WEYS - Earnings call transcript Q2 2024

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Operator

Good day, and thank you for standing by. Welcome to the Weyco Second Quarter 2024 Earnings 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 first speaker today, Judy Anderson, Chief Financial Officer. Judy?

Judy Anderson

to results. conference welcome second to and XXXX quarter morning, Weyco call Group's discuss Good

call me Florsheim, the Chief Operating On with Executive Chairman Florsheim, Officer. Officer; and Jr., and John President Chief today and are Tom

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

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

factors impact may increased U.S. in and economies. by slowdown are our Australian products macroeconomic reference. interest These on herein contraction in consumer or for a or include, and that factors inflation cost of other They incorporated demand risk uncertain cause rates the the part, our

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

second Net diluted XX% of million $X.X our million from share the last the record sales $XX.X were and second American million, of from in segment Net second record down both million diluted were wholesale quarters $X.X $X.X a XXXX at in per or per $X.XX of $XX.X XXXX. were over in quarter share, XXXX. million previous $X.XX X% Earnings North our year. of earnings or up operations flat quarter

Stacy XX.X% earnings to quarter compared our last Adams BOGS due in and gross higher second sales sales to brands, partially net of Bush lower by and of were sales of of our XXXX offset year. XX% Wholesale net sales Nunn decrease The of the was brands. Florsheim

Gross a earnings the to lower in administrative inventory which for million totaled $XX.X constituted last million million impact and quarter totaled expenses primarily Wholesale up as the $X.X costs. selling margins of for million $X.X result periods. $XX.X margins. sales both net from X% due XX% of operating Wholesale improved gross compared to the quarter, year, in XXXX, higher of

Retail XXXX $X.X and second XX.X% our the in segment in million gross quarter. was net of respectively. in the to second and freight advertising quarter earnings sales in were XX.X% retail quarters decrease retail costs. a and operating both selling expenses Retail administrative $X.X at 'XX, earnings higher and were flat year's The were Net sales of down XXXX from and as million percent second of year. last $XXX,XXX, this due web XXXX. primarily

historically of Web last quarter charged website. to benefit of our in increased due reallocation to expenses second expenditures second wholesale year's the primarily the quarter certain in advertising that our segment XXXX compared

Our Asia collectively Pacific, other retail and operations historically wholesale to as Australia, Florsheim businesses Australia. included South Africa referred in our and

are We region in Asia ceased XXXX of business. that Pacific in winding operations in and final the down the stages

last of that gross Florsheim from were reflect to quarter quarter Florsheim XX% down Australia's results net were $X.X sales Africa. XXXX compared of the operating Australia result, of for million other in Net of South Australia year. a of of net earnings sales and XX% XXXX. the the the As category primarily sales $X.X XX.X% second million,

to the year from marketable million Canada. for included result our million, income of cash totaled $XXX,XXX At and XXXX XX, $X a lower year's June credit. of sales. and balances $XX.X million the XXXX, in revolving $XXX,XXX Its the and in compared last earnings quarter. period earned line our on totaled This on last Interest quarter debt interest as securities totaled $XXX,XXX down operating year second $XX of outstanding higher in we U.S. cash second had no

first the of million we in XXXX, generated operations from During $XX.X months and million dividends. to pay of used funds X cash $X.X

of will stock We and million also be capital and XXXX expenditures between $X.X expenditures. million. We repurchased $X of capital annual company had that estimate million $XXX,XXX $X

would our Jr., a XX, Chairman $X.XX XXXX, turn September like the cash I over and CEO. of X, of on XXXX. declared August now XXXX, to dividend Board to shareholders On Directors all payable per share to call XX, of record Florsheim, August Tom

Thomas Florsheim

And Judy. good morning, Thanks, everyone.

environment We especially economic for performance, footwear. discretionary given are wholesale pleased purchases like with challenging the our

were brand operating higher driven shipments and X solid total able X% the deliver for While increases were to earnings quarter, brands. down gross we our registered with improved we by wholesale of margins

conservative As the to year, bookings. in enter their back of future approach remain we the order many retailers half

encouraged business, strength are our "at and by we an in inventory the we the uptick demand. positioned consumer to once" well are we leverage However, believe right of with

with wholesale up and Bush legacy XX%. respectively, slightly X% and increased in Our X%, business and down Stacy Florsheim the second quarter Adams Nunn

to quarter. to The partially timing Bush increase a due Nunn second large for to third shift was retailer shipments a of from

in challenge and and their dress dress presence traditional the faced the but refined footwear segment. brands comprise a of position market. The maintaining footwear shrinking strong meaningful a while casual casual expanding legacy Our categories

brands up value the well with all consumers. done We fresh, X that product great offering relevant in have share with picking over by designs resonate legacy market years

growth perspective, on position brand's and casual lifestyle While navigate in the premium more on consumer places to and we pandemic. From to a footwear, a we ability each comfort. the during aesthetic appeal term athleisure the versatility that who to accelerated long over product on that medium focused dependent is remain introducing maximizing committed styles today's to leadership are our hybrid refined

success evident is most Our in categories our websites. these on

direct-to-consumer dress-oriented has our started also their than of inroads sales make and footwear. to Bush volume true footwear. selling Adams, Florsheim hybrid Nunn and half from brand most more hybrid casual now Stacy derived

we all X brands offering. As we forward, move a benefit from more product expect to balanced

XX% for quarter. the a BOGS business decline experienced Our

the noted outdoor previous market of relatively has inventory by oversaturation in been As affected X quarters, boot mild in winters. weather

the working months upcoming have of seeing early inventory season. wholesale in needs. XX We and now to cautiously inventory retailers last as are signs fall their the normalize renewed Retailers their key demand levels, we optimistic the spent as evaluate selling remain we approach U.S.

vulcanized suitable focus in current Our the is workwear a introducing a significant as to seamless year-round category, as enhance insulated should construction BOGS use presence traditional durability These in construction serve offer we from lighter business. boots boots May. and the and than is brand's through September seamless more more the our boots farm footprint for differentiator with which channel. expand We're ag twice of the for

Retail generated are our sales, mainly websites by were which for flat quarter. the

the Nunn have price-sensitive declines increases. and environment. experienced for and We are Florsheim more Adams encountering Stacy while low single-digit Bush a slight quarter, BOGS competitive

is for e-commerce We continue growth to invest sales. in in that our considerable online believe room platform future there and

compared Three Florsheim results retail. Australia in same was Approximately period impacted fewer the attributable Australia's loss of quarter. quarter of wholesale a in customer. were at business a our the sizable XXXX. closing environment late XX% for down at to and were to stores operated last of also the Sales Pacific by half the the year Asia the decrease challenging

for reduced in their U.S., housing, facing inflationary Australian and to in on footwear necessities leading basic as discretionary pressures consumers are spending items apparel. everyday the counterparts Like such

We while our and to are around costs, retail turn controlling our focused wholesale on working Australian both businesses.

at $XX March million XXXX, as June was up Our $XX.X XX, XX, overall from million of inventory XXXX.

to As discussed conference we last the and our "at up support needs once" in inventories business. in are of our to meet bringing call, our Fall process

Our be third higher the quarter. level, we of the and end inventory forecasting is good it a currently to at at slightly are

formal gross level. overall margins remarks. at margins up were from feel year. last the XX.X% concludes We quarter, This Our healthy XX.X% are a for our our

and Thank like your would now Weyco to your you interest for Group, the call in questions. open to I

Operator

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

David Wright

another great on quarter. Congratulations

be to and than hear economy. deliver better about chug overall You given along what continue you the results might expected

So congratulations.

Thomas Florsheim

it. appreciate We you. Thank

David Wright

share, and the drawing effort the the that for put having you thanks you and is appreciated. also, script And that it obvious up the information call into really

Thomas Florsheim

shareholders. it's need for something for feel thanks acknowledging that we that. We to do that But

David Wright

ask, is but just business? obvious so of What once" it's kind face, I'm "at not to confused. on wanted its I

Thomas Florsheim

retailers. "At once" business is having from without business ahead that orders comes in

large of the orders So will give retailers for future. most the us

now, right out we're So booking spring 'XX.

if we're especially supply in will too into ran like then their season So that And where environment into once an forecasted now, give situation the their their orders bit by much all caused haven't for enough fill they chain have spring. the had issues. which still in we their getting quite when was the memory, next and inventory retailers give they XXXX orders inventory, into us get when they right us a retailers they

when future to comes And so because giving of that, they're very conservative it bookings. us being

that And right to so does means are. they retailers there's the to is where trend of doesn't is hope go more when going the used "at kind want business there what of the where to committing once" that instead than the future. us it trend on It's need be but trend, in forever, now, retailers that have We inventory be. to actually, a it

having So mean business order retailers. comes for in by is with orders a business just that without once" "at what an we ahead

John Florsheim

conservative be want fall, sit get BOGS with it to once" then is you of that. now mild every we're a so to just of fair This winters. we on is to And retail amount do. and would where BOGS, being the there's winter, but based I going And lot last the of what previous a John. on "at dependent more years or because a lot right back trades once precipitation X year, get than kind example early A see at business. last great the of weather retailers add business if

David Wright

Okay.

to sort you business and coming that on-demand of how it's you're be can might much trying it gain so right? just meet in So

Thomas Florsheim

these kind business "at are we once" the on do we we And where have retailers styles. been best the XX% buying of of XX-XX the it's of do and lot at what Exactly. rule, good that forecasting of a pretty needs is

we to the stock what know inventory. we in use we're be to is styles on do that able so going inventory And extra we those

It's some seasonal like not the perishable goods. of

And business. retailers "at " to us And take so to that on that position we're the count a do really the of advantage once today. in

David Wright

And retail, you the in recall and things issue trade up right. a I costs but wonder mention and costs called the freight of cost was putting pandemic, in issue? an big was do wholesale, freight inventory is still out really I generally, during you lower All and

Judy Anderson

their back high very come the definitely have experienced we when was peak costs freight was down from XXXX that Freight cost. in

of kind we those costs as had that XXXX, in worked However, those were costs the freight higher through experiencing still higher freight we inventory attached.

we're XXXX. higher that we So anniversarying compared when hangover at right XXXX, look XXXX were now last kind year to still costs from some freight of

XXXX. freight But late by costs normalized

at be more kind time. to kind we this It's level we're and of our some flow So should stable of through for starting it's inventory. down when I been just normalized

David Wright

call of inventory? the off last working that, you're So we'll it, higher-priced

Judy Anderson

We worked into lower well, it now -- correct. the we're and year, off you're last actually,

year. higher inventory be correct. You're anniversarying still cost about We'll until this the October of

David Wright

these been been is It everything done -- you thinking impressive just when has one that's bit few of little really a able to squeeze continue be might last to be be margin could out done. quarters, that

you finding some extra places to squeeze. So can I keep hope

are do in mild what winters. been the on and those what versus with the the is And sales mentioned was to sales geographic look But correlate where to at in weather winter geographic. concentration the you is you My BOGS. your Has and the you for like be try making going there of question winter, Tom, last most up wonder, BOGS where obviously, obviously geographies I you weather then the are. historically you

every get the few know but all. The sort You Mid-Atlantic, years like places winter. doesn't they getting the you're winter virtually no other snow of year at some going Mid-Atlantic, last to stop get

how geographically you curious look BOGS. I'm at So

Thomas Florsheim

the And which season, year definitely was best weather. geographically even in the at fall light the we are that where the temperatures last look do the warm. get very and more areas Midwest, in Yes. our No, areas is in high our were it snowfall we

the the dependent of need reality the product build going weather. less just it's to sell be we to is that's and on situation So

when sells really the we're on a not footwear now, a way city and one farm ag that we're penetrated is more right functional a is than, where which why BOGS that only that's snows. that channel people say, that by are boots used in big it channel people in in and buying And like focused

business that so to insulated get is you footwear build that is milder winters. we're want really is just in it so And trying these what that also more to more appropriate functional. lighter And do

assume to it's really to going have of pattern. because continue kind been We see we're that this the

a over X look mild last years, or XX If you lot the we've of winners. had

product trying will And build so and temperatures. that that to we're will appropriate milder a sell those be in

Operator

am Officer, no I questions the this for closing further I would Instructions] showing Chief Financial Anderson, now like over Judy call turn to [Operator time. at to remarks.

Judy Anderson

just joining us have everyone, We you, you a today, for we thank to great say wanted day. and hope

Operator

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

You now may disconnect.

Weyco (WEYS) 7 Aug 242024 Q2 Earnings call transcript