Carried by a 37 percent hike in its Bogs line, Weyco Group Inc. reported third-quarter revenues advanced 5.2 percent to 87.4 million. Bogs gains were driven by higher sales volumes across all major distribution channels and reflected both pent-up demand as well as its success in establishing Bogs in new categories, said Tom Florsheim Jr., chairman and CEO, on a conference call with analysts.
As a result of last years harsh winter, retailers came out of 2013 with low inventory levels, said Florsheim. Our Bogs division is benefited from replenishment of retailer inventory as well as strong consumer interest in the category. We are seeing robust sell-throughs across our key trade channels in all segments of our business with a particularly strong performance in the kids market.
In addition, he said Bogs shipped an expanded assortment of womens, kids and mens non-insulated footwear and the consumer response has been very positive. He added, This early success in the evolution of Bogs to more of an outdoor lifestyle brand and a wave from dependence on cold weather bodes well for our future growth.
Among Weycos other brands, Stacy Adams revenues were up 10 percent for the quarter, with strong sales in the modern dress shoe category. Nunn Bush and Florsheim net sales were down 12 percent and 9 percent, respectively, for the quarter.
Overall sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, were $68.1 million, up 5.1 percent. Operating income in the domestic wholesale segment were up 4.9 percent to $7.4 million. Wholesale gross margins were reduced to 31.7 percent compared to 32.6 percent in the third quarter of 2013, driven by the impact of the weakening Canadian dollar on its Canadian business.
Looking ahead, Florsheim said the fourth quarter is off to a solid start, led by Bogs. Overall inventories are up 20 percent versus the year-ago period to support expected gains in Bogs.
Last year, with the polar vortex, we experienced throughout much of the country, we ran short on Bogs product, said Florsheim. This year, we have supplemented our inventory and core product to make sure that we can take advantage of the upside or cold winter, but we have put the extra inventory and carry forward type product, so that if the winter is mild, we will not be hurt with obsolete inventory. Overall, our inventories are very clean.
