Weyco Group Inc. reported sales at Bogs were down 2 percent in the first quarter. Companywide sales were up 1 percent.
Net sales for the first quarter of 2018 were $69.5 million, up 1 percent compared to first quarter 2017 net sales of $69.1 million. Earnings from operations were $3.6 million in the first quarter of 2018, an increase of 3 percent compared to $3.5 million in the first quarter of 2017.
Net earnings attributable to the company rose 35 percent to $3.0 million in the first quarter of 2018, from $2.2 million in last year’s first quarter. This increase was primarily due to the lower U.S. federal tax rate of 21 percent effective January 1, 2018, compared to 35 percent in 2017, which resulted from the passing of the Tax Cuts and Jobs Act. Diluted earnings per share were $0.29 per share in the first quarter of 2018, compared to $0.21 per share in the first quarter of 2017.
Net sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, were $53.8 million in the first quarter of 2018, up 2 percent compared to $52.9 million in the first quarter of 2017. Within the wholesale segment, net sales of the Florsheim brand were up 21 percent for the quarter, primarily due to higher sales to department stores. This increase was partially offset by lower sales of the Nunn Bush brand. Nunn Bush sales were down 10 percent for the quarter, mainly due to lower sales to department stores and national shoe chains. BOGS sales were down 2 percent and Stacy Adams sales were up 1 percent for the first quarter. Licensing revenues were $793,000 in the first quarter of 2018, and $701,000 in last year’s first quarter.
Gross earnings for the North American wholesale segment were 33.1 percent of net sales in the first quarter of 2018, compared to 30.8 percent of net sales in last year’s first quarter. Earnings from operations for the wholesale segment increased 7 percent to $3.4 million in the first quarter of 2018, from $3.2 million in the first quarter of 2017, mainly due to higher gross margins.
Net sales in the North American retail segment, which includes sales from the company’s Florsheim retail stores and internet business in the United States, were flat at $4.9 million in both the first quarters of 2018 and 2017. Same stores sales (which include U.S. internet sales) were up 6 percent for the quarter, primarily due to higher sales from the company’s websites. Retail earnings from operations increased to $206,000 this quarter, from $43,000 in last year’s first quarter, due mainly to higher operating earnings from the company’s websites.
Other net sales, which include the wholesale and retail sales of Florsheim Australia and Florsheim Europe, were $10.8 million in the first quarter of 2018, down 5 percent compared to $11.3 million in the first quarter of 2017. This decrease was primarily due to lower net sales at Florsheim Australia. Florsheim Australia’s net sales were down 6 percent for the quarter, with lower sales in both retail and wholesale businesses. Collectively, Florsheim Australia and Florsheim Europe had operating losses of $29,000 in the first quarter of 2018, compared to operating earnings of $250,000 in the first quarter of 2017. The decline between years was mainly due to lower sales at Florsheim Australia.
“Given the tough retail environment, we had a good first quarter,” stated Thomas Florsheim, Jr., the company’s Chairman and CEO. “Our earnings increase reflects, in part, the strong performance of our Florsheim brand and improved gross margins in our North American wholesale business; we also benefited from the tax rate cut that went into effect this year.”
On May 3, 2018, the company’s board of directors declared a cash dividend of $0.23 per share to all shareholders of record on May 28, 2018, payable June 29, 2018. This represents an increase of 5 percent above the previous quarterly dividend rate of $0.22.
