Weyco Group Q4 2025 Earnings Report

Weyco Group EPS Results

• Actual EPS: $0.91
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Weyco Group Revenue Results

• Actual Revenue: $76.80 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Weyco Group Announcement Details

• Quarter: Q4 2025
• Date: 3/3/2026
• Time: After Market Closes
• Conference Call Date: Wednesday, March 4, 2026
• Conference Call Time: 11:00AM ET

Weyco Group (NASDAQ:WEYS) is a publicly traded footwear company (NASDAQ: WEYS) based in Glendale, Wisconsin, that designs, sources, markets and distributes branded footwear products. The company operates through a portfolio of five consumer brands—Florsheim, Stacy Adams, Nunn Bush, BOGS and Rafters—offering a full range of dress, casual and performance footwear for men and women.

The Florsheim brand, with roots dating back to 1892, provides classic and contemporary men’s dress shoe styles, while Stacy Adams and Nunn Bush deliver fashion-forward and casual offerings. BOGS specializes in waterproof and insulated boots for work and outdoor recreation, and Rafters offers seasonal sandals and flip-flops. Weyco Group oversees design and quality standards for each brand, outsourcing production primarily to third-party manufacturers in Asia and Mexico.

Weyco Group distributes its products primarily across North America through department stores, independent shoe retailers and direct-to-consumer channels, including e-commerce platforms. The company leverages longstanding retail relationships and invests in targeted marketing to support each brand’s positioning within its respective market segment.

Headquartered in the Milwaukee metropolitan area, Weyco Group is managed by an experienced leadership team with deep footwear industry expertise. The company emphasizes brand heritage and innovation in materials and comfort technologies as it seeks to expand its presence in core U.S. and Canadian markets.

Weyco Group Q4 2025 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Tariff and legal uncertainty: Weyco paid about $16 million in incremental IEEPA tariffs in 2025, has filed suit seeking refunds after the Supreme Court ruled the IEEPA basis unlawful, but faces a new 10% across‑the‑board tariff — leaving near‑term gross margin risk.
• Negative Sentiment: Sales and profit declines: Net sales were down ~5% in both Q4 and FY2025, gross margins compressed (44.1% Q4; 43.2% FY) and operating/net earnings fell materially (Q4 operating down 12%; FY operating down 20%).
• Positive Sentiment: Florsheim strength: The Florsheim brand reached a record $92 million in wholesale sales in 2025 and gained market share, driving resilience amid weaker results at other brands.
• Positive Sentiment: Healthy liquidity & shareholder returns: Weyco ended 2025 with $101 million in cash and marketable securities, no revolver borrowings, $37.3M cash from operations, $5.3M of buybacks and substantial dividend payments/declares.
• Positive Sentiment: Inventory and supply‑chain progress: Inventory fell to $65.9M (from $74M) and the company accelerated diversification of sourcing into Cambodia and Vietnam to reduce China concentration, improving operational flexibility.

Presentation

[Operator]

Good day everyone. Welcome to Weyco Group Inc.'s fourth quarter and full year 2025 earnings release conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To participate, you will need to press star 11 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, simply press star 11 again. Please note this conference is being recorded. Now it's my pleasure to turn the call over to the Chief Financial Officer, Judy Anderson. Please proceed.

[Judy Anderson, CFO at Weyco Group]

Thank you. Good morning and welcome to Weyco Group's conference call to discuss fourth quarter and full year 2025 results. On this call with me today are Tom Florsheim Jr., Chairman and Chief Executive Officer, and John Florsheim, our President and Chief Operating Officer. Before we begin to discuss the results for the quarter and year, I will read a brief cautionary statement. During this call, we may make projections or other forward-looking statements regarding our current expectations concerning future events and the future financial performance of the company. We wish to caution you that these statements are just predictions and that actual events or results may differ materially.

[Judy Anderson, CFO at Weyco Group]

We refer you to the section entitled Risk Factors in our most recent annual report on Form 10-K, which provides a discussion of important factors and risks that could cause our actual results to differ materially from our projections. These risk factors are incorporated herein by reference. They include, in part, the uncertain impact of U.S. trade and tariff policies, which remain highly dynamic and unpredictable, the impact of inflation on our costs and consumer demand for our products, increased interest rates and other macroeconomic factors that may cause a slowdown or contraction in the U.S. or Australian economies. Overall net sales for the fourth quarter of 2025 were $76.8 million, down 5% compared to $80.5 million in the fourth quarter of 2024.

[Judy Anderson, CFO at Weyco Group]

Consolidated gross earnings were 44.1% of net sales, compared to 47.9% of net sales in the fourth quarter of 2024. Earnings from operations were $10.2 million for the quarter, down 12% from $11.5 million in the fourth quarter of 2024. Net earnings totaled $8.7 million for the quarter, down 13% from $10 million last year. Diluted earnings per share were $0.91 per share in the fourth quarter of 2025, compared to $1.04 per share in the prior year's fourth quarter. Net sales in our North American wholesale segment totaled $56.7 million for the quarter, down 6% from $60.4 million last year.

[Judy Anderson, CFO at Weyco Group]

Sales were down due to lower shipping volumes, partially mitigated by our July 1st 2025 price increases. Wholesale gross earnings as a % of net sales were 37.2% and 42.4% in the fourth quarters of 2025 and 2024, respectively. Gross margins for the quarter were negatively impacted by incremental tariffs. Although selling price increases helped mitigate the effect of these tariffs, they did not fully offset the resulting costs, leading to margin erosion for the period. Wholesale selling and administrative expenses totaled $12.7 million, or 23% of net sales for the quarter, versus $16.7 million or 28% of net sales last year, down largely due to lower employee costs this year.

[Judy Anderson, CFO at Weyco Group]

Wholesale operating earnings totaled $8.4 million for the quarter, down 6% from $8.9 million in 2024 due to lower sales volumes and gross margins. In early 2025, the U.S. imposed reciprocal and retaliatory tariffs on imported goods. Throughout 2025, these incremental tariffs increased the cost of our products by 19%-50%, resulting in gross margin compression. On February 20, 2026, the Supreme Court of the United States ruled that the International Emergency Economic Powers Act, also known as IEEPA, does not authorize the President to impose tariffs, invalidating the statutory basis for incremental tariffs enacted since February of 2025. The matter has been remanded to the United States Court of International Trade for further proceedings, including issues related to implementation and potential refunds.

[Judy Anderson, CFO at Weyco Group]

We paid approximately $16 million of incremental tariffs in 2025. In December of 2025, we filed a lawsuit seeking a refund for amounts paid in connection with incremental tariffs imposed pursuant to IEEPA. The President responded to the Supreme Court ruling by announcing the implementation of a 10% across-the-board tariff under a separate statutory authority. The administration has indicated that rates may be increased further, subject to statutory limits. Certain other tariffs imposed under authorities independent of IEPA remain in effect. U.S. trade policies remain fluid and unpredictable, creating near-term gross margin uncertainty. We have mitigation strategies in place and will continue to adjust as needed in response to future policy developments. Net sales in our retail segment totaled $13.3 million for the quarter, down 5% from $14.1 million in 2024.

[Judy Anderson, CFO at Weyco Group]

Fourth quarter 2025 sales were negatively impacted by an increase in sales reserves related to our e-commerce businesses. Retail gross earnings as a percent of net sales were 64.3% versus 65% in the fourth quarter of 2025 and 2024 respectively. Retail operating earnings totaled $1.9 million for the quarter and $2.5 million in last year's fourth quarter. The decrease was primarily due to the sales reserve adjustment described earlier. Our other operations consist of our retail and wholesale businesses in Australia and South Africa, which are collectively referred to as Florsheim Australia. Net sales of Florsheim Australia were $6.8 million in the fourth quarter of 2025, up 12% from $6 million in 2024.

[Judy Anderson, CFO at Weyco Group]

In local currency, Florsheim Australia's net sales were up 11% for the quarter, driven by growth in both its wholesale and retail businesses. Florsheim Australia's gross earnings as a percent of net sales were 61.5% and 62.5% in the fourth quarters of 2025 and 2024, respectively. Its quarterly operating losses totaled $100,000 in 2025 versus operating earnings of $100,000 in the prior year. We will now discuss our full year 2025 results. Consolidated net sales for the full year were $276 million, down 5% compared to sales of $290 million in 2024.

[Judy Anderson, CFO at Weyco Group]

Consolidated gross earnings were 43.2% of net sales, compared to 45.3% of net sales in 2024. Full year 2025 operating earnings were $29.2 million, down 20% from $36.6 million in 2024. Net earnings totaled $23.1 million, down 24% from $30.3 million last year. Diluted earnings per share were $20.41 per share in 2025, and $3.16 per share in 2024. North American wholesale net sales were $217 million in 2025, down 5% compared to $228 million in 2024.

[Judy Anderson, CFO at Weyco Group]

We are pleased to announce that despite the challenges of 2025, our Florsheim brand achieved record wholesale sales. Sales of our Nunn Bush, Stacy Adams, and Bogs brands decreased in 2025. Wholesale gross earnings as a percent of net sales were 37.5% in 2025, and 40.2% in 2024. Gross margins for the year were negatively impacted by incremental tariffs. Wholesale selling and administrative expenses totaled $54.6 million for the year and $60.1 million last year, down largely due to lower employee costs. As a percent of net sales, wholesale selling and administrative expenses were 25% and 26% in 2025 and 2024, respectively.

[Judy Anderson, CFO at Weyco Group]

Wholesale operating earnings totaled $26.6 million in 2025, down 16% from $31.5 million in 2024 due to lower sales volumes and gross margins. In our North American retail segment, net sales were $35.7 million in 2025, down 8% from a record $38.7 million in 2024. The decrease was primarily due to lower direct-to-consumer sales of Florsheim, Bogs, and Stacy Adams footwear. Bogs website sales were also impacted by fewer promotional activities in 2025. Retail gross earnings as a percent of net sales were 65.7% and 65.9% in 2025 and 2024, respectively.

[Judy Anderson, CFO at Weyco Group]

Retail operating earnings totaled $3.3 million for 2025 and $5.3 million last year. The decrease was primarily due to lower sales volumes. Net sales of Florsheim Australia remained relatively flat at $23.7 million and $23.6 million in 2025 and 2024, respectively. In local currency, Florsheim Australia's net sales were up 2% for the year, driven by growth in its retail businesses. Florsheim Australia's gross earnings as a percent of net sales were 61.5% and 61% in 2025 and 2024, respectively. Florsheim Australia generated operating losses totaling $700,000 for 2025 and $200,000 in 2024.

[Judy Anderson, CFO at Weyco Group]

Our effective tax rates for 2025 and 2024 were 28% and 23.9% respectively. Our 2025 income tax provision included a charge to establish an evaluation allowance on Florsheim Australia's deferred tax assets. Our 2024 tax provision was reduced by deductions related to share-based compensation. At December 31st, 2025, our cash and marketable securities totaled $101 million, and we had no debt outstanding on our $40 million revolving line of credit. During 2025, we generated $37.3 million in cash from operations and used funds to pay $7.7 million in dividends. We also repurchased $5.3 million of company stock and had $1.8 million of capital expenditures.

[Judy Anderson, CFO at Weyco Group]

We estimate that 2026 annual capital expenditures will be between $1 million and $3 million. During January 2026, we paid our 2025 fourth quarter and special cash dividends totaling $21.4 million to shareholders. On March 3rd, 2026, our board of directors declared our first quarter cash dividend of $0.27 per share to all shareholders of record on March 13th, 2026, payable March 31st, 2026. I would now like to turn the call over to Tom Florsheim Jr., our Chairman and CEO.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

Thanks, Judy. Good morning, everyone. Our overall company sales were down 5% in the fourth quarter and 5% for the full year. While we are never content with the decline, given the challenges we face related to tariffs and dampened consumer sentiment, we are proud of the work done by our production and sales teams to navigate these economic headwinds. For an extended period during the second quarter, we faced tariff rates that rendered trade with China, our largest sourcing country, commercially prohibitive. Because the second quarter is a primary manufacturing period for our key fall shipping window, this created a strong likelihood of disrupted deliveries to both our wholesale partners and our direct-to-consumer business.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

By strategically keeping production running on key programs and holding finished goods overseas, we positioned ourselves to deliver nearly 100% of our fall shipments on time once tariffs were reduced to commercially viable levels. Throughout 2025, new tariffs increased the cost of our products by 19%-50%, resulting in gross margin compression despite a 10% increase that took effect in July. Over the past year, we have made significant progress in diversifying our manufacturing base to be less China-centric. Sales of our combined legacy business declined 7% in the fourth quarter and 4% for the year. Given the uncertain economic environment, particularly in soft goods, our accounts continued to take a conservative approach to inventory management, which negatively impacted fourth quarter shipments.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

The Florsheim division reported a 1% decrease for the quarter and a 2% increase for the year. The brand achieved $92 million in sales in 2025, an all-time record, making it one of the few men's brands outside of the athletic category to sustain this level of post-pandemic growth. While the non-athletic brown shoe category has been in secular decline, Florsheim has bucked the trend and gained market share. Sell-throughs of traditional dress and refined casual footwear have been strong, and the brand continues to make progress in the hybrid and dress sneaker categories. Our Nunn Bush business declined 13% for the quarter and 10% for the year. The mid-tier trade channels, which account for the majority of Nunn Bush's volume, remain under pressure, negatively impacting sales.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

As an opening price point brand with major retailers, Nunn Bush also faces increased competition from private label programs as stores seek to improve margins. We believe we're taking the necessary steps to return Nunn Bush to growth, including value engineering product to meet key price points while delivering attributes and benefits not typically found in private label offerings. Retail sell-through of Nunn Bush remains solid. Stacy Adams sales declined 13% for the quarter and 9% for the year, reflecting continued challenges in the fashion dress shoe market. While the Stacy Adams brand remains a leader in this category, retailers are devoting less inventory and shelf space to dress shoes. Our focus with Stacy Adams continues to be on expanding categories beyond its core elevated dress offerings. The Bogs business remains difficult, with sales down 6% for the quarter and 11% for the year.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

While early winter cold and snowfall resulted in strong sell-through of Bogs product, fall sell-in declined year-over-year as retailers maintained a conservative chase-based inventory strategy for seasonal product. Retailers ended the season with exceptionally clean inventories, and we're now seeing strong bookings for fall 2026. While we are optimistic about improvement this year, we remain mindful of the long-term impact of climate change on the weather boot category. Our priority continues to be the development of footwear designed for multi-season use. Net sales in our retail segment declined 5% for the quarter and 8% for the year. In 2025, our e-commerce consumer was increasingly value-oriented. While our overall inventory position is significantly cleaner than the prior two years, which is a positive, it resulted in lower conversion among consumers motivated by clearance discounts.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

As we enter the new year, we remain disciplined in our approach to inventory management and anticipate a lower level of clearance sales. We believe that there is a meaningful opportunity to drive full price sales through improved storytelling across our brand portfolio and clearer communication of product attributes and benefits. Excuse me. Florsheim Australia's net sales increased 12% for the quarter and 11% in local currency. For the year, net sales were flat, increasing 2% in local currency. Florsheim Australia, which includes New Zealand, South Africa, and our Asia wholesale business, remains a work in progress. While certain areas such as Australia e-commerce delivered solid gains, we continue to face challenges in our Australian wholesale business, where improvements are necessary to drive profitability. Excuse me.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

Our overall inventory as of December 31, 2025, was $65.9 million, compared to $74 million at December 31, 2024. We think our inventories are at a healthy level as we move into the first quarter of this year. Our overall gross margins were 44.1% for the quarter and 43.2% for the year. Our margins were down 200 basis points for the year due to incremental tariffs. With the IEPA tariffs ruled unlawful and the administration implementing new tariffs, we're expecting continued cost uncertainty in 2026. We are prepared to continue to adjust our margin and pricing strategy with the goal of maintaining historical margins. This concludes our formal remarks. Thank you for your interest in Weyco Group, I would now like to open the call to your questions.

[Operator]

Thank you so much. As a reminder, if you have a question, simply press star one one to get in the queue and wait for your name to be announced. To remove yourself, press star one one again. One moment please. Again, that is star one one if you have a question. One moment for our first question comes from the line of John Deysher with Pinnacle. Please proceed.

[John Deysher, President and Portfolio Manager at Pinnacle]

Good morning, everyone.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

Good morning.

[Operator]

Good morning.

[John Deysher, President and Portfolio Manager at Pinnacle]

Solid year in a difficult market. Just a couple of quick questions. You mentioned you paid approximately $16 million in incremental tariffs. How much of that did you recover in terms of price increases?

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

I would say, that, you know, Judy, I don't know.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

Our wholesale margin. Hi, John. Our wholesale margin is down about 400 basis points from last year, more or less. You know, we had a 10% price increase, you know, it didn't cover, you know, significant portion of what the, you know, how tariffs impacted our business.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

Yeah, that was John speaking. John, are you looking for a dollar amount?

[John Deysher, President and Portfolio Manager at Pinnacle]

Well, a percentage would help. In other words, did you recover 50% with price increases, 30%, 70%? Just a rough percentage.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

Yeah, it's hard. You know, it's a confusing answer because, you know, the tariffs from different countries varied a lot. You know, the last several months from India, we had a 50% tariff, so the 10% increase, you know, just got us a small percentage of the tariff back, you know. Most of the other countries were at around 20%, but that also varied during the several months of the second half where China, you know, China was originally higher and went down to 20%. I believe it was at 30% for a period, and then it was over 100% for a period.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

The 10%, you know, we took a very methodical approach to increasing prices because we're in a tough market as far as consumer sentiment. What we were trying to achieve with that was mitigate part of the tariff impact but also maintain market share as best as we could. You know, it's not, I guess it's not an easy answer, and I'm sorry if we're not giving you exactly what you want there.

[John Deysher, President and Portfolio Manager at Pinnacle]

Okay. No, that's understandable. The lawsuit for the refund, about how much are you looking to retrieve with that lawsuit?

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

Well, we're hoping to re-retrieve the whole thing. You know, as the administration's attorneys took this up through the court system, I can't remember if it was the Federal Appeals Court or the Court of International Trade, but they basically said to the court, "Please do not state this because if the Supreme Court rules this unlawful, we will pay back these incremental tariffs, the IEEPA tariffs, with interest." They're on record in the court system as saying they would pay this back. Once the Supreme Court ruled, you know, the tune changed a little bit from the administration saying, you know, they might litigate it. I think that's gonna be difficult for them because they were so clear in what they said to the court as this moved up to the Supreme Court.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

It goes back down to the Court of International Trade for a remedy. You know, we're optimistic, but we've also seen that things can get tied up in litigation no matter what. We're gonna wait and see, but we're optimistic about getting back the whole $16 million.

[John Deysher, President and Portfolio Manager at Pinnacle]

Okay. That was the refund that you're seeking, $16 million or so.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

Exactly. You don't state a number when you file the lawsuit. It's just a refund on all the IEEPA tariffs.

[John Deysher, President and Portfolio Manager at Pinnacle]

Right. Okay. That, that makes a lot of sense. You mentioned China. I'm just curious, last year, what % of the cost of goods sold were imported from China, roughly?

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

I would say it was about 65%-70%.

[John Deysher, President and Portfolio Manager at Pinnacle]

From China?

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

What we've done, John Deysher, last year was a busy year for sourcing. What we've done is we've established a much better footprint in Cambodia and Vietnam than we had prior to 2025. We're in a really good position to continue to grow our sourcing outside of China. You know, we were throwing a little bit of a wrench into the works because we have a big base of manufacturing in India. When China was hit with tariffs early on at very, very high levels, we moved product to India. Then India got hit with 50%. You know, the uncertainty around these tariffs make it difficult, but we're learning to live with that uncertainty, and we've set up a much more flexible supply chain for the future.

[John Deysher, President and Portfolio Manager at Pinnacle]

Okay, great. That's good to hear. I guess finally on the e-commerce business, the increase in sales reserves, can you give us some color on that, why that was necessary?

[Judy Anderson, CFO at Weyco Group]

That was just a standard adjustment that was made in the fourth quarter. It just happened that our sales declined by not that much, a small amount, and just that adjustment to the sales reserve was a little bit more than that. It, you know, it seemed significant in relation to the change in the sales for the quarter.

[John Deysher, President and Portfolio Manager at Pinnacle]

Okay. Are any of your e-commerce customers facing any kind of pressure at this point?

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

Well, yeah, John, do you mean our, are you talking about our actual direct-to-consumer customers or?

[John Deysher, President and Portfolio Manager at Pinnacle]

Yeah, I mean.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

-wholesale?

[John Deysher, President and Portfolio Manager at Pinnacle]

Sorry. Yeah. Well, it says, well, both actually. You know, I know it's a pretty competitive business, and I was just curious if there's any pressures on either the wholesale business or the e-commerce side on that.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

What we're seeing out there is that the customer, you know, our end customer is, you know, shopping for deals. And two things are going on. One is our inventory is extraordinarily clean right now. You know, in the first half of 2025, we had more clearance, but, you know, it really dwindled throughout the year. Just don't have as much clearance to offer our customers, and they're, as such, they're moving to go look for deals on Florsheim or Bogs or Stacy Adams on other sites.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

The other thing, you know, in that dynamic is that as the, you know, the owner of the brand, we're trying not to be out there discounting as much in terms of our ongoing line, but we do have wholesale partners out there that carry our ongoing, you know, top patterns, top styles that will discount from time to time. We're seeing a migration of our consumers, you know, from our site to other sites in terms of purchasing. You know, I think our overall wholesale e-commerce business is holding up relatively well. Our own websites are, you know, down just because of the two reasons I just communicated.

[John Deysher, President and Portfolio Manager at Pinnacle]

Okay, good. Very helpful. Just one more quickly, if I might. We're all hearing about higher oil prices, and I was just curious if that impacts your vendors in terms of, I don't know, foam costs or anything like that. Have you thought about the how that dynamic might play out?

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

As far as what costs did you say?

[John Deysher, President and Portfolio Manager at Pinnacle]

Foam costs or any other, you know, parts of the shoe that are oil impacted.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

Yeah. No, I don't. I think that, you know, there's two impacts that I can think of. The first one is that if this goes on for a while, it's gonna reduce discretionary spending on the part of the consumer because more of that spending is gonna go to filling up their car and for heating bills and everything. The second impact as far as our products go, is really more with shipping. I mean, you might see the shipping lines raise their prices if it goes on, because that's a big part of their cost. As far as, like, the actual impact on components going into footwear, unless this goes on for a long time, I think that would be very minimal. So we don't see a major impact other than maybe more consumer, the consumer being more stretched.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

You know, other than that, from the standpoint of the cost of the shoes, we don't really see a big impact.

[John Deysher, President and Portfolio Manager at Pinnacle]

Okay, good. That's it. Thanks for taking my question.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

Thanks, John.

[Operator]

Thank you. Our next question comes from Kristin Sutton with Shopify. Please proceed.

[Kristin Sutton, Enterprise Account Executive at Shopify]

Yes, John, thanks for the context, and I appreciate the discipline around not discounting directly, as you just explained, which protects wholesale partnerships as well as the brand. I wanted to ask about the dynamic of customers who are already bypassing the wholesale and coming to you directly for the e-commerce, seeing that that was just asked. To understand...

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

Sorry.

[Kristin Sutton, Enterprise Account Executive at Shopify]

I'm sorry.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

Go ahead, Kristen. Go ahead.

[Kristin Sutton, Enterprise Account Executive at Shopify]

My question is if the customer's already coming to your brand sites, would being able to increase the conversion basket size directly while circumventing the discount shopping, would that be a helpful aspect to layer it on while still keeping the wholesale partnerships, which is obviously a critical part of the earnings success for the last quarter?

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

Yeah.

[Kristin Sutton, Enterprise Account Executive at Shopify]

Is that something that will help?

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

Yeah. We're always looking for ways to increase conversion, you know, and want to do that in a way that's healthy for the business.

[Kristin Sutton, Enterprise Account Executive at Shopify]

Okay.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

You know, the situation, right, you know, where we are right now, we just have less clearance, and the consumer is under pressure right now. I think that's affecting, you know, soft goods in general. When consumers are, you know, have less money in their pocket, they're looking for deals. You know, if we have less clearance, it lowers our conversion rate. That's just, you know, something that we work through. We feel actually pretty good about, you know, how our e-commerce business is performing. You're gonna have these types of changes, you know, based on, you know, the obsolescence in your inventory.

[Kristin Sutton, Enterprise Account Executive at Shopify]

I appreciate that. Thank you for the answer.

[Operator]

Thank you. This concludes our Q&A session. I will turn it back to Judy Anderson for closing comments.

[Tom Florsheim Jr, Chairman and CEO at Weyco Group]

Thank you for this, your support of Weyco Group, and everyone, have a great day. Thank you.

[Operator]

This concludes our conference. Thank you for participating. You may now disconnect.

Participants

Executives

• Judy Anderson, CFO
• Tom Florsheim Jr, Chairman and CEO

Analysts

• John Deysher, President and Portfolio Manager at Pinnacle
• Kristin Sutton, Enterprise Account Executive at Shopify