For the third quarter of 2024, Weyco Group, Inc. WEYS reported earnings per share (EPS) of 84 cents, down from 98 cents in the same quarter last year, marking a decline of approximately 14%.

Net sales for the quarter totaled $74.3 million, reflecting a 12% decrease from the $84.2 million recorded in the third quarter of 2023. This reduction in both revenues and earnings points to challenges in Weyco’s key markets, primarily driven by reduced consumer demand and unseasonably warm weather that impacted sales for certain product lines.

Weyco faced a challenging quarter, particularly in its North American wholesale and retail segments. Management's commentary highlighted several factors impacting Weyco’s financial performance this quarter. CEO Thomas W. Florsheim, Jr. acknowledged the adverse effects of reduced consumer spending on discretionary items, which weighed heavily on sales across all North American wholesale brands. Additionally, the milder start to the fall season hindered performance for BOGS, a brand that typically benefits from colder weather.

While sales were down across several brands, the company’s gross earnings improved slightly, which management attributed to stringent cost control measures and a reduction in employee costs.

Weyco Group, Inc. Price, Consensus and EPS Surprise

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Quarterly Operational Update

Gross earnings, as a percentage of net sales, improved slightly to 44.3% from 43% in the third quarter of 2023, highlighting some efficiency gains in the cost structure despite the drop in overall sales.

Interest income also contributed positively to financial performance, increasing to $0.9 million from $0.3 million in the third quarter of 2023. This was primarily due to interest earned on higher cash balances in the United States and Canada, providing some cushion to Weyco’s earnings amid soft sales.

Total selling and administrative expenses declined 4% from $23.7 million in the third quarter of 2023 to $22.7 million.

Operating earnings declined 18% to $10.2 million, down from $12.4 million in the prior-year period, due to lower sales volumes.

Key Business Metrics

North American Wholesale Segment

In the North American wholesale segment, net sales were $61.1 million, a 12% decrease compared to $69.5 million in the third quarter of 2023. This decline was attributed primarily to reduced demand for the Nunn Bush, Stacy Adams and BOGS brands:

Nunn Bush sales dropped 20%, partially due to a previously disclosed shift in shipment timing to a large retailer from the third quarter to the second quarter, coupled with an overall decrease in demand. Stacy Adams sales declined 17%, largely impacted by reduced demand for dress shoes, reflecting shifting consumer preferences. BOGS sales were down 18%, affected by the mild and dry autumn weather across the United States, which reduced “at-once” orders.