Weyco Sees Q1 Earnings Growth on Florsheim, Stacy Adams Strength

Weyco Group, Inc. reported that net earnings grew approximately 7% to $5.7 million, or 47 cents per diluted share, for the first quarter ended March 31, up from $5.3 million, 44 cents per diluted share, in the year-ago period. Net sales were $63.9 million, up 8% from $59.3 million in Q1 2006. Sales in the wholesale division, which include wholesale sales and licensing revenues, were $56.6 million compared with $52.3 million in 2006. Wholesale sales were $55.5 million in 2007, up 8% from $51.2 million in 2006. Licensing revenues were $1.1 million in 2007 and 2006.

In the wholesale division, net sales of the company's Florsheim and Stacy Adams brands were up 19% and 10%, respectively, while the Nunn Bush brand was down 4%. The increase at Florsheim was driven by the continued strong sales of its styles at retail, which, in recent years, have been expanded to include more contemporary and casual silhouettes. Additionally, beginning January 1, 2007, the company began selling Florsheim product in Canada, which had previously been distributed by a third party licensee. This added $1.1 million, or approximately 8%, to the Florsheim sales for the quarter. Weyco expects total Florsheim Canadian sales to be approximately $4 to $5 million in 2007. Stacy Adams had increased sales to national shoe chains. Nunn Bush has been performing well at retail, but its first quarter sales were negatively impacted by $1.6 million due to the loss of a significant customer in 2006.

Retail sales were $7.25 million for the first quarter of 2007, up 3.5% from $7.0 million in 2006. This was primarily due to the addition of four new stores since last year. Same-store sales were flat.

Operating earnings were $8.7 million, up 6% from $8.2 million in 2006. Operating earnings as a percent of net sales were 13.6% in 2007 and 13.8% in 2006.

“We are very pleased with our overall first quarter wholesale performance, which resulted in record sales and earnings for the Company,” stated Tom Florsheim, Jr., Chairman and CEO of Weyco Group.

Weyco's Board of Directors declared a quarterly cash dividend on May 1, 2007 of 11 cents per share to all shareholders of record on June 1, 2007, payable July 2, 2007. This represents an increase of 22% above the previous quarterly dividend rate of nine cents. Weyco said this will increase cash dividends paid annually by approximately $900,000.