Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the Weyco Group Fourth Quarter 2022 Earnings Release Conference Call. At this time all participants are in a listen-only mode. After the speaker’s presentation there’ll be a question-and-answer session. [Operator Instructions]. today's being that advised be conference recorded. is Please

hand over Chief to would Officer. now speaker conference to like Anderson, I your the today, Financial Judy

Judy Anderson

Thank Jr., results. COO. On Group's call to President with fourth you. and are and CEO; this and call Tom and today Florsheim, Florsheim, quarter XXXX to discuss and Good Weyco year full me everyone, Chairman morning, conference welcome John

for the a we quarter year, the begin Before read statement. to I brief results cautionary discuss will and

may or projections we statements forward-looking future materially. current statements and our that predictions call, to of financial are regarding this During wish and differ these actual make events other concerning you We the expectations that events company. just may caution or the performance future results

section to a Factors recent products, Risk factors in you of We results cost economy. for filings slowdown in XX-K to the for may contraction our refer report demand a and annual that the cause our to uncertain or Commission the U.S. and discussion most consumer with Exchange and and on our other including our of Form cause actual projections, inflation on interest could important risks and our Securities macroeconomic impact factors our rates or other that materially Australian the increased differ from entitled

North Consolidated in segment. due compared Net margins of for sales million. XX.X% for increased of higher last fourth earnings last year's to $XX X% quarter quarter wholesale our the year's quarter XXXX fourth sales net the down of to net fourth $XXX.X in gross gross quarter to million, compared American net of sales to were sales XX.X%

the million $X.XX last rose million record XXXX. $X.XX compared or to $XX.X per earnings year. XXXX share, were XX% net per in up $XX.X or $XX.X diluted operating to million million, quarter a quarter Fourth of diluted compared $XX.X earnings to fourth Quarterly share

down to chain Wholesale million, orders XX.X% were in for to to margins sales a sales million year. for X% year's fourth some sales of due in fourth quarter the pre-pandemic segment, net caused Last last $XX.X price the which the quarter In earnings Gross year's quarter. quarter supply were result American last net delays, wholesale ship quarter high fourth from net the to North third $XX.X of levels abnormally increases returned costs. quarter. higher sales selling XX.X% of to implemented as compared address gross were

net quarter $XX.X advertising higher quarter, were due last rose earnings to net increase was in to expenses gross The XX% million sales, last XX% margin. the for $XX.X sales and administrative mainly $X.X and XX% XXXX in over primarily to fourth or for Selling compared pension of expenses. quarter, up year. to of or due million higher million Operating million $XX.X the year's

were retail up sales million our segment on increase $XX.X American to domestic Net quarter, compared in million was $XX.X also our were four a quarter. last The sales Sales due stores for to record for primarily X% at Florsheim collectively website. the the higher the North up year.

by XXXX fourth higher year. this and were net 'XX were of the of $X.X million or quarter percent of sales net both offset respectively. in quarters and XX% $X.X expenses net a as sales the Retail of earnings million in sales XX.X% to or fourth million the and lower quarter as XX% totaled sales gross margins higher Retail gross of were year. operating compared for and and earnings administrative $X.X last XXXX expenses XX.X% Selling 'XX,

included Florsheim operations wholesale have other Our Florsheim historically and retail Europe. businesses and the of Australia

Europe. disclosed, However, the as Florsheim previously company closed

local retail the fourth that wholesale both sales currency, the to XX% Florsheim XXXX and $X.X million Other of net XXXX. $X million, in other reflect category compared the of Australia. result, up with were its quarter, In up a were the XX% businesses. Florsheim for As Australia's in net up only operating results quarter sales sales of

fourth were earnings net $XX,XXX $X.X quarter earnings XXXX. XX.X% the of gross Other improved year. of compared last driven sales of business our Australia. Other the quarter reached increase net retail to million in for for the operating was by compared in performance sales of quarter to The XX.X%

of as We $XXX.X full net of sales were net the a record XX.X% XXXX were XX.X% per million. per million results. gross XXXX, diluted million up over diluted to million XXXX respectively. were up and will $X.XX share in $XX.X $XX.X our in for compared record or earnings now a XXXX discuss net XX% Operating compared earnings record XXXX. XX% Consolidated XX% XXXX. year were a $XX.X in share, million, year XXXX operating sales million, $XX.X $X.XX $XXX.X up Consolidated full a earnings to earnings and percent or

million North $XXX XXXX, $XXX record wholesale American sales a net million compared in were up in XXXX. XX% to

$XX.X XX.X% 'XX, of levels in administrative selling margins XXXX were a Selling to consumer implemented increases in for XXXX. year up due robust were sales, to million sales as respectively. the year. also as and Gross 'XX the pipeline price result expenses to this costs. While prices address gross and of higher demand XX.X% part percent and in Wholesale returned and pre-pandemic sales $XX.X due million increase net higher to of was selling were earnings and overall a

XXXX subsidies governments. million expenses $X.X from in and wage received the U.S. reduced by Canadian were

in percent and $XX.X remained sales XX% As Wholesale in mainly record 'XX. administrative expenses this gross XX% $XX.X of and XXXX, million wholesale flat earnings of margins reached sales year. XXXX, and due a higher selling operating net a in sales, at XXXX over both million to net up

segment, higher American million stores. XXXX, brands' also to in domestic in primarily strong were XX% at net demand. The Sales North fueled due $XX.X were the retail up year million up a compared websites $XX.X was four the sales sales our record all In increase across XXXX. consumer for by brick-and-mortar our to

were sales earnings gross of retail $XX.X million sorry. I'm year, -- the For net

sales year, or for selling in increase compared sales of e-commerce higher $XX.X mainly the XXXX of advertising. and Retail, net sales due to For of earnings and in The last was of net XX.X% XX% freight XX% outbound XXXX. to year XX.X% million $XX.X were administrative in million the expenses retail XXXX gross year. and net expenses, net were or primarily sales

operating retail $X.X The had million higher were higher XXXX our due earnings million administrative by to from and e-commerce earnings offset in decrease segment expenses. primarily selling of The sales was and XXXX. business as $X.X lower in

had $XX.X XXXX, million operations of sales X% from other XXXX. million up Our in in $XX.X net

local Florsheim for net wholesale its U.S. closed dollars in with Last $X.X had by $X.X up In Australia XXXX. Sales no versus that existed currency, of Australia. in 'XX sales in COVID-related year, both sales in throughout sales and were Florsheim Australia's million year's or at of sales Europe sales XX% XXXX. up negatively was much Florsheim million at XX% businesses. impacted retail and Florsheim were the up lockdowns were

net losses performance Other Other versus stronger to losses at the XXXX. operating XXXX, $XXX,XXX recovered were Florsheim XX.X% XX.X% earnings XXXX and up The earnings due million Florsheim gross from sales to sales in operating in XXXX of of in in at XXXX. $X.X shedding Europe. of Australia was net of improvement in

had million short-term cash we million of investments XX, XXXX, line our $XX and on December outstanding $XX.X our and credit. revolving securities $XX.X At million, totaled marketable

of on of During of investment XXXX, credit we million had liquidated our $X million securities. line net and $XX.X borrowings

$X dividends stock. to our of $X.X used We to and in funds repurchase pay million million company's

addition, net use fund cash to purchases. million in of operations resulted In our a mainly $XX.X inventory

million between annual We $X expenditures our of that and capital $X $X.X XXXX also had will capital million expenditures. be estimate million. We

per On to March declared record share XXXX, $X.XX a on all Directors of XX, shareholders of X, March XXXX, Board March XX, XXXX. cash our dividend payable of quarterly

CEO. Chairman I turn Florsheim, to like to would Tom call now over the Jr., and

Thomas Florsheim

everyone. Thanks, good morning, and Judy,

very quarter year our sales off a results, with and are earnings. pleased fourth We capped in both which record

challenging Our chain entire to extremely of conditions, we worked supply proud team are and this XXXX throughout accomplishment. market and navigate hard Weyco issues

mentioned, As in back as on to shelves had strong this year retailers pipeline year. half needed of get many our their first do the of shoes to fill, part with the volume

business, in enjoyed resurgence experienced our strong more we traditional However, our for XXXX. brands, consumer a demand especially which also in

brands fourth fourth against our comprised Florsheim, business of XX% and driven timing by down all Florsheim Stacy And come was legacy record year, was quarter. three had Bush, the for last Nunn years. and going a quarter shipments of Adams back

year brand the XX% was for Florsheim. Stacy for the However, record year. year. sales brand up the for for XX% quarter Adams the were and and up X% a The Bush XXXX for was the XX% the was year for up XX% Nunn and quarter

work Our legacy as as social to business consumers the dress strength well benefited for environment. once their brands of and men's updating occasions return refined office the wardrobes were casual again the from as the

the quarter, referred While more the performance footwear a and see category healthy, expect XXXX. market during fourth to we into steady sell-through is normalized throughout the refined

in product mix, past Bush Bush in value-oriented, retail strong calls, performance their casual and Florsheim, fourth with Stacy Florsheim conference its at progress diversifying Adams also boot footwear. most comfort Nunn Nunn continued with having success focused the casual make to with discussed a As on are the quarter.

on for XX% BOGS environment, In mix chain quarter, the we seasonal product continues they due saw orders the with along were of of to to less backlog issues. a Canada. outdoor oversaturated footwear down softness weather XX% year, of consumer In reflecting quarter, promotional the was sales. for with its year delivered product. leading brand fourth the and BOGS While XXXX, unwinding record the demand, of the lifestyle mild U.S. category as parts a into up more certain the was supply in the strong winter We in broaden a to of

the overall Despite about remain the performance in these BOGS enthused -- of the changes we the market, brand.

we through we outdoor of the these are and forward changes that challenging continue to move XXXX, we mindful category, evolve but more offering. the environment product and in we progressed the the brand navigate optimistic are can As

for sales and X% year. segment, were retail our up XX% the In for quarter the

year. of challenges increase we the of our double-digit Given BOGS, environment growth this the appeal reflects impacting are the the our strength brands. e-commerce believe for with and the fourth weather promotional platform of the and for quarter the pleased We and some

the line gross bottom leading we the environment a for flat affected expenses and profit perspective, a margins, fourth our had higher to From promotional quarter.

as reduce profitability. quarter, a are in growth striking efficient space, our long advertising also and during we business less of we slightly the freight cognizant maintaining make more ways costs, to in progress direct-to-consumer spending controlling right we competitive, creative found However, as between balance and our the did our on

and in net year wholesale XX% quarter in and Australia retail, Florsheim were spot bright e-commerce. as local this for XXXX, via wholesale and year. profitability of increase resulted as a was up the in the we including strong for across of in with business to greater management do as good increases sales Australia's a This saw with warehouse portion growth shutdowns part fourth but to Florsheim, well A XX% new the had move for our stores. of e-commerce our XXXX, the pandemic-related success the several and related for in BOGS currency comparisons our the for was team's opening execution division.

overall XXXX, XX, $XXX of was million up September December the inventory at of end as from XXXX. Our $XXX million

our 'XX early. much have we And supply in due issues, inventory building of We been inventories. spring brought our to chain for

the inventory point and us to in now at to plan is peak supply and at our of easier being normal it the this to the see first through targeted. are product our move to come inventory We as is bring will levels back year. closer that levels expect for down and The make half largely season we that right chain

interest formal Weyco to That Thank questions. our open now call Group. And your I like you would your in to for concludes remarks. the

Operator

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

Your line is open. now

John Deysher

call. for taking my Thanks morning. Good

quick the just One, I on Forsake Just we're a pretty anniversary two where make want I of monitoring two-year know the this at We're questions. closely. a we sure coming for to quick brand you're on target -- with point? that. that are launching up purchase.

XXXX. last the think fall update for was that still of Is I realistic?

John Florsheim

just Forsake. new Yes. there. product starting to This is We're of get out on things a really John. couple Yes,

the us But the Weyco chain down June fall supply more think of completed a XXXX. of X.X XXXX. looking for of bit. the we're I at we issues been except purchase And It's years. slowed overhaul in a

from it's of a So really, kind it's to standpoint. new -- too product tell, early

market call. That the brands we market lower with recognition. become has the more which consumer for has the gotten in outdoor efficient, being less direct-to-consumer difficult, especially referenced And said,

back market, moving year. We're getting forward. we're looking half in very new is to jury forward much the So out. still out But the of product the

John Deysher

Okay.

flow wondering like Okay, non-recurring You've There's settlement That's the where do income Did $X.X just and those you. appear good. I'm they million then looks income questions broken Thank impairment cash of of a of a SG&A? out? items the the they go year. Or helpful. Where income for on trademark And And on those appear through couple for just statement? -- not the it's since how there. through an flow some charge the got pension $XXX,XXX statement? did statement. on statement

Judy Anderson

Both settlement through of pension because expense. that of It's The the loss pension $XXX,XXX those other split goes SG&A. make us income. bit. let SG&A. Actually, change That a And it just accounting of little $XXX,XXX is through go other part me of rules, is in it. the loss,

settlement impairment is charge in So And the the that's loss. SG&A.

John Deysher

million? $X.X

Judy Anderson

Yes.

John Deysher

through? that's consideration, the of Okay, measurement from And that good. flow Forsake. I guess contingent gains does fair value for Where

Judy Anderson

in SG&A. also That's

John Deysher

in embedded SG&A. also That's

Great. Okay.

Judy Anderson

Correct.

John Deysher

Terrific. right. luck update, the forward. good Thanks All for and going

Operator

David with the line from Henry Trust. Investment comes next Our of question Wright

David Wright

question. a have I everyone. morning, Good

six of year million ended when $XX of highlighted the level inventory. high back I might you go with have You five, years inventory. the

of the kind inventory? about nervousness any level of absolute So

Thomas Florsheim

more, very We and XX deliver I'm you was The years have from has overall feel months last -- shoes been, going the days. bring on going back the really time, historically early. for our over you're about We China, six everything time to like -- it's manageable. if to or transit the in in situation season, which two one, always

that to and three the supply issues up longer it chain than at went that. times, During was months

we confident seasonal and bring have in were early basically inventory. everything goods And we'd to so forced so in we the early, were that bring

of been such revenue show big able part that some competitors the we've that And to we've I had growth and is the have reason our of not. inventory think

larger them past in and to we've on are so discussed we buy forced core quantities we buy earlier, in And calls when that and essentially focus bring merchandise. earlier, to

majority best And inventory sellers. of where it's that is, on so the our

inventory that good and several is seasons. And for so perishable, it's not

happening. chain we what supply And saw so the we -- unfroze, as was

And so we cut our nine buying back months ago.

that this the inventories in $XX to very $XXX so to going back confident is over because the the to of than substantially are And first to going half now. they're be million. not down They're feel we going be year, million bigger our line. lower business our But be

David Wright

curious answer. question, just a Non-financial you as Okay. that Great. Thanks for more I'm consumer. if don't mind.

store, shoes, try So different the Curious let's best in feels ones okay, pair so just stick and about to go fine. I your of do rates. well with one four this e-commerce what's on A you segment, really Florsheim, of five the can't incidence the looks that and returns? you so return or e-commerce. and with

John Florsheim

It's John. the within instance, This is when XX% it to That's industry. of XX%, for the context look the you at brand. on Florsheim about low relatively

they consumers shoe what we brands. they lot I they our of want, fit our repeat think their from a it's benefit They know how size, know purchases.

sites. have to the than tend return the especially we so And lower rates multi-brand industry,

David Wright

record results. thanks Well, taking for Congratulations some on giving there. the for questions. my And me insight thanks

Operator

turn the I'd queue closing I'm like to remarks. further call time. Judy Anderson at for in back no this questions showing to

Judy Anderson

call joining and day. everyone, have great want just say for you, to today, our thank a I

Operator

This participating. conference you Thank concludes for today's call.

may You now disconnect.

Weyco (WEYS) 8 Mar 232022 Q4 Earnings call transcript