WEYS - NASDAQ
Weyco Group, Inc.
WEYS·NASDAQ
$35.37
-0.87%Consumer CyclicalApparel - Footwear & Accessories
Weyco Group, Inc. designs and distributes footwear for men, women, and children. It operates through two segments, North American Wholesale Operations and North American Retail Operations. The company offers mid-priced leather dress shoes and casual footwear of man-made materials or leather; and outdoor boots, shoes, and sandals under the Florsheim, Nunn Bush, Stacy Adams, BOGS, and Rafters brand names. It is also involved in the wholesale of its products to approximately 10,000 footwear, department, and specialty stores, as well as e-commerce retailers. As of December 31, 2021, the company had four brick and mortar retail stores in the United States. In addition, it has licensing agreements with third parties, who sell its branded apparel, accessories, and specialty footwear. It serves in the United States, Canada, Europe, Australia, Asia, and South Africa. The company was formerly known as Weyenberg Shoe Manufacturing Company and changed its name to Weyco Group, Inc. in April 1990. Weyco Group, Inc. was incorporated in 1906 and is based in Milwaukee, Wisconsin.
At a Glance
Live SnapshotMarket Cap$337.15M
EPS2.4400
P/E Ratio14.50
Earnings Date08/04/2026
Earnings Call Transcript
WEYS • 2026 • Q1
Operator
Good day and thank you for standing by. Welcome to the Weyco Group first quarter 2026 earnings release conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a Q&A session. Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your first speaker today, Judy Anderson, Chief Financial Officer. Please go ahead.
Judy Anderson
Thank you. Good morning, and welcome to Weyco Group's conference call to discuss first quarter 2026 results. On the call with me today are Tom Florsheim Jr., Chairman and Chief Executive Officer, and John Florsheim, President and Chief Operating Officer. Before we begin to discuss the results for the quarter, I will read a brief cautionary statement. During this call, we may make projections or other forward-looking statements regarding our current expectations concerning future events and the future financial performance of the company. We wish to caution you that these statements are just predictions, and that actual events or results may differ materially. We refer you to the section entitled Risk Factors in our most recent annual report on Form 10-K, which provides a discussion of important factors and risks that could cause our actual results to differ materially from our projections.
Judy Anderson
These risk factors are incorporated herein by reference. They include, in part, the uncertain impact of U.S. trade and tariff policies, which remain highly dynamic and unpredictable, the impact of inflation on our costs and consumer demand for our products, increased interest rates, and other macroeconomic factors that may cause a slowdown or contraction in the U.S. or Australian economies. Overall net sales for the first quarter of 2026 were $68 million, flat compared to the first quarter of 2025. Consolidated gross earnings were 44.2% of net sales compared to 44.6% of net sales last year. Earnings from operations were $7.5 million for the quarter, up 7% from $7 million in 2025.
Judy Anderson
Net earnings totaled $6.1 million, up 10% from $5.5 million last year. Diluted earnings per share were $0.64 per share in 2026, up from $0.57 per share in the prior year. Net sales in our North American wholesale segment totaled $53.6 million for the quarter, down 1% from $54.3 million last year. Florsheim sales were up, but the increase was more than offset by lower sales of the Stacy Adams and Bogs brands. Nunn Bush sales were flat for the quarter. Wholesale gross earnings as a percent of net sales were 38.7% and 39.4% in the first quarters of 2026 and 2025, respectively.
Judy Anderson
Gross margins continued to be negatively impacted by incremental tariffs, partially offset by selling price increases instituted in the second half of last year. Wholesale selling and administrative expenses totaled $13.8 million, or 26% of net sales, versus $14.8 million, or 27% of net sales last year. The decrease in 2026 was largely due to lower employee costs. Wholesale operating earnings totaled $7 million for the quarter, up 5% from $6.6 million in 2025, mainly due to lower selling and administrative expenses. Net sales in our retail segment totaled $8.8 million for the quarter, up 2% from $8.7 million in 2025 due to increased sales of our e-commerce businesses.
Judy Anderson
Retail gross earnings as a percent of net sales were 66.1% and 66.6% in the first quarters of 2026 and 2025, respectively. Retail operating earnings totaled $800,000 for the quarter and $600,000 last year. Our other operations consist of our retail and wholesale businesses in Australia and South Africa, collectively referred to as Florsheim Australia. Net sales of Florsheim Australia were $5.6 million in 2026, up 10% from $5.1 million in 2025. The increase was due to the appreciation of the Australian dollar relative to the US dollar as Florsheim Australia's net sales in local currency were flat for the quarter.
Judy Anderson
Florsheim Australia's gross earnings as a percent of net sales were 62.9% and 62.7% in the first quarters of 2026 and 2025, respectively, and its quarterly operating losses totaled $200,000 in both periods. In February of 2025, the U.S. imposed reciprocal and retaliatory tariffs on certain imported goods under the International Emergency Economic Powers Act, also known as IEEPA. We paid a total of approximately $19.8 million in IEEPA tariffs in 2025 and the first quarter of 2026. The IEEPA tariffs increased the cost of our products by 19% and to 50%, resulting in gross margin compression.
Judy Anderson
On February 20, 2026, the U.S. Supreme Court ruled that IEEPA had authorized the president to impose tariffs, declaring the IEEPA tariffs invalid. In April of 2026, U.S. Customs and Border Protection, or CBP, commenced a phased process to accept claims for potential refunds of IEEPA tariffs previously paid. The refund process formally opened on April 20, 2026. On that date, we submitted claims covering our phase 1 entries totaling $18.6 million. The timing for submitting claims related to our phase 2 entries, totaling $1.2 million, has not yet been established. The timing and amount of any recoveries remains uncertain and subject to execution by the CBP.
Judy Anderson
Following the Supreme Court's ruling, the president announced the implementation of a new across-the-board tariff under a separate statutory authority currently set at 10%, although the scope and rate remain subject to change. U.S. trade policies continue to evolve and remain unpredictable, creating near-term gross margin uncertainty. We have mitigation strategies in place and will continue to adjust as appropriate in response to future policy developments. At December 31, 2026, our cash and marketable securities totaled $93.9 million, and we had no outstanding debt on our $40 million revolving line of credit. During the first 3 months of 2026, we generated $17.4 million in cash from operations and used funds to pay $23.9 million in dividends. We also had $600,000 of capital expenditures.
Operator
Thank you. At this time, again, we will conduct the Q&A session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again, and please stand by while we compile Q&A questions. Okay. At this time, we have David Wright of Henry Investment Trust. Your line is now open.
Judy Anderson
Good morning.
David Wright
Commend you for a surprisingly good quarter given the environment and thanks for raising the dividend and also commend you for some really outstanding clear disclosure about your tariff picture. That's appreciated. Judy, a question. If you receive tariff refunds, what is the tax treatment?
David Wright
Right. You had a deduction when you paid the tariff, and you have income when you get a refund?
Judy Anderson
That is correct. It was part of our cost of sales last year. We'll get a refund this year. It'll be a credit in our cost of sales and have to pay taxes on it.
David Wright
Okay. Last one would be on the I mean, you took $1 million out of SG&A year-over-year. That's a lot. You highlighted lower employee costs. Was that staff reduction or less compensation? How was that accomplished?
Judy Anderson
The lower employee cost was a combination. It was really lower employee benefit costs and it was a combination of a few different categories. For example, last year, we did not give out annual bonuses in the first quarter, therefore we had less FICA expense. You know, it's just something as kind of mundane as that. There was a combination of a few things. Our health insurance costs were down. Just FICA cost was down. It was a few things that added up in the first quarter.
John Florsheim
Well, plus temporary, in the warehouse, our overall costs are down just because you use less, fewer taps, I believe. Yeah.
David Wright
Your workforce flexes a little depending on your inventory level?
John Florsheim
Depending upon our needs, especially in the distribution center. We were able to operate more efficiently, this last quarter versus a year ago.
Operator
Okay, thank you. At this time, we're not showing any further questions. If anyone has a last question, please hit star one one on your telephone. Okay. This concludes the Q&A session. I would like now to turn it back to Judy Anderson for closing remarks.
Judy Anderson
Thank you. Just wanted to wish everybody a great day and a good rest of your week, and we'll talk to you next quarter. Thank you.
Transcript from May 6, 2026
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