- Overall Net Sales: $74.3 million, down 12% from $84.2 million in 2023.
- Consolidated Gross Earnings: 44.3% of net sales, up from 43% last year.
- Quarterly Earnings from Operations: $10.2 million, down 18% from $12.4 million in 2023.
- Quarterly Net Earnings: $8.1 million or $0.84 per diluted share, compared to $9.3 million or $0.98 per diluted share last year.
- North American Wholesale Net Sales: $61.1 million, down 12% from $69.5 million in 2023.
- Wholesale Segment Gross Earnings: 40.1% of net sales, up from 38.6% last year.
- Wholesale Operating Earnings: $9.4 million, down 16% from $11.3 million last year.
- North American Retail Net Sales: $7.2 million, down 5% from $7.6 million last year.
- Retail Segment Gross Earnings: 66.9% of net sales, up from 65.4% last year.
- Retail Operating Earnings: $800,000, compared to $900,000 last year.
- Florsheim Australia Net Sales: $6 million, down 15% from $7.1 million in 2023.
- Florsheim Australia Same-Store Sales: Up 1% for the quarter.
- Interest Income: $900,000, up from $300,000 last year.
- Cash and Marketable Securities: $81.8 million as of September 30, 2024.
- Cash from Operations (First Nine Months): $17.3 million.
- Dividends Paid: $9.6 million.
- Stock Repurchases: $600,000.
- Capital Expenditures: $900,000, with an estimated annual range of $1 million to $2 million.
- Special One-Time Cash Dividend: $2 per share declared on November 5, 2024.
Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Consolidated gross earnings as a percent of net sales increased to 44.3% from 43% in the previous year, indicating improved profitability.
- The North American Wholesale segment saw an increase in gross earnings percentage from 38.6% to 40.1%, reflecting better margins.
- Interest income rose significantly to $900,000 from $300,000, benefiting from higher cash balances.
- The company declared a special one-time cash dividend of $2 per share, showcasing strong financial health and shareholder returns.
- Florsheim brand sales exceeded the prior year, demonstrating resilience in a challenging market.
Negative Points
- Overall net sales for the third quarter were down 12%, from $84.2 million in 2023 to $74.3 million in 2024.
- Quarterly earnings from operations decreased by 18%, from $12.4 million to $10.2 million.
- The BOGS brand experienced an 18% decline in sales, impacted by mild weather and market saturation.
- Retail segment operating earnings fell from $900,000 to $800,000, indicating a decline in retail performance.
- Florsheim Australia's operating earnings dropped to zero from $300,000, affected by the closure of Asia Pacific operations.
Q & A Highlights
Q: Can you provide some insights into the performance and future of the Forsake brand?
A: John Florsheim, President and COO, explained that Forsake, acquired in 2021, has faced challenges due to an oversaturated outdoor market post-pandemic. The brand accounts for less than 1% of sales and has struggled to grow. However, they are working on new products and building a sales force to position Forsake for future growth as the market stabilizes.
Q: How significant is the holiday season for Weyco Group's business?
A: Thomas Florsheim, CEO, noted that while shoes are not a major gift item, the holiday season does see increased sales due to seasonal demand for winter gear and dress footwear for parties. October is typically a strong month as consumers prepare for colder weather.
Q: What feedback are you receiving from retailers about the upcoming holiday season?
A: John Florsheim, President and COO, mentioned that the retail environment is currently soft, with limited discretionary spending affecting the footwear market. The shortened holiday calendar due to a late Thanksgiving adds to the challenges, but they remain hopeful for a pickup if weather conditions improve.
Q: Can you provide details on the renewal of the $40 million revolving line of credit?
A: Judy Anderson, CFO, confirmed that the terms of the revolving line of credit with Associated Bank remain unchanged. It renews for another 364 days, with the rate based on SOFR plus a margin of 125 basis points.
Q: How is Weyco Group managing its inventory levels in anticipation of the fourth quarter?
A: Thomas Florsheim, CEO, stated that they are building up inventory to meet demand for core items during the fourth quarter. They are comfortable with current inventory levels, aiming to support both wholesale and e-commerce sales.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
