Weyco Group, Inc. WEYS reported its financial results for the second quarter ended Jun 30, 2024. Earnings per share (EPS) of 59 cents indicates an improvement from 50 cents in the prior-year quarter.
Net sales of $63.9 million denoted a 5% decrease from $67 million in the second quarter of 2023 due to mixed performances across different segments and brands.
The Wholesale segment showed resilience, and the Retail segment maintained steady sales but faced higher expenses. The cessation of operations in the Asia Pacific and reduced retail footprint in Australia impacted overall results, yet the company managed to improve its gross margin and maintain strong net earnings growth.
Weyco Group, Inc. Price, Consensus and EPS Surprise
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Quarterly Performance Overview
The gross earnings margin improved to 43.9% from 43.3% a year ago, primarily due to lower inventory costs. Despite the decline in net sales, earnings from operations remained flat at $6.7 million, indicating effective cost management.
Interest income totaled $1 million compared to $0.2 million in the second quarter of 2023 due to higher cash balances in the United States and Canada.
Net earnings reached a record $5.6 million, a 15% increase over the second quarter of 2023.
Segment Performance
North American Wholesale Segment
Net sales in the segment were $50.2 million, down 2% from $51.5 million in the year-ago quarter. The performance of key brands varied: Florsheim and Nunn Bush sales increased 3% and 8%, respectively, while Stacy Adams sales decreased 10%. BOGS sales dropped by 33%, reflecting cautious ordering by outdoor retailers. Wholesale gross earnings improved to 38.2% of net sales from 37% in the second quarter of 2023, driven by lower inventory costs. Wholesale operating earnings increased by 8% to $5.8 million due to higher gross margins and a slight decrease in selling and administrative expenses.
North American Retail Segment
Retail sales were flat year over year at $7.6 million. Retail gross earnings increased to 67.5% of net sales from 66.2%. However, operating earnings declined to $0.7 million from $1.1 million due to higher web advertising and freight costs.
Other Operations
Net sales of Florsheim Australia fell by 23% to $6.1 million, primarily due to the closure of operations in the Asia Pacific region and fewer retail stores. Gross earnings for Florsheim Australia were 62% of net sales, slightly down from 62.4%. Operating earnings decreased to $0.2 million from $0.3 million.
Balance Sheet Update (As of Jun 30, 2024)
Weyco Group had cash and cash equivalents totaling $78.4 million, an increase from $69.3 million at the end of 2023.
The company's total assets were $303.8 million, down from $309.3 million at the end of 2023.
Weyco's operating lease liabilities stood at $3.5 million, down from $4 million at the end of 2023.
Total equity amounted to $251.2 million, an increase from $244.5 million at the end of 2023.
Decline in Cash Flows
Operating cash flows for the first half of 2024 were $17.7 million, down from $43.6 million in the same period last year.
Other Developments
On Aug 6, 2024, the Board of Directors declared a cash dividend of 26 cents per share, payable on Sep 30, 2024, to shareholders of record as of Aug 19, 2024.
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