Weyco Group, Inc. reported sales for the first quarter were $61.0 million, an increase of 4% from 2009 sales of $58.9 million. Net earnings for the quarter were $3.9 million, up from $2.5 million in 2009. Diluted earnings per share were 34 cents per share in 2010 as compared with 22 cents per share in the first quarter of 2009.
Net sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, were $44.7 million for the first quarter of 2010, compared with $46.4 million in 2009. Wholesale sales were $44.1 million in the first quarter of 2010, down from $45.6 million in 2009. Licensing revenues were $580,000 in 2010 and $750,000 in 2009. Wholesale net sales of Stacy Adams footwear were up 6%, while sales of the Nunn Bush and Florsheim brands were down 12% and 3%, respectively. The decrease in sales of Nunn Bush product this quarter was primarily due to lower sales this year in the off-price trade channels.
Net sales in the North American retail segment, which include sales from the Company’s 36 Florsheim retail stores in the United States and its Internet business, were $5.3 million in the first quarter of 2010, compared with $5.2 million in 2009. There were the same number of domestic retail stores in the first quarter of 2010 as in the same period of 2009.
Other net sales, which include the wholesale and retail sales of Florsheim Europe and Florsheim Australia, were $11.1 million in the first quarter of 2010, compared to $7.3 million in 2009. The increase in net sales for these entities resulted mainly from the acquisition of the majority interest in Florsheim Australia on January 23, 2009. Accordingly, the Company’s first quarter 2009 consolidated financial statements only reflected the results of Florsheim Australia from January 23 through March 31, 2009, while 2010 included Florsheim Australia’s operations for the entire first quarter. Additionally, Florsheim Europe’s and Florsheim Australia’s 2010 net sales also benefited from foreign exchange rate changes.
Operating earnings for the first quarter of 2010 were $5.4 million, up from $3.3 million in 2009. As a percent of sales, operating earnings were 8.9% in 2010 and 5.7% in 2009. The increase in earnings from operations was attributable to higher North American wholesale gross earnings this year and increased earnings from our Florsheim Australia business resulting from the additional 23 days of operations included in this year’s results. In the North American wholesale segment, the increased gross earnings were due to higher selling prices on select products, an overall reduction this year in sales to off-price retailers, and cost reductions achieved within our supply chain.
“We are pleased to report improved operating results for the first quarter,” stated Tom Florsheim, Jr., Chairman and CEO of Weyco Group. “We felt positive momentum this quarter, which we hope will continue as we move through the balance of 2010.”
On April 21, 2010, the Company’s Board of Directors declared a quarterly cash dividend of $.16 per share to all shareholders of record on June 1, 2010, payable July 1, 2010. This represents an increase of 7% above the previous quarterly dividend rate of $.15 per share.
