Bogs’ Sales Climb 32 Percent In First Quarter

Weyco Group, Inc. reported North American wholesale sales for the Bogs outdoor brand rose 32 percent in the first quarter of 2021, as consumers continue to spend more time outdoors during the pandemic. Bogs also saw strong online sales.

Companywide, net sales were $46.9 million compared to first quarter 2020 net sales of $63.6 million. Earnings from operations increased to $1.6 million from $1.3 million in the first quarter of 2020. Net earnings were $1.3 million compared to $1.2 million in last year’s first quarter. Diluted earnings per share were $0.14 per share versus $0.12 per share in the first quarter of 2020.

Gross earnings were 34.5 percent of net sales compared to 31.8 percent of net sales in last year’s first quarter. Last year’s gross margins were negatively impacted by a 15 percent tariff on certain footwear imported from China beginning in September 2019; the tariff was later reduced to 7.5 percent in February 2020. Gross margins improved in the first quarter of 2021 because the company sold through much of the higher-tariffed inventory during 2020. Selling and administrative expenses were $10.2 million, or 31 percent of net sales, compared to $14.0 million, or 27 percent of net sales, in last year’s first quarter. First-quarter 2021 expenses were reduced by approximately $1.8 million due to government wage subsidies. Additionally, wages and advertising costs were down for the quarter as a result of the company’s cost-cutting measures. Earnings from operations were $1.4 million compared with $2.8 million in the first quarter of 2020. The decrease was due to lower sales, partially offset by higher gross margins and lower selling and administrative expenses.

North American Wholesale Segment
Companywide, sales in the North American Wholesale Segment were $33.4 million compared to $52.7 million in the first quarter of 2020. Last year’s first quarter included approximately two-and-a-half months of sales that occurred before the pandemic struck the U.S. In mid-March 2020 much of the country shut down, which resulted in a sharp drop in sales in the last few weeks of the quarter. First-quarter 2021 sales continue to be impacted by the effects of the ongoing pandemic, resulting in lower demand for dress and dress-casual footwear. The 32 percent gain at Bogs was offset by declines at Florsheim, Nunn Bush and Stacy Adams.

North American Retail Segment
Net sales were $5.6 million compared to $4.8 million in last year’s first quarter. Same-store sales were up 32 percent for the quarter due to a 36 percent increase in e-commerce sales, mainly Bogs, offset by a 5 percent decline in brick-and-mortar same-store sales. The company had four fewer brick-and-mortar stores operating at March 31, 2021, as compared to March 31, 2020. Operating earnings were $756,000 compared to operating losses of $89,000 in last year’s first quarter. The improvement was due to the benefit of closing unprofitable stores and higher earnings from the company’s e-commerce businesses.

Other
Other net sales, which include the wholesale and retail sales of Florsheim Australia and Florsheim Europe, were $7.9 million compared to $6.1 million in the first quarter of 2020. This increase was due to 39 percent sales growth at Florsheim Australia, as compared to the prior year’s first quarter, with sales up in both its wholesale and retail businesses. The stronger Australian dollar relative to the U.S. dollar also contributed to the increase, as Florsheim Australia’s net sales in local currency were up 19 percent for the quarter. Collectively, Florsheim Australia and Florsheim Europe had operating losses totaling $481,000 compared to operating losses of $1.3 million in the first quarter of 2020. The reduction in operating losses was due to improved performance at Florsheim Australia.

“As expected, sales of our legacy brands remained depressed in the first quarter as a result of the ongoing pandemic,” stated Thomas W. Florsheim, Jr., the company’s Chairman and CEO. “However, we are seeing signs of improvement, as orders accelerated within our wholesale business late in the quarter. At retail, our performance was strong due to the growth in e-commerce, and we are also seeing a resurgence in sales overseas, particularly at Florsheim Australia. We look forward to building on this momentum as we move throughout the year.”

Photo courtesy Bogs