov 4, 2025; payable Jan 9, 2026 Raised (vs prior)
Special DividendQ4 2025 declarationNone$2.00/share declared; payable Jan 9, 2026 New
Revenue/Margins/Tax RateN/AN/ANo formal guidance providedMaintained (no guidance)
Sourcing/TariffsNear‑termTariff regime evolvingChina tariff 30% in Q3; reevaluation on/before Nov 10, 2025; tentative framework contemplates reductions Environment evolving (not company guidance)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
Tariffs/MacroChina effective tariff surged to 161%; planned price increases; accelerated sourcing diversification China tariff temporarily 30% (May–Aug); ongoing mitigation (inventory pre-buys, cost reductions, sourcing shift); SG&A leverage challenged China tariff at 30% in Q3; margin erosion largely attributable to tariffs; continued sourcing diversification; reevaluation pending Nov 10 with tentative framework for reductions Persistent headwind; potential relief ahead
Pricing & Market SharePlanned summer price increases to offset tariff costs July 1 price increases implemented; cautious consumer and retailers Price increases helped offset volume decline; conservative approach to maintain market share Balancing price with share retention
Brand MixFlorsheim +7% led Q1; others down All major brands down; consumer softness Florsheim +8%; Nunn Bush +1%; Stacy Adams -5%; BOGS -17% Mix improving via Florsheim; BOGS remains weak
Retail/E‑commerceRecord Q1’24 comps; Q1’25 retail -12% on reduced promo Retail -11%; lower website sales Retail -4%; price sensitivity and pricing gaps vs wholesale partners’ sites Cautious consumer; channel pricing dynamics
Regional (Australia)Local currency net sales -3%; profitability improving Net sales -4% (-2% LC); op loss $0.2M Net sales flat (+2% LC); op loss $0.1M; same-store sales up Gradual improvement; still breakeven/near loss
Portfolio Actions——Wind down Forsake brand (non-material impact) Focus on core brands

Management Commentary

  • “Sales for the quarter declined modestly… Despite price increases, our margins compressed due to the costly imposition of incremental tariffs… We remain confident that these efforts will strengthen our resilience and position the company for sustained profitability.” — Thomas W. Florsheim, Jr., Chairman & CEO .
  • “Our brands, especially our legacy business, performed well… Florsheim was the standout brand, with sales up 8% for the quarter… We continue to diversify our factory base to reduce our manufacturing concentration in China.” — Thomas W. Florsheim, Jr. .
  • “At September 30, 2025, our cash and marketable securities totaled $78.5 million, and we had no debt outstanding… Our Board declared a quarterly cash dividend of $0.27 and a special cash dividend of $2 per share.” — Judy Anderson, CFO .
  • “We made the strategic decision to wind down operations of the Forsake brand due to a sustained lack of growth and profitability.” — Thomas W. Florsheim, Jr. .

Q&A Highlights

  • Margin erosion attribution: Management stated margin deterioration was “100%” attributable to tariffs; price increases (+10%) did not fully offset 30% China duties, with additional volatility in other countries (e.g., India) .
  • Consumer stratification: Higher‑income customers skew to Florsheim strength; value-oriented segments (Stacy Adams, Nunn Bush) are seeing more drag amid lower-middle income pressures .
  • Pricing issue resolution: The Q3 pricing issue with a large wholesale customer was resolved and is not expected to significantly impact Q4 .

Estimates Context

  • S&P Global consensus estimates for Q3 2025 EPS and revenue were unavailable at time of analysis; the estimates feed returned actuals only without consensus means, preventing a beat/miss assessment (Values retrieved from S&P Global).*
MetricQ3 2025 ActualQ3 2025 ConsensusDelta
Revenue ($M)$73.121 N/A*N/A
Diluted EPS ($)$0.69 N/A*N/A

Note: Consensus estimates unavailable via S&P Global at time of analysis.*

Key Takeaways for Investors

  • Tariffs remain the primary earnings swing factor; management indicated gross margin erosion was essentially entirely tariff-driven, with potential relief if the China tariff re‑evaluation results in reductions .
  • Brand mix resilience: Florsheim’s growth (+8%) and Nunn Bush’s value positioning (+1%) offset some pressure from Stacy Adams and BOGS, suggesting continued focus on dress/refined casual and innovation in weather‑agnostic categories .
  • Sequential recovery: Sales and operating income rebounded sharply vs Q2, aided by pricing and normalized order flows; watch for Q4 normalization post customer pricing resolution .
  • Capital returns underline balance sheet strength; the $2.00 special dividend plus regular dividend highlights cash generation and limited leverage, providing downside support .
  • E‑commerce pricing dynamics could weigh on retail segment margins near term as promotional gaps vs wholesale partners persist; harmonizing pricing may improve conversion .
  • Australia remains a work‑in‑progress with improving local‑currency trends and better same‑store sales, but still near breakeven; incremental profitability would add to consolidated margins .
  • With no consensus estimates available, near‑term stock reaction may hinge on narrative shifts (tariff outlook, brand momentum, special dividend), making updates on tariff policy and Q4 demand the key catalysts .