WEYS - Earnings call transcript Q1 2018

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Operator

Welcome to the First Quarter 2018 Earnings Release Conference Call. My name is Christine, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. the to turn you Wittkowske, now begin. may will call John over CFO; I

John Wittkowske

morning, to me everyone. quarter Good President and you. Thank Welcome Florsheim, John call. Florsheim our our this CEO; Tom and XXXX COO. Weyco On call is with today & Jr., Chairman conference first Group's

disclaimer. the to Before the I we discuss begin will quarter, for results read a brief

future XX-K statements future call, statements During may refer Form that that risks important make you the forward-looking cause or of events events with other concerning expectations this caution projections. factors the we and filed could We to results results performance actual Company's company. regarding our Weyco course The Group's Securities are from the current the or you our XX-K materially. to and of We differ identifies financial as and projections most just wish materially recent predictions may such that and the differ actual Commission. to Exchange

may Additionally, some refer comparisons measures. non-GAAP to

$X.X SEC with for year. last quarter, Diluted million the sales Operating net million, sales about XXXX. increased $XX.X last mainly over X% gross we quarter The compared up $X with sales $X.XX in the internet U.S. them. increase year. in XXXX. to million, $XXX,XXX, compared XXXX higher this includes American due website. higher which American which may sales X% the earnings in to internet retail use XX% this non-GAAP revenue both wholesale first $XX.X million quarter versus of X% Wholesale were $X.X operating to sales up stores $X.X sales a XX.X% gross XX.X% share operating to $X.X to the on website. decided better million flat from measures includes quarter $X.X compared earnings in for of and Net Weyco why year; up of last due Our in at from additional earnings earnings again, and the the first earnings were XXXX were $XXX,XXX million quarter per these were million. Company's segment, up attributable In year, contain $XXX,XXX million Licensing with increase Wholesale due of Retail were with Same-store earnings were last last earnings $XX,XXX our share performance $XX.X were U.S. net margin. million of increased the of X% higher operating per sales first the were Net sales million. million Group quarter for compared segment and year. quarter, were information XXXX, our first North an net up $XX.X retail the Company's as filings of sales mainly to XXXX. sales net on the $X.X net from North $X.XX

XX% $XX,XXX retail Europe to had the Florsheim due for sales losses tax at Company's XXXX, was to quarter, X% and decrease million XXXX to and compared last XXXX. cash Florsheim of with U.S. Florsheim down rate net to net quarter were sales Collectively, in resulting lower At Australia. lower which both due includes million our March Europe $XX.X year, down and million of the to first at the effective and sales Act totaled Florsheim the and no the was Jobs mainly had Florsheim provision businesses Australia in debt. of Australia's other X% Florsheim X, sales Australia in operation sales tax January $XXX,XXX Florsheim XXXX the in net of Our down versus lower primarily this for XX% XX, had we income The the it's $XX.X of Tax outstanding Australia. & quarter XXXX, the lower wholesale passing earnings XXXX. from quarter marketable Cut at retail operating federal wholesale and operating of securities of primarily due compared $XX.X businesses.

first $X.X that of million dividend XXXX, We a of capital Directors X% used of and to of million. share. three This over had shareholders capital the quarterly between On $X an record We of will dividend, XXXX's May cash now Tom our $X.X XXXX. X, those and on from Board cash During operations. to months, funds above $XXX,XXX generated of rate turn on we pay we in the Florsheim million be expenditures expenditures. XX, million $X and Jr., XX, increase the per previous CEO. per Our all of will to declared represents dividend call June Chairman I share May $X.XX payable $X.XX estimate

Thomas Florsheim

everyone. morning, good and John, Thanks,

American the wholesale up for Our revenues North quarter were X%.

principal our well. dress Given dress time managing up share environment, tough and at feel by the picking about we're footwear; our categories, our while the good same retail inventories casual, our increasing performance. market margins men's Within gross we

brands sales off start XXXX. solid American significantly, While in individual North a our varied our to of performance is wholesale business

business up was the Florsheim XX% Our for quarter.

sales our shelf the [ph] being but lot consumers towards Florsheim classic continues connects audience current among with penetration. retail continue being our retail up consistent vets younger channel receptivity brick-and-mortar features goal history. much Stacy chains Florsheim retailers at increasing retail are shoe salient trade down off stores. retail. also help updated and be the the in increasingly department quarter X% modern, by and driven authenticity Bush Anecdotally, and picking comfort that of helping care connected category. strong casual volatility reflect XX% and in the is long-term to is Adams believe to were as of exceptional us we're e-commerce were experience momentum brands national of is Sales quarter that move the feedback significantly. that our Adams are purchased by brand dress shoe a sales this very the space which in Stacy experiencing Sales momentum getting the sales the at Nunn will Florsheim. as sales to with We to channel Florsheim even performer in brand We and a such sales for up we're challenging offset for

As Bush that the discussed stabilize a should in see Nunn we is beginning conference calls, department growth the to the previous situation Bush by track back We mid-tier brand believe beginning of is to second on and challenges start Nunn get quarter. disproportionately do in impacted stores. this

inventory. surplus that inventory decrease of out reduction be needed came with insulated a off-price inventories. in result Our in conservative the outcome approach channels. was in ended was to consequently BOGS at very XXXX to from cleared clean seasonal X%. We BOGS was footwear for business product a of and positive BOGS line The a with This of down obsolete sales BOGS bottom perspective. took more a XXXX

head we are back the the As a towards year, for well of we positioned fall. half successful

North decreasing X% up our that same-store our mall the American saw and back traffic. Our terms We impacted was stores continue by online mortar to in XXXX, a in brick bounce in segment retail be slight first sales sales which of decrease of offset quarter

direct-to-consumer flagship in Our sales focus continues of our cities stores through key marketing maintaining a on for our handful be building websites while objectives. to

credit Our primarily remains account wholesale driven on our Overall, a of down by line. third in the have we The was which largest profitable loss our to for we're a managing and overseas was business became international X% Australia, focusing expenses sluggish quarter. issue. decrease the bottom business ensure

to international to positive, term potential in to seeing remains the the our foundation proactive be the in experienced order have challenges are make solid we're While determined necessary business have and similar future. a to the that we long model for changes U.S.

$XX a $XX year ago. March inventory compared million, XX Our million levels to at were

fewer to points. have outs. areas. As our ago, basis higher levels exposure XXX we previous to to by seasonal discussed versus lowered has product Overall margins in XX.X% conference margins This a due XX.X% those calls, inventory in gross year up our close were reducing contributed

therefore, if call Dollar stays Weyco the some current the currency it possible I'd remained for concludes [indiscernible], to This your you open now its that questions. dollar Thank the against like Group we interest your and at has strong formal has Chinese weakened face remarks. While pressure margin our to U.S. will and levels. it's in

Operator

Instructions] a Capital. question Adaptable have ahead. of Paul Thank do Go you. Carter from We [Operator

Paul Carter

Thank you.

First, regarding [indiscernible].

Thomas Florsheim

you Did say the of... Australian missed We the part customer?

Paul Carter

bond... The sorry. I'm

Thomas Florsheim

what ask us Nunn Did volume was the Bush you [ph]? of

Paul Carter

Yes.

of customer, impact Just how of what year big your a have? liquidation how been expect sort they've and you do to this

Thomas Florsheim

terms impacts impact. of on the of scores $X to going between liquidation, but I general think it's be a going or $X impact to million [indiscernible] think I don't have And of million. Yes, it's Midwest, in large and market,

[ph] disappointed other I that [indiscernible]. you liquidate. and that volume good account entirely they're think both, going were I wasn't a pick to see accounts XX for to think We're bonds volumes. in up Chapter It you unexpected, us. will -- the are They eventually

Paul Carter

And points just this of in questions sale revenues revenue you the product for a Will the on or of the lifestyle distributed receiving of form that's the couple Weyco royalties be India. year? wholesale in be Group's will across relationship XXX later

Thomas Florsheim

It will be a licensing revenue.

Paul Carter

or And the have interest? relationship of a do of sort non-controlling the it you Australian through is sub yours or

Thomas Florsheim

it's No, U.S. to the directly from India.

Paul Carter

what relationship you that expectations for your are say incremental able from And to is? revenue

Thomas Florsheim

over to first [ph] but to you're really and going in those couple from going that's to going we methodically going impact it's which years. Samara with found experiences opening start we build, of don't big expect stages, it Lifestyle, things have but closely will that are of where past be going that something the works and longer the it take it's with it's we're But term to to best. what -- early slow them it's one a in -- it's slowly pricing. Hopefully we're of It's they a kind do as stores working

Operator

I'm at showing questions time. no [Operator Instructions] this further

Thomas Florsheim

look with next to great talking everybody a And day. forward your Okay, participation. we'd Have to quarter. like thank for you

Operator

and for thank conference you, concludes today's Thank you. you participating. gentlemen. Thank This ladies call. And

You may now disconnect.

Weyco (WEYS) 7 May 182018 Q1 Earnings call transcript