WEYCO GROUP INC Q3 FY2024 earnings call

• Overall net sales down 12% to $74.3 million in Q3 2024. Consolidated gross earnings as percent of net sales increased to 44.3%.
• North American Wholesale segment net sales down 12%, gross earnings percent up to 40.1%. Selling and administrative expenses down due to lower employee costs.
• North American Retail segment net sales down 5%, gross earnings percent at 66.9%.
• Florsheim Australia net sales down 15% due to closing Asia Pacific operations, sales in Australia down 1% but same-store sales up 1%.
• Interest income up to $900,000 in Q3 2024. Cash and marketable securities totaled $81.8 million at Sep 30, 2024 with no debt on revolving line of credit.
• Board declared cash dividend of $0.26 per share and special one-time cash dividend of $2 per share.

Overall net sales for the third quarter were $74.3 million, down 12% from $84.2 million in 2023. North American Wholesale segment net sales were $61.1 million, down 12% from $69.5 million in 2023, with gross earnings as a percent of net sales at 40.1% in 2024 vs 38.6% in 2023. North American Retail segment net sales were $7.2 million, down 5% from $7.6 million in 2023, with gross earnings as a percent of net sales at 66.9% in 2024 vs 65.4% in 2023. Florsheim Australia net sales were $6 million, down 15% from $7.1 million in 2023, with gross earnings at 59.2% of net sales in 2024 vs 61.6% in 2023.

• Confident in brands' positioning for growth when conditions improve.
• Strong balance sheet and liquidity to fund organic growth, invest in business, and pursue strategic opportunities or share repurchases.

• Uncertain impact of inflation on costs and consumers for products.
• Changes in interest rates and other macroeconomic factors may cause slowdown or contraction in U.S. or Australian economy.

Q: David Wright asked about Forsake and holiday season impact on retailers.

A: Tom and John discussed Forsake is less than 1% of sales, outdoor market challenges, and retailers' sluggishness with limited discretionary spending during holidays.

Q: John Deysher asked about revolver renewal.

A: Judy Anderson said the revolver renewed for another 364 days with terms remaining the same, based on SOFR, with Associated Bank as lender.