Weyco Group Inc. reported Bogs’ second-quarter wholesale sales tumbled 33 percent, but the company predicted sales for the outdoor brand would stabilize in coming quarters.
In a statement, Weyco said Bog’s wholesale decline comes as “outdoor retailers continued to be cautious with orders after a recent period of oversaturation of inventories in the outdoor market. However, retailer inventory levels are starting to normalize, and we believe Bogs demand will improve as we enter the prime selling season for the brand in the back half of the year.”
Wholesale sales for Bogs were down 48 percent in the first quarter and fell 31 percent overall in 2023. The decline in 2023 was also blamed on mild weather throughout the Fall and early Winter, in combination with an inventory glut in the outdoor market. Wholesale sales rose 23 percent for Bogs in 20222.
Overall, Weyco’s sales reached $63.9 million in the second quarter, down 5 percent compared to $67.0 million a year ago.
Overall net sales in the wholesale segment were $50.2 million, down 2 percent from $51.5 million in the second quarter of 2023. Among Weyco’s other brands, Florsheim and Nunn Bush were up 3 percent and 8 percent, respectively, with the increase at Nunn Bush due partly to a timing shift of shipments to a large retailer from third to second quarter. Stacy Adams sales were down 10 percent for the quarter, mainly in the dress-shoe category.
Net sales in Weyco’s retail segment, which were generated mainly by e-commerce websites, were flat at $7.6 million in both the second quarters of 2024 and 2023. Sales increases on the Florsheim and Bogs websites were offset by lower sales on its other brands’ websites this quarter.
Gross margins were 43.9 percent, up from 43.3 percent a year ago. Earnings from operations of $6.7 million were flat with Q2 2023. Net earnings were a record $5.6 million, or 59 cents a share , up 15 percent over a previous record in Q223.
Wholesale gross earnings were 38.2 percent of net sales compared to 37.0 percent of net sales last year. Gross margins improved as a result of lower inventory costs. Wholesale selling and administrative expenses totaled $13.4 million for the quarter compared to $13.7 million last year. As a percent of net sales, wholesale selling and administrative expenses were flat at 27 percent in both 2024 and 2023. Wholesale operating earnings totaled $5.8 million for the quarter, up 8 percent from $5.4 million in 2023, primarily due to the impact of higher gross margins.
Retail gross earnings as a percent of net sales were 67.5 percent and 66.2 percent in the second quarters of 2024 and 2023, respectively. Retail operating earnings were $0.7 million, down from $1.1 million in last year’s second quarter. The decrease was due to higher retail selling and administrative expenses this year, primarily web advertising and freight costs. Web advertising expenses in the second quarter of 2024 increased compared to last year’s second quarter due to the reallocation of certain expenditures historically charged to its wholesale segment that primarily benefit its websites.
“We are seeing signs of recovery within our wholesale business, with two of our major brands posting gains for the second quarter, and all brands’ performance improving relative to the first quarter of 2024,” stated Thomas W. Florsheim, Jr., chairman and CEO. “We are pleased with these results in spite of inflationary pressures that persist, impacting consumer buying. Channel inventories have begun to normalize and, while ordering patterns remain conservative among U.S. retailers, we are anticipating an increase in at-once business in the second half of the year.”
Image courtesy Bogs
