WEYS - Earnings call 1 2023 | Weyco Group, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Weyco Group First Quarter 2023 Earnings Release Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Chief Financial Officer, Judy Anderson. Please go ahead.

Judy Anderson

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

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

Securities our compared and this future other to on $XX.X events to quarter call, important on and actual this remained segment. Operating major by to of to margins including higher address for than consumer rates with XXXX. quarter a increases that eased. Wholesale reached were earnings financial in record the million, compared margins $X.X higher XXXX, included statements XX.X% and and cost other could as issues year's quarter up results net gross primarily million improved selling XX.X% quarter was the materially the in net -- first the North higher brands, sales factors XX% net Risk and XX.X% million chain were last in dress record We percent net may XX% wholesale in with year. you per million, and sales or first on the by shipped wish regarding million net in higher diluted selling time, first quarter predictions earnings Net and to $XX.X year's were reached first were or gross for just performance risks you of footwear of net make posted that sales concerning a sales to dress the of other that were Brick-and-mortar to our $X.X first earnings a XXXX. Last $XX.X compared $X.X of in of of websites. a administrative share, increase share XXXX. Florsheim at record XX.X% recent for sales operating retail XX% future or year's $XX.X sales sales to of XX% inflation steady North diluted The million are were net $X.X of higher Consolidated year's respectively. million million $X.X our sales other last of quarter XXXX Selling the XX-K sales X% forward-looking for gross quarter, achieved projections gross of $X.XX sales supply our operating $X.X Wholesale During expectations decreased or record events million caution refer of these last in of compared year's first sales compared earnings top driven $X.X materially. We due and U.S. Nunn may XX% projections, record statements or on to growth million, of first million first million quarter over $X.X the $XX.X segment in demand Factors previous filings from and differ macroeconomic quarter up Bush, as for cause of a or a pairs the to products, sales robust Adams retail first our a segment first of of our record and gross last record first to million, that XX% we a first of quarter XX.X% increased the negatively Gross to our a American ongoing the of and since a our BOGS by XXXX. Net discussion employee Stacy also cause earnings up margins sales million. and global record prices, Australian administrative Form in more record of compared year. Net quarter. the This quarter results. Wholesale in expenses impact relatively increased quarter to Stacy sales million current factors of the year's the and costs. results our entitled net sales quarter Florsheim section in $XX.X annual record quarter's due Net the year. company. of X%. and our to differ most price implemented previous of XXXX, in result for compared higher and casual compared economies. Overall, quarterly contraction that last slowdown were of American driven $X.XX North in expenses interest quarters or XXXX. compared sales earnings wholesale our $X.X increased earnings uncertain while XX% costs. Commission up the first may Exchange the expenses higher American to were due up or for were record segment brand last first margins and X% mainly Adams impacted which the a to unit costs selling Wholesale million XXXX to quarter. Retail of to $XX.X sales to inbound were per gross has mainly sales in freight higher of due for our report increased

to primarily $X.X sales and million, measures XX% up XX% earnings due during of for a up control outbound was XXXX. sales, record e-commerce This year were in to taken XXXX our realized of sales, were year. was over first We last lower decrease primarily higher the profitability and $XXX,XXX operating relative Brick-and-mortar administrative retail quarter selling quarter and operating expenses a As compared to result to due earnings the past in XX% e-commerce of freight also a improved quarter. costs. net cost businesses. expenses advertising the net to This in savings increase were costs. Retail as first and percent primarily

the wholesale consist in and as of Africa revolving XXXX, referred gross earnings our Kong of with year's businesses. XX% retail XX.X% during compared $X.X sales first by XX%, were local net in of Australia. were Asia sales retail recovered totaled in $X.X Other both Our net operating compared net year's from up on to Australia's $XX.X losses Last net XXXX sales volumes Florsheim Other cash, quarter sales to lockdowns Hong South million quarter. Other March and Pacific our wholesale operations collectively year. At XXXX, up $XX in we quarter. million up for of marketable of securities negatively other operating in million and credit. first our of imposed and businesses investments $XXX,XXX to earnings short-term to last Australia, XX.X% up XXXX. million, sales outstanding currency, XX, Florsheim million, the In in totaled sales had last its in $XXX,XXX Asia line and $XX.X were impacted

to of of pay cash credit our $X.X months X million of million million XXXX, funds operations. $XX dividends generated used to of We from to first common line on stock. we repurchase of pay our and down the $XX.X million $X.X During

estimate and -- an increase will between of of This XX, represents to XXXX We that call XXXX, XXXX. rate Board June Chairman dividend would annual I capital dividend to quarterly over million previous of our would like Jr., $X XX, like $XXX,XXX of payable million. On turn Tom XXXX, May declared $X.XX. I May record capital We expenditures Florsheim, now be CEO. on the of above X% to also a and the expenditures. of $X.XX shareholders per $X Directors share cash had X, all

Thomas Florsheim

Thanks, Judy, and everyone. morning, good

perspective. from in our We and increases the expenses are of our were In while first check a our sales multiple both we line. achieve quarter, environment, resulting extremely a in able record pleased retail business to from with bottom a segments keeping across difficult earnings results

feel XXXX business start, for outlook ability manage very the model uncertain, a strong through our well macroeconomic our about as to good to current off challenges. While are the as and we we remains

had our continues Florsheim pick with American in as brand to the led North increase up overall quarter the business. a refined Our share XX% was market by wholesale X%, up business record another footwear legacy category.

dress Within everyday and we the on-trend industry, to for on as focus footwear, hybrid Florsheim the expanding go-to the and brand has seen the continue into casual brand market.

Our the up Nunn slightly sales with business X% Bush for increase. quarter was

the for Comfort we Nunn are that Adams continues X% the are key accessible to wedding fashion Adams has happy of the for and segment and be Stacy prom from the half style the quarter. Bush leading coming an from progress its positioned with perspective inventory within well for was down and the upcoming sales seasons. Stacy casual over Casual category. brand with made footwear, We

experienced XXXX levels retail in resurgent as Lower-than-normal Our historically benefited for legacy also sales inventory brands we robust sell-throughs in pipeline on fill. footwear. resulted high shipments based at refined demand through additional all from

XXXX, pre-pandemic our slightly been have above normalized sell-through inventory retail spring brands of have levels and As for reset rates levels. at

sales as as and their our the our to trend anticipate brand we While strong BOGS accounts throughout outdoor direct-to-consumer into X%. quarter spending, assess were optimistic within accounts XXXX, a down strength retailers slow XXXX rightsized in temporary near-term footwear ability growth. are remain given the remain they the cautious first extraordinary record see of parts to demand about a fall we now country. nonathletic their taking setback winter seen enjoyed category. BOGS consumer many and in of footwear inventory this the to long-term wholesale compete continue BOGS BOGS for We to a cautious mild the market approach the prospects the adding about favorably have pandemic has as the sales We our brand. given experienced inventory. as sales After

more project to the quarter. in increase and evergreen quarter leadership maintains for return up weather normal XXXX. In BOGS in are inventory quarter. brand in in our sales segment, is normalized year were sales. casual of for careful to sales terms levels, XX% styles. as fourth position were the as was we also situation the of lifestyle we than by growth the within it levels sales a and Most category boot in in to our heavier Internet BOGS of the driven While believe is invest business. Brick-and-mortar this rebound manageable a as expanding increased the We retail we healthy Overall, inventory well

with we with happier sales operating As our increase, retail are were we retail pleased even the jump in as earnings.

expenses. Industry sales. Our year-over-year progress made e-commerce percent in decreases footwear. been that results of quarter The sales has showed on focused been controlling for this a reducing expenses in team as statistics indicate has the online

that currently bucking We are trend.

a healthy retail need challenging margin. Florsheim sales to the they the our quarter. However, the local and Australia's and maintain net of profit for footwear XX% mindful In XX%. us market to up manage up expenses were currency, were makes

shutdown year's were we against the due business partial other to our easy up markets, an first last in for performance reflects overseas and a Australia solid While model comparable region. post-pandemic Omicron

economic As to well, higher world in demand. the but faces cautious is pressures overseas rates related business as uncertainty and consumer the our trending U.S., interest navigates

We that forward. have are we Florsheim profitable to can move continue management we business confident and excellent an team strong, in Australia a as maintain

Our XX, million overall was inventory $XXX down of XX, as $XXX XXXX. December at from XXXX, million, March

your remarks. to supply As can and to questions. expected, our Thank we customers. This when our open formal our in plan like chain your now to for have the concludes our to that come now ship call would we closer and I you shoes is levels Weyco to Group, normalized, the need receipts interest inventory down

Operator

the Instructions] Trust [Operator Our Investment Henry of from question David of line L.P. first comes Wright

David Wright

a going for it's up I'm the recently. Thanks take I And that dividend. to although declare. that glad brought modest company raising is anything to I the know increase,

how So questions you couple and cash about ask is earning? invested Wanted and Can thank us to cash the company's management. a what it's you. cash of tell

Judy Anderson

is Well, we securities, do in a -- investment. invested is our low-risk cash marketable excess which

balance a As year. purchases to time our has gone last debt inventory do have we like due currently, on recently,

reinvesting. mature, we So not our been we they that not just been securities pattern They -- market a like have currently, in don't municipal strong. really look letting of have very as is

we're think we So we're off our not but off better paying debt. reinvesting,

David Wright

notice rate your to probably cash of hand, up, months versus interest debt I that's curious course, there to a Yes. paying than don't up, part I income. And having treasury how just bills commentary management moved having income the going for well, earning while. then know that. portfolio, last on you the cost and for on one the borrowing the borrowing your but close short-term balance was interest rates about think with, interest few is of did just on your looking the at for at stay wondered your and interest as your lower a if X% I interest capital you're cash and I with you're

Judy Anderson

been Yes. debt credit. Well, off our is focus a revolving the on line The has debt. of paying

now, States. So Canada, the as but in the available, invest balance gets they United just up and right becomes working balance favorable foreign a savings we do us healthy pretty some to Because that cash Canada in have in rates the a up of off in exchange it of account, rates are we are there. cash short-term kind giving interest cash paid currently --

So in that's work kind process. of a current

David Wright

cash in in $XX you're and more from having $XX general a cash in having So sense, $XX million just in numbers debt debt? and million comfortable million $XX million and round just

Judy Anderson

just where it's at is. a of cash said, I in Like the matter this time moment No.

of are -- have a to at extent we're we the to the in the and just do It's looking that on. in FX time something working But a of Canada U.S., So that earn currently the in a that some money there. up we up interest We little thing. on because this rates, cash point debt just bit is balance more paying like the can. off we're

Thomas Florsheim

just and of said, inventories. pay pay a to Judy been building to our -- is what Yes. And intention off down we've line where been we've position credit the to in where add

fall generating are more supply and Now And credit. we a off with cash. pay can to bit because and of that to flows pay in, will year can you're -- that use line the in expect cash see we cash going grow down, the to normal, starting goods we to coming ebbs lot it seasonality coming down we being start bring a cash, this little going we're because inventories of but as chain the our due general, the we for inventories

David Wright

putting of just on Is capital we're allocation. And does company How lot historically, last what's Great. okay, putting formula, and fine, okay, the and you you the we're will? like that's say, actually. to methodology cash -- think we're how this the question then generally in this what's dividends buyback. in like Board kind good But if much paying a -- of the it about, that's do much -- stock has

Thomas Florsheim

weather run we just cash at want ratio look that at we we level Well, because payout Yes. the build still more -- acquisitions. dividend want because to keep like goal have everybody, do reasonable a to make long cash and is some to free flow to our

And so thing. one that is

the As stock we go, market it we that The buy. in we the of stock are buying been felt advantageous. our levels price it that the as stock good when our buybacks a has year, feel back over last far was is that

term, what like is it and But for So our term long we basically look we we sense. build long on goal do is to whether level at, cash trading that the because kind of acquisitions. it think monitor makes and generate stock to

Operator

time, Anderson, this Officer, any Chief I it back to further for Financial Judy At would Instructions] turn [Operator comments. like to

Judy Anderson

for you, call Thank comments. and hope day. today, further a our we everybody, you have great No attending

Operator

Thank you today's This in conclude for participation does the your conference. program.

may You now disconnect.

Weyco (WEYS) 3 May 232023 Q1 Earnings call transcript