Weyco Group Reports 5% Decline in Net Sales for Q1 2025

Weyco Group, Inc. reported a decline in financial performance for the first quarter of 2025, with net sales totaling $68.0 million, a decrease of 5% from $71.6 million in the same period last year. The company's gross earnings also fell to $30.4 million, representing 44.6% of net sales, compared to 44.7% in the prior year. Earnings from operations decreased by 15% to $7.0 million, while net earnings were reported at $5.5 million, or $0.57 per diluted share, down from $6.7 million, or $0.69 per diluted share, in the first quarter of 2024.

The decline in sales was attributed to several factors, including geopolitical uncertainties, evolving U.S. trade policies, and cautious consumer spending. The wholesale segment saw a 4% decrease in net sales, primarily driven by declines in the Nunn Bush and Stacy Adams brands, which fell by 16% and 7%, respectively. In contrast, Florsheim's sales increased by 7%, reflecting strong performance in hybrid footwear categories. The retail segment experienced a more significant decline of 12%, largely due to reduced promotional activities compared to the previous year.

Operationally, Weyco Group's cash and marketable securities stood at $77.9 million as of March 31, 2025, with no outstanding debt on its $40 million revolving line of credit. The company generated $4.1 million in cash from operations during the quarter, a decrease from $14.3 million in the same period last year. The decline in cash flow was primarily due to lower net earnings and changes in inventory levels, as the company proactively increased inventory in anticipation of potential tariff impacts.

Looking ahead, Weyco Group is facing challenges related to increased tariffs on imported goods, particularly from China, which could significantly raise costs in future periods. The company is negotiating cost reductions with suppliers and plans to adjust selling prices to mitigate these impacts. Despite the current challenges, Weyco Group remains focused on long-term growth strategies, including product innovation and market expansion, particularly in the retail segment, where it continues to invest in data-driven tools to enhance e-commerce performance.