WEYS - Earnings call 4 2023 | Weyco Group, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Weyco Group, Inc. Fourth Quarter and Full Year 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, Judy Anderson, Chief Financial Officer. ahead. go Please

Judy Anderson

Chairman welcome, discuss and On Weyco conference Chief Florsheim Group's call Tom Officer; Good President Florsheim, quarter everyone, and to and Jr., Tom are fourth me Officer. results. Chief full call Executive with and morning, Operating today to and year this XXXX

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

the concerning statements future you other call, performance forward-looking projections statements differ future we events actual current our that predictions materially. this company. and During the may that or expectations which to Factors materially financial caution important entitled of or Risk of factors the We are could may regarding to results events recent factors reference. We in and make wish and just you herein risks annual projections. our our section are differ a Form to provides incorporated actual results by that discussion most refer risk XX-K These cause from our report on these

record earnings compared of to mainly net were operating margins XX% earnings They of rates or part, gross sales $XX.X fourth demand for Increased due Consolidated American in slowdown our U.S. gross costs wholesale in contraction products XXXX. of our Net increased for to the fourth earnings economy. XX.X% of factors to XX.X% our of down down and net the million. interest impact include, quarter or inflation compared million, the million, in the quarter to segment. other quarter million may cause sales in fourth $XX XX% fourth consumer higher macroeconomic of the compared net last that of sales a $XX.X were in sales quarter XXXX operating to Australian quarter and year's on Quarterly North for uncertain $XX.X last year's

were for for quarter the $X.X the Wholesale quarter million XXXX. $X.XX fourth the share In million net was brands a $XX.X compared per quarter weaker due diluted North decline but $XX.X a sales XX% or legacy or our last result the Net million sales to sales, per earnings in due also of The $XX.X to BOGS diluted decrease down of were demand. $X.XX across XX% as American share for from to million, year. decreased segment, primarily

gross quarter compared quarter XX.X% last of administrative compensation. earnings inbound inventory selling sales year's Wholesale year. the sales the a quarter. to $XX.X $XX.X costs, lower of largely to mainly Wholesale for due net as in XX.X% primarily of were margins freight. The million Gross and costs, decrease for net million fourth compared improved last employee result was commission-based expenses totaled lower to

sales, selling earnings primarily segment last lower year. XX% As of quarter in down $X.X to for American sales. and operating a the in million compared quarter, sales Net million sales year. North due $XX.X quarter, the were XXXX, $XX.X X% percent record million million for wholesale of Wholesale totaled to administrative our retail the compared last versus for down or XX% XX% net $XX.X expenses totaled to

the website down respectively. sales web costs. compared to net XXXX, The percent decrease XX.X% of and and totaled e-commerce Retail lower million advertising primarily XX.X% of a quarter XXXX as was were demand. $X.X was and $X.X expenses of result a quarter as of million earnings primarily the on fourth in lower due as year, for Retail selling gross result administrative -- last BOGS the a

of record X% in the administrative flat sales, selling retail XXXX, Retail net XXXX. fourth million in $X.X earnings over at operating up both As year. XX% and a quarter of expenses and year in a this percent were last reached $X.X million

consist of and of quarter The South to in other wholesale operations Australia. in costs Africa Florsheim and lower businesses XXXX. Pacific, referred -- from our as Asia earnings fourth collectively retail the resulted our improvement Australia, The

the in we region operations winding previously disclosed, ceased as of in this XXXX Asia the and However, down business. Pacific final are stages in

Florsheim net lower down. region Pacific the year. of Florsheim $X.X of of but were XXXX. loss wind million, Australia's quarter million XX.X% retail were $X.X were fourth Asia mainly the Australia also Florsheim to due compared quarter gross the XX% fourth quarter net of Australia XX% the from to down this in earlier in its XXXX. a currency, Australia's XX.X% result wholesale of sizable down to due sales In Net a in of sales sales as the for earnings local in sales customer

quarter earnings to operating year, lower million volumes last due compared Its were year. sales this $XXX,XXX $X.X the down to for

our year net to XXXX year, full year for in sales Net was per diluted year. segment. North American over of our sales. to were in record XXXX. XXXX. record earnings in discuss were $XX.X higher XX% in million North sales wholesale gross million, $XXX.X in sales now XX.X% net increased up brand $XX.X sales BOGS share a will or lower to in earnings million XX% last XX.X% record record operating wholesale XXXX, compared XXXX diluted the The earnings Full results. X% decrease previous and in despite record were $XXX.X million share down XXXX or due per to $XX in sales up a $X.XX $XX.X sales XXXX. American compared to X% Consolidated for decline to down were primarily the million sales compared of XXXX, $X.XX XX% in compared net $XXX from XXXX year our We to margins million, a of The gross million due last Consolidated record mainly of full

in Stacy were were Sales in XXXX. also percent margins lower $XX.X XXXX lower to XXXX. primarily growth primarily due million of earnings employee of costs, and to was costs, net gross Florsheim totaled down administrative inventory as selling Nunn inbound brands XXXX freight. prices following $XX compared Wholesale and in Adams, selling sales Bush the in in increased due of XXXX Gross The year. mainly compensation. result a last lower and year for and the commission-based Wholesale XX.X% as decrease strong to demand million a improved expenses XX.X%

primarily a of earnings wholesale Wholesale sales, percent XX% were higher sales in a expenses our websites, margins record to XXXX. North offset of record $XX.X over across selling in over the million reached X% In increase operating legacy by brands XXXX. our $XX.X previous of up due was million and sales partially sales on lower record The at XX% $XX.X previous down stores due net BOGS $XX XXXX segment, and XX.X% of website. domestic our in Retail XXXX, X net of administrative million record net administrative in American XXXX. up XXXX sales in and were a year. net our to and were in gross higher for the expenses. in sales XXXX, As Sales X% XX.X% lower million and were gross XXXX, in brick-and-mortar earnings our selling retail X%

The million operating Net to increased million web up selling totaled totaled for million $X.X Australia XX% XXXX. XXXX, sales. net sales $XX.X down of achieved due $XX.X $XX.X Retail -- administrative year. to at in the XX% earnings XXXX, over XXXX, increase in sales of the from Florsheim in in XX% year million mainly million $XX.X in expenses sales or net X% of The segment last and to $X.X record million retail compared or

partially In wholesale businesses by XXXX, XXXX in currency, Australia's as down the Australia's sales net higher result down offset net customer of Florsheim gross wholesale net of mentioned were in Australia, local net sales in $X for year, to XX.X% the Florsheim XXXX in businesses. in X% earnings a previously $X.X sales with XX.X% a lower sales across its and retail sales. loss sales It's earnings versus its due million million operating of XXXX. were in totaled down of midyear

cash our had At and million December $XX.X on revolving credit. debt totaled of million, no securities we XX, $XX marketable and our outstanding line XXXX,

operations line During used to of levels. million reductions we off and our and $XX.X in dividends common $X.X of earnings credit million pay $XX.X to stock. million million pay cash repurchase net mainly XXXX, to from $X.X due our on to inventory generated We funds in of

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

Thomas Florsheim

Good morning, everyone.

on experiences consumers retail more Judy As year. were down shipments services. as footwear sales and of versus last as a fourth in apparel slowdown our environment strong overall experienced spending remains difficult income for quarter discretionary XX% their wholesale are The a mentioned, and we

in to turn their cautious are being inventory regards levels. Retailers in

challenging XXXX. boot XXXX. We year. disciplined to winter with and period cut in We market are outdoor XX% an their by we and tough in as the in for market a the early quarter taking industry, achieved wholesale our while inventory made the operating combination integrity XX% our XXXX believe rightsize inventories. a for and recognize the we were earnings our While price BOGS record a expenses. we our are down approach performance sales overall maintaining in financial fourth throughout throughout remain weather mild with challenging will for in fall outdoor retailers the pleased

on the as business BOGS product rubber sign as innovation rubber forward and the boot of seamless are is twice construction. over an we boots moving seamless our without With boots construction seamless than of measured can BOGS, by XX% any cracking. number with emphasis flexes withstand focused BOGS through comparable vulcanized lighter on durable

for are our This we numerous of future which well line year, are points. us boots and price positions excited technology, sales number this about growth. Consumers retailers across in expanding seamless the

In addition and are we insulated introducing to non-insulated lightly -- the seamless our also new collection, expansion footwear. of

is dependent the So BOGS inclement brand on weather. less

down and The for the and latest X% business for sales for At X%, legacy the quarter declined Florsheim, XX% casual Bush XX%, overall for all level, the decline year. Nunn footwear. for in and Stacy dress X general respectively, the the of were dress year. quarter brands slowdown and a XX% the brand Our XX%, Adams in XX% respectively, and X% market and reflects and

a a many return cycle greater In as supply normal see part addition, to to flexibility. chase strategy chain shipments after more and in our legacy of our business maintain partners demand of shifted of a the a delays. in heightened to decrease order of inventory retail We period have

the continue We anticipate this first trend XXXX. half through of will

major first through the the as account XXXX a strong rekindle to at operating Our continue as soft remains view Retail growth wholesale down year. in due diversify demand solid, a expand earnings. focused for was were our by We for to a in well dry In are challenges for and the fourth online the the Australian and our consumer The up in BOGS our our segment, presented to headwinds retail all were invest for down offerings. business The Australia's as and growth. local we We our and the Florsheim hybrid reducing loss in performance we primarily believe decline retail assess sell-throughs had a and sales in as continue mix net half but expenses X% a across direct-to-consumer X% fourth weather. warm market. quarter product and opportunities driven quarter while XX% sales we quarter, of direct-to-consumer platform. brands of online currency record as on opportunity casual decrease year. unseasonably well the sales our XXXX with anticipate company Overall, increase to solid to X% X

business process As Australia transitioning the in and previously to our office Asia discussed, December division. Kong wholesale we of Pacific the Hong in are closed

was $XX.X from XX, at level million $XXX XX, down inventory Our XXXX, XXXX. million December at December

better the third in-season quarter level down for discussed turn. that a have we our with balances brought inventory As in to availability inventories call, orders

For overall XXXX XX.X% were in margins gross XX.X% year, the and in XXXX.

level. margins forward, a remain Going expect we our at to healthy

Judy our marketable of cash securities. As and resulting million flow discussed, $XX.X balance in strong, cash in a in was XXXX

and put look We use. to cash to at potential options our acquisitions continue other to

platform distribution that equipment the installed Milwaukee. the fourth of XXXX, in peers. have we In built invest in quarter single of to and labeling we continue also We the process packing automates

in XX new allows to efficiency service With formal growth minute, XX a for us Xx than gaining now concludes processing previously. remarks. approximately call and to of open our give singles This Weyco questions. significant area speed faster in your like of I is and business, savings. peers which would to Group, per to process allows at the our e-commerce us ship a rate equipment to drop with labor this faster you Thank your This the interest

Operator

it Henry And like Trust. our the to Instructions] line first looks David Investment going with come [Operator from of question Wright is

David Wright

mean congratulate after you, to to tax. compliment to pretty million be make good $XX got wanted I a first off, feeling. and I that's

years the last ago millions. had of high kind the elevated if were So of back really you sort you of on net XX look results. couple same But making years, teens revenues, the you

So as a stockholder, I say you. thank

Thomas Florsheim

for that. We it. Well, acknowledging thanks appreciate

David Wright

Okay.

On Judy, can where you the down that's geographically? cash, break held

Judy Anderson

it of invested account. it money we have in a U.S., majority market and The is the in

between So and on we're X.X% X% that. earning

also We in Canada same some cash do earning the have about rate.

David Wright

Well, those you were interest of are your a And interest very can Okay. have it. earnings to double money, get places couple to expense. good your your

options, you the Board Further cash, other Tom, So that's do of acquisitions capital mentioned sort return? the too. a when good include on and result, options the other considering shareholder

Thomas Florsheim

our has right because different And actually had we've ask up, the all special a piled we dividend. couple problem. that cash us a good a recognize at looking of are options about investors We is which now

So we're we're if We're we additional that. M&A. have flexibility a -- considering that our good like And in for feel we want We're slightly. still reduce place considering buybacks. balance to sheet, our for cash stock with even the we still

just to that recognize really this best sheet So use in on we we're figuring have that ways the we And we need a point, now, -- it. we more we're cash say way. do out I'll trying right at our shareholder-friendly to and than balance

David Wright

great. elaboration. That's Thanks Okay. the for

me, indulge demographic just you'd have a If kind I of question.

a a the wear tie pretty economy I'm there's that, and preceded to dress the and white-collar you call stable, back XX look yes. that sales had shoes, job you and And you ago, growing over when the made suit with little more dress people. say, a If it, decades, probably years fact with going shoe that

way sorry x XX can curious dress, the quantify to what I'm professional years quantify if dress ago, you style? traditional sales were your that dress sentimental, but so XX% in those office any any lace-up changed leather to or dramatically, decline particular if dress, products are today And has in be there's shoes of way that

Thomas Florsheim

I of Yes. look has us as When XXX% you're is that traditional what we with numbers we bottom. a nice is means really last right dress are And talked but And nice the kind hybrid. different. our have don't dressy what upper the drastically correct. the more shrunken hybrid, completely with XX with dress what with finish, -- at seeing mean we now, of people classic in shoes about years. exact script, And that today dressy a fit kind over but wearing business, sporty are casual

I'm sure people talk we with XXX% ties. referring dressy the growth want bottoms, not huge you're suits shoes but wearing because with That's about we're category seen wearing mean nice what a of has soles. correct. white white you've to a men lot hybrid. still and the when office, I They're they to That look the at

at that clothing. goes something need to that accessory And shoes with we clothing. an so they as And look

to of wearing. So what are a people we lot pay attention

years, clothing. been evolve so probably go successful, product. growing our continue than the adjust over order we've with we we in our to to recognize they brands trying more And going and have keep that back to to decade, the And be a really

like when XX% even And totally Nunn Nunn look casual, Bush not we example, hybrid. is like what sell Bush, you for at in of brand so casual, a casual,

some have traditional and but hybrid, dress, have casual. We we XX%

side. we've into the shoe In we casuals, called casual roads with a good have made like kind boat of Florsheim, more true offerings head type lake

active have casuals. We

have check that's then We the satellite. could on called we shoes website out of like that lot a one Dash. hybrid And have our a new you

continuing are we to evolve. And so

Adams, more to still Stacy we're with skews develop working dressy, Stacy more but hybrids. And Adams

a in successful We Stacy right Synchro have called hybrid the now.

more it, And right the more to new your look lifestyle-oriented, change. and way are it and that's become we going evolve of together so and with at you we're statement, to every people to this we are and more line original XXX% time dressing continue very casual-oriented continue that's to aware because is put a

go down are convinced it's to path. that continue to going We

David Wright

moving done results job you've the and the with line great a the Well, that. show product market of

elaboration the there. for thanks So

one. conference don't up Okay. missed lot for the really maybe the listen, people I I a you but calls. show last Well, them. appreciate I I sorry, of having know really I'm them, appreciate

I you so for thank And that.

Thomas Florsheim

Thank you.

Judy Anderson

Thank you.

Operator

remarks. [Operator Instructions] at further like this I I'm showing no would to to conference for any questions turn time. further the And over Anderson Judy back

Judy Anderson

support today for Thank our us you, joining your company. you. a Thank Have and everyone, great for day. of

Operator

you This for concludes disconnect. today's Thank now conference you and participating, call. may

Weyco (WEYS) 6 Mar 242023 Q4 Earnings call transcript