Weyco Group Inc. reported net sales for the first quarter ended March 31 of $74.1 million, up 7 percent compared to first quarter 2018 net sales of $69.5 million.
Earnings from operations were $5.1 million in the first quarter of 2019, an increase of 44 percent compared to $3.6 million in the first quarter of 2018.
Net earnings attributable to the company rose 33 percent to $4 million in the first quarter of 2019, from $3 million in last year’s first quarter. Diluted earnings per share were 40 cents per share in the first quarter of 2019, up from 29 cents per share in the first quarter of 2018.
Net sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, were $59.5 million in the first quarter of 2019, up 11 percent compared to $53.8 million in the first quarter of 2018. Within the wholesale segment, Florsheim and Stacy Adams first quarter net sales rose 25 percent and 8 percent, respectively, due to sales volume increases across the majority of distribution channels.
Bogs net sales were up 23 percent for the quarter, due primarily to higher sales to outdoor and online retailers. These increases were partially offset by lower sales of the Nunn Bush brand. Nunn Bush sales were down 6 percent for the quarter, mainly with department stores. Licensing revenues were $707,000 in the first quarter of 2019 and $793,000 in last year’s first quarter.
Gross earnings for the North American wholesale segment were 34.3 percent of net sales in the first quarter of 2019, compared to 33.1 percent of net sales in last year’s first quarter. Earnings from operations for the wholesale segment increased 54 percent to $5.2 million in the first quarter of 2019, from $3.4 million in the first quarter of 2018, due mainly to higher sales.
Net sales in the North American retail segment, which include sales from the company’s Florsheim retail stores and its e-commerce businesses in the United States, were $5.6 million in the first quarter of 2019, up 13 percent compared to $4.9 million in last year’s first quarter. Same store sales (which include U.S. e-commerce sales) were up 13 percent for the quarter, driven by higher sales through the company’s websites. Retail earnings from operations rose to $483,000 this quarter, from $206,000 in last year’s first quarter, due to higher online sales volumes.
Other net sales, which include the wholesale and retail sales of Florsheim Australia and Florsheim Europe, were $9.1 million in the first quarter of 2019, down 16 percent compared to $10.8 million in the first quarter of 2018. This decrease was primarily due to a 13 percent decline in net sales at Florsheim Australia, caused mainly by the translation of the weaker Australian currency into U.S. dollars.
Florsheim Australia’s net sales in local currency were down 4 percent for the quarter, with lower sales in both its retail and wholesale businesses, as a result of the challenging retail environment. Collectively, Florsheim Australia and Florsheim Europe had operating losses totaling $543,000 in the first quarter of 2019, compared to operating losses of $29,000 in the first quarter of 2018. The decline between years was mainly due to lower sales at Florsheim Australia.
“We are excited to begin 2019 with strong first quarter results” stated Thomas Florsheim Jr., the company’s chairman and CEO.
“These results were largely due to sales and earnings growth within our North American wholesale business, led by our Florsheim brand. Stacy Adams and Bogs also posted solid results for the quarter, contributing to our overall success in this segment. At retail, our profitability improved due to the growth of our e-commerce businesses. The Australian market remains difficult, but our new president of the region has settled in quickly, and we are very focused on addressing the challenges of those markets.”
On May 7, 2019, the company’s board of directors declared a cash dividend of $0.24 per share to all shareholders of record on May 31, 2019, payable June 28, 2019. This represents an increase of 4 percent above the previous quarterly dividend rate of 23 cents.
