Weyco Group, Inc. reported sales fell 5 percent in the first quarter ended March 31 to $68 million as growth at the Florsheim brand offset by declines at Bogs, Stacy Adams and Nunn Bush. Earnings were also down, and Weyco warned that the current tariffs on China “will significantly increase its cost of goods sold in future periods.”

Net earnings in the first quarter were down 17 percent to $5.5 million, or 57 cents a share.

Gross margins eroded slightly to 44.6 percent from 44.7 percent a year ago. Earnings from operations reached $7.0 million, down 15 percent compared to $8.3 million a year earlier.

North American Wholesale Segment
Wholesale net sales were $54.3 million for the quarter, down 4 percent compared to $56.2 million in the first quarter of 2024. Florsheim’s first quarter sales were up 7 percent due mainly to new product launches, but this gain was more than offset by lower sales of its other major brands. Stacy Adams and Nunn Bush sales were down 7 percent and 16 percent, respectively, for the quarter, which was said to reflect the current softness in non-athletic footwear at retail, as consumers were cautious with discretionary spending. Bogs’ sales were down 5 percent, which is a result of lower retailer demand.

Wholesale gross earnings as a percent of net sales were 39.4 percent and 39.6 percent in the first quarters of 2025 and 2024, respectively. Wholesale selling and administrative expenses totaled $14.8 million for the quarter and $14.9 million last year. As a percent of net sales, wholesale selling and administrative expenses were flat at 27 percent in 2025 and 2024. Wholesale operating earnings decreased 10 percent to $6.6 million for the quarter, from $7.4 million in 2024, due to lower sales.

North American Retail Segment
Net sales in its retail segment, which were generated mainly by its e-commerce websites, were $8.7 million, down 12 percent from record sales of $9.8 million in 2024. The decrease resulted primarily from lower sales on the Bogs website, due to reduced promotional activities in 2025, compared to strong Bogs’ website sales in the first quarter of last year.

Retail gross earnings as a percent of net sales were 66.6 percent and 65.3 percent in the first quarters of 2025 and 2024, respectively. Retail operating earnings totaled $0.6 million for the quarter, down 52 percent from $1.3 million last year. The decrease was primarily due to lower sales.

Other Operations
Weyco’s other operations historically included its retail and wholesale businesses in Australia, South Africa, and Asia Pacific (collectively, “Florsheim Australia”). The company ceased operations in the Asia Pacific region in 2023 and completed the wind-down of that business in 2024. Accordingly, the first-quarter 2025 results of the “other” category only reflect the operations of Australia and South Africa.

Net sales of Florsheim Australia were $5.1 million, down 7 percent from $5.5 million in the first quarter of 2024. The weaker Australian dollar relative to the U.S. dollar contributed to this decrease. In local currency, Florsheim Australia’s net sales were down 3 percent due mainly to the closing of Asia Pacific, partially offset by higher sales in Australia. Net sales in Australia were up 6 percent in local currency, with higher sales in its wholesale and retail businesses.

Florsheim Australia’s gross earnings as a percent of net sales were 62.7 percent and 60.2 percent in the first quarters of 2025 and 2024, respectively. Florsheim Australia generated operating losses totaling $0.2 million for the quarter and $0.4 million last year. The improvement was due to higher sales in Australia.

Tariffs
Over the last several weeks, the U.S. government enacted a broad range of reciprocal and retaliatory tariffs (“incremental tariffs”) on goods imported into the United States. Including these incremental tariffs, the current effective total tariff rate on goods sourced from China, where the company sources most of its products, is 161 percent, up from 16 percent in 2024. While the incremental tariffs did not impact the first quarter 2025 performance, unless withdrawn, these tariffs will significantly increase the cost of goods sold in future periods.

To mitigate the impact of tariff-cost increases, Weyco said it has negotiated cost reductions with several Chinese suppliers and is planning to raise selling prices beginning in summer 2025. The company has also accelerated efforts to diversify sourcing.

“We started the year facing significant geopolitical and macroeconomic uncertainties, including the evolving tariff and trade policies of the U.S. government, recession concerns, and market turmoil,” stated Thomas W. Florsheim, Chairman and CEO. “To date, our efforts to minimize the impact of the incremental tariffs have been fruitful, as we brought in a large amount of inventory ahead of the tariff effective dates. This allows us time, during this tumultuous period, to temporarily halt our China imports as we evaluate plans to mitigate the anticipated future impact of the tariff-cost increases. Despite the uncertainties we face, we are confident in our ability to manage tariff-related cost challenges. Our history of strong operational execution, particularly in the management of our supply chain and price-setting strategy, underscores our proven ability to withstand a turbulent environment.”

Image courtesy Bogs/Weyco Group, Inc.