Weyco Group, Inc. reported sales declined 2 percent in the fourth quarter ended December 31, to $99.0 million from $101.4 million in the fourth quarter of 2021.

Consolidated gross earnings increased to 46.6 percent of net sales compared to 40.2 percent of net sales in last year’s fourth quarter, due to higher gross margins in its North American wholesale segment. Quarterly operating earnings rose to a record $15.1 million, up 18 percent compared to $12.8 million in the fourth quarter of 2021. Fourth-quarter 2022 net earnings were $10.2 million, or $1.06 per diluted share, compared to $10.3 million, or $1.07 per diluted share, last year.

North American Wholesale Segment
Fourth quarter wholesale net sales totaled $75.5 million in 2022, down 6 percent from $79.9 million in 2021. Last year’s fourth-quarter sales were abnormally high due to supply chain delays which caused some third-quarter orders to ship in the fourth quarter. BOGS and Florsheim’s net sales both declined 14 percent for the quarter, compared to record fourth-quarter sales for the two brands last year. Nunn Bush sales rose 18 percent over last year’s fourth quarter largely due to strong consumer demand. Net sales of the Stacy Adams brand increased 5 percent.

Wholesale gross earnings were 41.3 percent of net sales for the quarter compared to 33.7 percent of net sales in last year’s fourth quarter. Gross margins returned to pre-pandemic levels as a result of selling price increases implemented to address higher costs. Selling and administrative expenses were $20.5 million, or 27 percent of net sales, for the quarter, compared to $17.5 million, or 22 percent of net sales, last year. The increase in 2022 was primarily due to higher advertising and pension expenses. Operating earnings rose to $10.7 million for the quarter, up 14 percent over $9.4 million in last year’s fourth quarter, due mainly to higher gross margins.

North American Retail Segment
Retail net sales were a record $14.3 million, up 6 percent compared to $13.5 million in the fourth quarter of 2021. The increase was primarily due to higher sales on the Florsheim website. Sales at its four domestic brick-and-mortar stores were also up collectively for the quarter.

Retail gross earnings as a percent of net sales were 64.5 percent and 66.2 percent in the fourth quarters of 2022 and 2021, respectively. Selling and administrative expenses totaled $5.9 million, or 41 percent of net sales, for the quarter compared to $5.6 million, or 42 percent of net sales, last year. Retail operating earnings were $3.3 million in the fourth quarters of both 2022 and 2021, as higher sales were offset by the lower gross margins and higher expenses this year.

Other
The company’s other operations have historically included the wholesale and retail businesses of Florsheim Australia and Florsheim Europe. However, as previously disclosed, the company closed Florsheim Europe. As a result, the 2022 operating results of the “other” category reflect only that of Florsheim Australia.

Other net sales were $9.2 million, up 16 percent compared to $8.0 million in the fourth quarter of 2021. In local currency, Florsheim Australia’s net sales were up 29 percent for the quarter, with sales up in both its wholesale and retail businesses.

Other gross earnings were 61.8 percent of net sales for the quarter compared to 61.1 percent of net sales in the fourth quarter of 2021. Other operating earnings reached $1.1 million for the quarter compared to $41,000 last year. The increase was driven by the improved performance of its retail business in Australia.

Full Year 2022
Consolidated net sales for the full year were a record $351.7 million, up 31 percent compared to $267.6 million in 2021. Consolidated gross earnings as a percent of net sales were 41.1 percent and 40.1 percent in 2022 and 2021, respectively. Operating earnings were a record $40.4 million, up 57 percent over 2021 operating earnings of $25.7 million. Net earnings were a record $29.5 million, or $3.07 per diluted share, in 2022, up 44 percent compared to $20.6 million, or $2.12 per diluted share, in 2021.

North American Wholesale Segment
Wholesale net sales were a record $283.2 million in 2022, up 38 percent compared to $205.4 million in 2021. While part of the overall increase was due to pipeline fill, sales were also up due to robust consumer demand and higher selling prices this year. Florsheim and Stacy Adams delivered the largest sales increases, with Florsheim up $27.7 million, or 43 percent, and Stacy Adams up $20.5 million, or 49 percent, over last year. Nunn Bush sales increased $15.7 million, or 40 percent, and BOGS sales increased $13.0 million, or 23 percent, over 2021. Both Florsheim and BOGS achieved record annual sales in 2022.

Wholesale gross earnings as a percent of net sales were 35.6 percent in 2022 and 33.8 percent in 2021. Gross margins returned to pre-pandemic levels as a result of selling price increases implemented to address higher costs. Selling and administrative expenses totaled $68.2 million and $49.9 million in 2022 and 2021, respectively. 2021 expenses were reduced by $5.5 million in wage subsidies received from the U.S. and Canadian governments. As a percent of net sales, wholesale selling and administrative expenses remained flat at 24 percent of net sales in both 2022 and 2021. Wholesale operating earnings reached a record $32.6 million in 2022, up 68 percent over $19.5 million in 2021, due mainly to higher sales and gross margins this year.

North American Retail Segment
Retail net sales were a record $36.7 million in 2022, up 16 percent compared to $31.6 million in 2021. The increase was primarily due to higher sales across all its brands’ websites, fueled by strong consumer demand. Sales were also up for the year at its four domestic brick-and-mortar stores.

Retail gross earnings were 65.7 percent of net sales in 2022 and 66.4 percent of net sales in 2021. Selling and administrative expenses totaled $18.1 million, or 49 percent of net sales, for the year compared to $14.3 million, or 45 percent of net sales, last year. The increase in 2022 was mainly due to higher e-commerce expenses, primarily outbound freight and advertising.

The retail segment had operating earnings of $6.1 million in 2022 and $6.7 million in 2021. The decrease was primarily due to lower earnings from its e-commerce business, as higher sales were offset by higher selling and administrative expenses.

Other
Other net sales totaled $31.8 million in 2022 up 4 percent from $30.7 million in 2021. Sales in U.S. dollars were up $3.5 million, or 12 percent, at Florsheim Australia. In local currency, Florsheim Australia’s net sales were up 22 percent for the year, with sales up in both its retail and wholesale businesses. Last year’s sales at Florsheim Australia were negatively impacted by COVID-related lockdowns that existed throughout much of 2021. Florsheim Europe was closed and had no sales in 2022 versus $2.3 million in 2021.

Other gross earnings were 61.1 percent of net sales in 2022 versus 55.8 percent of net sales in 2021. Other operating earnings recovered to $1.7 million in 2022, up from operating losses of $404,000 in 2021. The improvement in 2022 was due to stronger performance at Florsheim Australia and the shedding of losses at Florsheim Europe.

“A strong fourth quarter capped our record-breaking year at Weyco Group, making 2022 a milestone year for our company,” stated Thomas W. Florsheim, Jr., the company’s chairman and CEO. “Our annual sales surpassed $350 million and operating earnings topped $40 million, significantly exceeding our previous sales and earnings records. Looking ahead to 2023, our focus remains on investing in and developing our core brands, as well as improving the profitability of our business lines worldwide.”