WEYS - Earnings call transcript Q1 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Weyco Group First Quarter of 2021 earnings release conference call [Operator Instructions]. I will now like to hand the conference over to your speaker for today, John Wittkowske, Chief Financial Officer.

You may begin.

John Wittkowske

Thank you. Good morning, everyone, and welcome to Weyco groups conference call to discuss our first quarter 2021 results. me and Tom and John with Chairman Jr., COO. call, CEO; and Florsheim, this today Florsheim, are our On our President

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

the the parties, the such retail the or require bankruptcy the performance and including store and the of pandemic, and respect length similar We duration results this other health call, regarding to as just Group's you to future differ extent that taken as effects, to and the projections. our partners, welfare statements employees. expectations impact may COVID-XX financial pandemic recent by impact of filed ongoing limit During of to the of that current the among events as filings of form of that, on and most course with its financial supply foot we closures risks cause Commission make With the will the the and The numerous with that company. other traffic, could as such results our refer economy, at health and and projections events differ future stay are business caution the Exchange XXK extent the the including such predictions, Weyco may materially you by actions customers actual global the factors the any actual concerning form performance identifies the orders statements and chain company's forward-looking home effects proceedings or its company's SEC. and from the the XXK, Securities well or on company, materially. important wish other company's of the and of determine governments factors We company's

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

with first U.S. first may were per and $X.XX In net for increased the of to quarter the sales wholesale quarter for quarter XXXX. North the net XXXX $X.X Diluted year. in first year's versus million mid-March first months quarter. the the Net we compared earnings SEC were that quarter in off of $XX.X in last Operating In of X.X quarter XXXX and share compared first sales the $XX.X million them. first XXXX. per quarter $X.X earnings included of last per million. the this XXXX $X.XX few quarter last information from measures about were $X.X first non-GAAP million of segment, earnings sales resulted a why $XX.X in the $XX.X XXXX, of additional countries approximately year. during the million shut these million Net quarter of million in were Last Our to filings American much contain use share occurred down, in sales share XXXX of struck $X.X the which weeks drop pandemic before the sales million sharp

impacted and in Our of of footwear. to for first dress continue resulting effects XXXX pandemic, ongoing casual be by lower dress quarter the sales demand

the beginning XXXX. first in tariff later net on of the certain first in in outdoors compared continue of XX.X% to negatively pandemic. The imported sales was spend XXXX. time XXXX, September tariff with impacted footwear were of February sales earnings gross in the However, by XX% X.X% net reduced in to quarter China gross more XX% a Last year's of of sales the quarter XXXX. margins from XX.X% as outdoor BOGS Wholesale of were XXXX rose of brand consumers during

net of $XX administrative the last XXXX. high-tariff sales quarter, sales the XX% Our company to million XX% of year's Wholesale gross through the $XX.X improved margins the and were during net quarter of selling first first compared has sold of or in for XXXX in expenses because inventory quarter. million much or

of to due government-weighed quarter subsidies. were reduced XXXX million First $X.X approximately by expenses

a offset gross increase offset to administrative company's due due of at than quarter $X.X The were for and last higher selling XXXX. wages the down earnings retail $XXX,XXX the our to for to million March from US operating of to result $XX,XXX first losses $X.X compared improvement year's and $X.X stores, the of million margins from store which were quarter the e-commerce North compared earnings four $X.X last X% million was costs Same stores XX% There Net operating expenses. cost-cutting was operating of BOGS a partially sales. sales by lower to sales, XXXX. XXst, e-commerce in quarter. March and XX% American in due business in mainly compared company's higher from benefit stores quarter, lower the decrease retail and measures. million advertising first same XXXX, were decline sales fewer quarter to sales a store Additionally, as sales, for XXst, operations at The year. our the Retail Wholesale closing segment, the in includes brick-and-mortar in e-commerce were were up were business. brick-and-mortar earnings of unprofitable the both

performance for $X.X amounts The Our from quarter, million, cash, and line Florsheim other $X.X improved year. operating due businesses credit. and include currency Collectively, and increase $X.X totaling net Australia's operations, last Australia last million Florsheim reduction which in in the at both and had operating $XXX,XXX dollar and with dollar of stronger losses operating Australia. XX%. The losses US up were At March was Florsheim the to up $XX.X quarter, to to increase due to up relative of at compared and the had businesses. revolving Florsheim retail up losses first wholesale Australia's marketable were its our were million year. sales Europe, the XX% The as XXXX, on net contributed million Florsheim with investments XXst, also net of local Australia securities Florsheim our of wholesale sales the the Europe Florsheim sales sales in no with outstanding there retail net in totaled Australia. sales higher short-term

from XXXX, million of of repurchased million company $XX.X operations. used generated of to of $XX cash During X funds pay stock. $X.X we and dividends purchased the million months in short-term investments, our We million $X.X first

on all of CEO. Chairman June expenditures. call to of that on $XX,XXX We capital XXXX, capital over XXXX May of share We expenditures a annual Xth, and between declared now shareholders XXXX. Jr., $X also On estimate and Board to per to XXth, million. May turn our $X.XX like Florsheim, had will dividend XXth, would million cash XXXX, I be our $X Tom payable of record the directors

Tom Florsheim Jr.

And We graduations. tough a across business of that of demand, February, the reopening offices number up that me. are Excuse a good morning, the brands, for planning as well stimulus trajectory, through John. gradual April. as checks, pent-up all opened our weddings events After everyone. such factors trend behind there continued believe Thanks, of including a January, March in improved and as

solid by the weather weather strong, the the time insulated we BOGS to Meanwhile, to there in we have dollars a outdoors. for discretionary demand quarter. pandemic, adequate more of are for where [Audio legacy dress more remains and at few anticipate encouraged Gap] spent for reflecting athletic are have While lightly winter benefited and BOGS seeing casual was and rose BOGS. retail have we the we hard XX% a toward fall are spring trend one market sales for of in start been footwear. late from February for branded and We've sales garden-oriented the good Throughout a brands year lifestyle are as products. BOGS our as predict, the significantly the traditional the and the to enjoyed boot up dress apparel. footwear more consumers brand Since inventory. beginning for pandemic, demand Bookings relaxed

dress interest attire. slightly While did offices dress the fashionable reopened or of demand the more casual [Audio not more our half when significant second anticipate XXXX, this of styles Gap] year improved until we were fully formal in in and fall

footwear anticipated. rising quarter dress our the across of last we dress month brands all demand and for the However, than earlier experienced of casual in

performance this a category the by saw sent good sell-through to data also We in us for our retailers. key weekly

anticipated. at it than demand XXXX is we still not While levels, higher is

and good footwear. And traditional this believe that a to portion are the these We to one well position share few of Fortunately, of are relatively to orders. as business able we pick companies ship inventory more of in the market inventory footwear a we we rebounds. were positioned segment maintain good significant were a of up

placing of our footwear selling and legacy progress for mix We relaxed of as the all casual, pleased more with also making brands. we're are merchandise in the part

Bush, with is we and resurgence Over category toward Florsheim, critical investment casual developing Adams. the months, DNA with of see and Even footwear Nunn of the our the work traditional we majority our business, past success. a broad of of lifestyle range the casual aesthetic in our for line devoted the respective future XX in the Stacy design

We continue our growth to good e-commerce see business. in

first increase by web BOGS. sales Our was driven quarter

to We key in forward. and a started strategy April. see business moving part continued see web investment our also legacy our March, significant growth which through brands e-commerce in We business as for our of model

quarter. in we renegotiated are same to New unprofitable time, create retail will a expect to and a We Zealand important pre-pandemic more return are business us favorably exited and which At starting turnaround have Australia largely we compare levels. leases for with lifestyle. the and XXXX Both see in saw steadily sales terms, the on market. we up We this this opened numbers were favorable pleased have healthier stores extremely into markets

wholesale is year. the off solid also boosted growth BOGS strong Our of business a XXXX in Australian was in which significant last to business, heels our increase wholesale a by on start

retail mentioned Florsheim wind Europe. business down our we wholesale and prior to call, conference As our in decided in

November has last a marketer Alba begin onset few reached years the Florence, shoes women's select licensing a we worsened business the and markets year. of will Moda Europe of and agreement On European this selling other a and Moda, in positive in men's the Our in situation and with with footwear unprofitable long-term Alba note, Italy. beginning Florsheim been based pandemic. the of manufacturer

Alba about with our forward align Europe the about partnership have the and In new conference Moda in we the calls, talked growing with to down We sales relationship. bringing look brands. inventories this our last in Florsheim lower are legacy brand through to excited few

million dress process are to increased higher our million at at rebuilding for replenish our $XX.X inventory business XXXX. current have shoe inventories. possible started end for larger consumer Our was in order $XX to as With accounts as inventories annual the demand Many XXst the we delivery demand. to casual compared of shoes, dress meet requesting of of and March the soon

and remain somewhat the retailers as still third backlog quarters, grown Our has cautious. forecasting challenging fourth is for however

as BOGS well some times the the product Given economy in higher second ourselves up. extra are retail lead strong to long half new out as Asia, casual on of seeing we increased is are the as selling demand our stronger bringing for core plan to our we for The contributing US of a inventories. also inventory where position opens for styles,

well to as we of the price Lastly, in currently as experiencing pressure costs increases increases in are freight due materials. cost

trying your our second selling prices needs possible call interest We cover but Thank open concludes are year Weyco remarks. current margins. our at much planning the formal And of prices, Group. your you our in to this questions. now our to as for the of as increase we the to were half like to for in maintain This year I'd to

Operator

of the John Instructions] [Operator Deysher. question first line Our from comes

John Deysher

know earnings second they the legacy conference was for giving is that up, just last your good I really sign. what retailers. for couple done sales but up half? are customers about impressed A you commitments I what things. quarter. you of hadn't you down, mentioned solid the were One, a Are anything retail a even they your I'm but half the curious, I the healthy know from that's call, yet, second were so are yet? BOGS brands? telling though

Tom Florsheim Jr.

see to change a in We're starting that positive way.

let we to with large One have come orders the needs work orders are the being call commit that orders fall. large dress in then we'll EDI retailers product their in, the against the casual we last have they've And inventory to a put in weeks, forms. hard bulks that those attitude, and seen we typically dress week. me we've their that change they then out new that the And through business so bulks from over way, the that's advance And it need. retailers in come as in different seen few for retailers product delivered orders each in pickup. plan Our X that and

where business the collaboration fall. John, once in big out big increase call [indiscernible] little tend business and a we our like be to see And what more right retail week, they seemed after And still of in been cases, you to key what to and sell-throughs. orders we've it's get early ones cautious, bit as a also, much XX%. the because retailers. for what now sales numbers on it's want our was most in seen we've call, true. XX%, to from say mentioned We've in good but we're just And replenish year, in retailers, at some last trend their some be too in past in this data And beat inventory the with the had seeing for planning it retailers that And to sell. cases, this so just BOGs come XXXX brands we've a too I through exciting down

is that impacted positively some checks. stimulus by And of the definitely

off, off in events. recently eventually, going there's been wear shopping written that's the so Journal out shoes, will also And are effect people for to lot for Wall about Street how that planning clothes, for but shopping a wear

so to is do retailers getting backlog success half. more are second the legacy it we're I work in We having more have think with And still brands, for confident basically the and but coming in. feeling

John Deysher

back and the way other? one to do orders, you those anticipate holiday to So or when see school

John Florsheim

Well, we orders for already we and get them, for BOGS, BOGS. have hard

a fact and [Audio brands the year shortage are Gap] think I that in out. there's sold many

us out in well incentivize to advanced year. but we the Our the back give really themselves cover to ran retailers for of employees were styles, orders relatively of half key some good, still

So large BOGs. for we're in seeing increases backlog our

styles brands, the reality like. majority not backlog in the legacy our would key part done that is For get it's we're we orders. starting of more but to bulk our the is for orders, But at of most level [indiscernible] accounts,

the we've fourth already into those quarter. put And so in well

Tom Florsheim Jr.

covered fourth the through We've quarter.

John Florsheim

confident based We're more demand. on

half we're demand get from for business there about week in of our that bring cover to but feeling getting would the week from to majority that So and smaller we there normally that year be that inventory inventory yet. probably lot inventory back fill planned of through able part orders the being than a to the is we're better and we retailers

John Deysher

ports? Speaking about at How what's supply in, chain? that there of shaping up inventory in the was point? Are the this status bringing bottlenecks still the

John Florsheim

that little to not There are still actually worse, situation a bottlenecks the better. And ports. has bit gotten

in the I particularly containers think weeks. take ports, are one the delays two of coast, volume But the just containers it's probably two this out issues. coming And because country. imports there West that week, in seeing another into of there the then we're getting We're can seeing China. once of delays hit

faced we is aware footwear that some as a And that we them with The problem, with of so we're a from as everybody's but possible, much trying in anticipating of fall. standpoint us, supply manufacturing are plan the as challenge. own is seem because but late so private getting but deliveries their the very not situation retailers They're brands move still faced with to into label it it. a here actual is working chain they're with problem. The of

John Deysher

So to couple with of questions. you have deal A just financial that.

bought what million that was that You stock. the back of stock? or price many average $X.X shares How of was

John Wittkowske

quarter. $XX.XX That remaining average will or XXX,XXX XX-Q. back bought to an authorized this we about yet We the have authorized And XX,XXX have that at least back in the of we about price buy for at at shares be time. shares

John Deysher

you're if tell us you active Can currently?

John Wittkowske

feel we what upon pricing based active is. the always We're

back always but much evaluating it. it the at always so, in last bought haven't we're We and or month looking

John Deysher

million subsidizing mean, quarter I does government Is payroll due subsidies. first we. to of can how reduced by what is the mean expenses government were approximately continuing? that wage the that then $X.X XXXX And or your

John Wittkowske

you used to earned then that -- changed two extended than credit retention the be, is XXXX the says for it first The two entire for There's to in quarters year. that qualify. to for employee XX% had the down are true. Yes, XX% so They quarters, a if and the XXXX. it for place more called thing retention it credit that or be last was you

XXXX. XX% gross qualify, in you receipts have to If you with be down compared

for So I'm for wages you a each round credit giving do, for a not to employee $XX,XXX maximum a eligible approximately, ballparking, you you're equal per if of to I'm quarter up numbers, wages. in $X,XXX

maximum it's of full-time for So $X,XXX effectively employee per quarter. each

XXXX, continue you qualify the credit. you if So XX% of lower show sales than to for

quarter. year a also use can You prior

we qualify So to second we're for going quarter. the know

three know quarter depends results doing So XX% just we on subsidy for It on XX% yet what we're two. on four. I qualify will said, that we based have will We that how for XXXX, down. and not quarter do in credit the if up

did in So get quarter. first we the credit the

yet the quarter. three Unknown will and in credit We second the four. get on

John Deysher

you anticipate similar to QX to QX, And be amount? in

John Wittkowske

it's wages. wages employee based $XX,XXX of XX% upon Yes, because That's credit. employee wages. the up It's to in

So can quick do you math. the

those your you If $X,XXX $XX,XXX will a get quarter making employees. for a year, are people

John Deysher

And shutdown is that then expenses question was there extraordinary my in final shutting any from down? QX or Europe, Florsheim expenses

John Wittkowske

those one-time No. put in were much third we fourth costs we Most of that. through and last had year quarter of quarter year, fourth the last those charges, had when our

Now are we be but some don't those shutdown won't can't our costs, going guarantee that believe I numbers. be material to there to

Operator

question next comes from [Steve the Our Instructions] Rudd of Blackwall]. [Operator line

Unidentified Analyst

BOGS what So can of you break sales? percentage out sales total for are me

John Wittkowske

can. is in we disclosed That XX-Q. the Yes,

John Florsheim

quarter. first For

John Wittkowske

about For first the first quarter? quarter. talking And I assume you're

Unidentified Analyst

Correct.

John Wittkowske

will out a the take filling. quick for me quarter Let be deeply --

Tom Florsheim Jr.

BOGS little John of weighted second while year. And number, half the toward context, of still heavily Wittkowske to a give bit pretty just Steve, the is getting is that

for quarters BOGS. smaller second the first, are the So quarter

the so essentially. numbers And quarter vary by

John Wittkowske

disclosed math wholesale segments for sales quick the XX-Q. for these and be American And real North I'll again here. this BOGS, will do in you the are

is quarter public. in giving that not of was wholesale any I'm information the XX% of So not XXXX BOGS. first

Unidentified Analyst

So math you'll than I dollar the let me. about to maybe in a -- faster got amount, -- me, that's do just

John Wittkowske

million $X.X BOGS. for about That's

Unidentified Analyst

And get that as to then a ramps percentage right? we up three and as four,

John Wittkowske

That do percentage me the and XXK, the in the and MD&A you right section. in not it's from right that is get is of I BOGS yes. seasonal year, have -- front in correct. but last can

there. out it's So

the would my certainly it forward. be is So plan going plan --

quarter, of model year also You've fabulous and brand. legacy I margins growth. a growth margins, year attached BOGS, to with brand which business brand this for has to this got to quarter it's that's mean, designed a better better

you all the a of real off heading, that see you to on where get think isn't I I then and exceed price. probably I'm get our mean, share current could it? plan that spin would multiple a multiple

Tom Florsheim Jr.

the really of to things not plan. mean, that's the Yes, I you one have that consider.

Unidentified Analyst

not? Why

Tom Florsheim Jr.

One consider XX% We is growth been sales. that the have depressed two in things in brands have you Florsheim in to legacy the a had years of row. that

John Florsheim

growing fastest our It's brand.

Tom Florsheim Jr.

Yes, the prior pandemic. to

growing brand. fastest that So actually was our

John Florsheim

And brand. largest our

Tom Florsheim Jr.

on portfolio. But to our we're acquisitions. point, this outdoor stated for other And your previously, growing very in we've looking focused business the we're

actually it's suggesting, So to going beef our we're what opposite area the up kind that of you're portfolio. of of

John Florsheim

of portfolio It from business, year. online to range numbers start terms in And as cycle especially for offering. while big products surge against seeing that we're the now diversifies of traditional in our our a BOGS actually we're we last

out. balances it So

Unidentified Analyst

roughly, sense rate? growing, last BOGS your what I so few quarters So it's for our about the growth is XX%, is, is mean,

John Florsheim

strong I less BOGS in last or perspective, was by e-commerce. saw we remember quarter, the growth wholesale and where more number flat was very No, a from don't year,

the Our continued to business year, through up significantly was consumer and e-commerce last quarter. direct first that

the XX% quarter I think were BOGS up over e-commerce. in we first

Unidentified Analyst

to you've analysts, to investor how yes, hard enough, know mean, can may have people point I company can and the And infrastructure, the have listen, XXX% may pay growth, to how meantime, to you mean, these growing growth management, think analysts be in you of because, project have I about, I Florsheim in to out. these an from you because you have folks for view, now something love around it's it's been not know occur. its call So or And own multiples on based but separate you have if really tell guys, you will days it's it'll long a get management things that a. wild you mean, XX%, story which XX get doesn't don't I XX%, years. right,

John Florsheim

that interrupt, for here but in profitable brand. allows that be we -- But to to a that out very I leveraged, Florsheim were don't BOGS benefit structure Florsheim mean [indiscernible] elected here,

And so that's the key. really

looking more we and further strong of very legacy have continue about. sort of we're we're works there all kind you're back for going ways our on for And see business our to BOGS, I together. to half standpoint, it out to a back, So certainly And think confident diversify the feel this business growth going bounce [indiscernible]. of from year, portfolio always to

Unidentified Analyst

set separate further them for independently, you just right? out And independently, to running to complete don't to a lastly, just your BOGS need reporting be this point, up you infrastructure or pay, consideration, to effectively, always be could

John Florsheim

BOGS. would That correct, out plans thin it's be our to not in but

Unidentified Analyst

I guess a keep executing. will up, lift think doubt. retail without And I this market the

Tom Florsheim Jr.

agree. We

Unidentified Analyst

question. no there's Yes,

Tom Florsheim Jr.

Yes. a year. No, escape did hard footwear we and looking year much and that, the brands we're apparel forward lot pandemic better this a to was of not for and

Operator

Thank over closing you. the no comments. for queue. the turn will call now like I to back I'm in John questions further to showing

John Wittkowske

a quarter. we and your for next with day. you Have talk will attention great today, Thanks

Operator

Ladies for and participation. you Thank your call. today's gentlemen, this concludes conference

disconnect. You may now

Weyco (WEYS) 9 May 212021 Q1 Earnings call transcript