Weyco Reports Third Quarter Sales And Earnings

MILWAUKEE, Nov. 7, 2016 /PRNewswire/ -- Weyco Group, Inc. (NASDAQ:WEYS) (the "Company") today announced financial results for the quarter ended September 30, 2016.

Net sales for the third quarter of 2016 were $79.1 million, a decrease of 13% as compared to third quarter 2015 net sales of $91.2 million. Earnings from operations were $7.3 million in the third quarter of 2016, compared to $9.1 million in the third quarter of 2015. Net earnings attributable to the Company were $4.6 million in the third quarter of 2016, compared to $5.5 million in last year's third quarter. Diluted earnings per share were $0.44 per share in the third quarter of 2016 and $0.51 per share in the third quarter of 2015.

Net sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, were $62.2 million for the third quarter of 2016, down 17% from $74.6 million in the third quarter of 2015.  Within the wholesale segment, net sales of the Florsheim brand were up 7% for the quarter, mainly due to higher sales to national shoe chains. This increase was offset by lower sales of the Stacy Adams, Nunn Bush and BOGS brands. Stacy Adams net sales were down 6% for the quarter compared to last year, primarily due to lower sales to off-price retailers. Nunn Bush sales declined 22% this quarter compared to last year. While its sales were down across a number of distribution categories due to a slowdown in consumer spending on soft goods, Nunn Bush was most affected by its reduced sales in the department store trade channel. Mid-tier department stores are facing a challenging environment as consumer buying shifts to the internet. BOGS third quarter net sales were down 31% from the same period last year. Due to last year's mild winter, retailers are carrying over BOGS inventory which impacted shipments this year, and also caused retailers to be conservative with their orders for Fall 2016.

Gross earnings for the North American wholesale segment increased to 32.2% of net sales in the third quarter of 2016, from 31.4% in last year's third quarter. Earnings from operations for the wholesale segment were $6.3 million in the third quarter of 2016, down from $8.2 million in the same period last year. The decrease was primarily due to lower sales volumes.

Net sales in the North American retail segment, which includes sales from the Company's Florsheim retail stores and its internet business in the U.S., were $4.7 million in the third quarter of 2016, down 1% as compared to $4.8 million in 2015.  Same store sales (which includes U.S. internet sales) were up 2% for the quarter. There were two fewer domestic retail stores operating during the third quarter of 2016 than there were in last year's third quarter, as three stores were closed and one store opened during the quarter. Earnings from operations for the retail segment were $313,000 in the third quarter of 2016, compared to $401,000 in 2015. The decrease was mainly due to lower operating earnings in the internet business resulting from higher marketing costs.  

Other net sales, which include the wholesale and retail net sales of Florsheim Australia and Florsheim Europe, were $12.2 million in the third quarter of 2016, up 3% as compared to $11.9 million in 2015. The increase was due to higher net sales at Florsheim Europe. Florsheim Australia's net sales were flat for the quarter. In local currency, Florsheim Australia's net sales were down 4% for the quarter.  Earnings from operations of Florsheim Australia and Florsheim Europe were $731,000 in the third quarter of 2016, up from $578,000 in the same period last year. The increase between years was driven by higher sales volumes and operating earnings at Florsheim Europe. 

Other income (expense) for the third quarter of 2016 was $113,000 of income, compared to an expense of $524,000 in the same period last year. This quarter's other income included foreign currency transaction gains of $102,000 compared to $340,000 of losses in the third quarter of 2015. These gains and losses resulted mainly from the revaluation of intercompany loans between the Company's North American wholesale segment and Florsheim Australia.

"This was a difficult quarter for our North American wholesale segment," stated Thomas W. Florsheim, Jr., the Company's Chairman and CEO. "Not only did we see a large reduction in BOGS orders following last year's mild winter, we were also affected by a soft retail environment and changes in consumer buying patterns which contributed to the loss of sales for two of our other major wholesale brands this quarter. While the retail landscape remains uncertain, we remain confident in the strength of our brands, and believe that each is well positioned in its respective market for growth when conditions improve."

On November 7, 2016, the Company's Board of Directors declared a cash dividend of $0.21 per share to all shareholders of record on December 5, 2016, payable January 2, 2017. 

Conference Call Details:

Weyco Group will host a conference call on November 8, 2016, at 11:00 a.m. Eastern Time to discuss the third quarter financial results in more detail.  To participate in the call, please dial 888-713-4211 or 617-213-4864, referencing passcode 10257065#, five minutes before the start of the call. A replay will be available for one year beginning about two hours after the completion of the call at the following webcast link: http://edge.media-server.com/m/p/8miz757a. Alternatively, the conference call will be available by visiting the investor relations section of Weyco Group's website at www.weycogroup.com.

About Weyco Group:

Weyco Group, Inc. designs and markets quality and innovative footwear for men, women and children under a portfolio of well-recognized brand names including: Florsheim, Nunn Bush, Stacy Adams, BOGS, Rafters and Umi. The Company's products can be found in leading footwear, department, and specialty stores worldwide.  Weyco Group also operates Florsheim concept stores in the United States and Australia, as well as in a variety of international markets.

Forward-Looking Statements:

This press release contains certain forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995.  Various factors could cause the results of Weyco Group to be materially different from any future results expressed or implied by such forward-looking statements.  Such factors include, but are not limited to, the Company's ability to: (i) successfully market and sell its products in a highly competitive industry and in view of changing consumer trends, consumer acceptance of products and other factors affecting retail market conditions; (ii) procure its products from independent manufacturers; and (iii) other factors, including those detailed from time to time in Weyco Group's filings made with the SEC.  Weyco Group undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

SOURCE Weyco Group, Inc.

Related Links

http://www.weycogroup.com