Weyco Group Inc. reported North American wholesale sales at Bogs declined 35 percent in the second quarter ended June 30 as the company’s overall sales slid 10 percent. Weyco’s overall earnings rose 8 percent.

Second Quarter 2023
Consolidated net sales were $67.0 million, down 10 percent compared to record second-quarter sales of $74.4 million in 2022. Consolidated gross earnings increased to 43.3 percent of net sales compared to 40.0 percent of net sales in last year’s second quarter, due mainly to higher gross margins in its North American wholesale segment. Earnings from operations rose 18 percent to $6.7 million, from $5.7 million in the second quarter of 2022. Net earnings were a second-quarter record of $4.9 million, or $0.50 per diluted share, up 8 percent over its previous record of $4.5 million, or $0.47 per diluted share, last year.

North American Wholesale Segment
Net sales in its wholesale segment were $51.5 million, down 13 percent compared to record sales of $59.0 million in the second quarter of 2022. Sales were lower across all its major brands due to reduced demand in 2023 following record growth in 2022. Net sales of the Stacy Adams, Florsheim, Bogs, and Nunn Bush brands declined 17 percent, 11 percent, 35 percent, and 1 percent, respectively, for the quarter.

Wholesale gross earnings were 37.0 percent of net sales in the second quarter of 2023 compared to 33.7 percent of net sales last year. Gross margins improved as a result of selling price increases implemented in 2022 to address higher costs. Wholesale selling and administrative expenses totaled $13.7 million for the quarter, compared to $15.7 million last year, which constituted 27 percent of net sales in both periods. Wholesale operating earnings rose to $5.4 million for the quarter, up 28 percent compared to $4.2 million last year.

North American Retail Segment
Net sales in its retail segment were a second-quarter record of $7.6 million, up 3 percent compared to its previous record of $7.4 million in 2022. The increase was primarily due to higher sales volumes across all its e-commerce websites.

Retail gross earnings as a percent of net sales were 66.2 percent and 67.4 percent in the second quarters of 2023 and 2022, respectively. Selling and administrative expenses for the retail segment totaled $4.0 million for the quarter compared to $3.9 million last year. As a percent of net sales, retail selling and administrative expenses were 52 percent in both 2023 and 2022. Retail operating earnings were $1.1 million in both the second quarters of 2023 and 2022.

Other
Weyco’s other operations consist of its retail and wholesale businesses in Australia, South Africa, and Asia Pacific (collectively, Florsheim Australia). Net sales of Florsheim Australia totaled $7.9 million, down slightly compared to $8.0 million in the second quarter of 2022. In local currency, Florsheim Australia’s net sales were up 7 percent for the quarter, with sales up in both its retail and wholesale businesses. The decrease in sales in U.S. dollars was due to the weakening of the Australian dollar relative to the U.S. dollar compared to last year.

Florsheim Australia’s gross earnings were 62.4 percent of net sales compared to 61.3 percent of net sales in last year’s second quarter. Its operating earnings were $276,000 for the quarter versus $365,000 last year. This decrease was primarily due to lower operating earnings in Asia.

“Sales eased during the second quarter, after 2022 and the first quarter of 2023 exhibited record-breaking growth,” stated Thomas W. Florsheim, Jr., chairman and CEO. “Our results reflect what is happening in the larger retail environment, as retailers are well-stocked with inventory. Despite the reduction in sales, we achieved record bottom-line earnings for the quarter, as efforts to improve gross margins and contain selling and administrative expenses continued to pay off. As we move into the second half of the year, we face headwinds going up against last year’s record third and fourth-quarter results, which were lifted by pipeline fill and strong consumer demand. We remain focused on investing in and developing our core brands for success over the long run.”

Photo courtesy Bogs