Weyco Group NASDAQ: WEYS reported higher second-quarter sales and sharply increased earnings, with results substantially supported by tariff refunds following the invalidation of certain import duties by the U.S. Supreme Court.
Net sales for the second quarter of 2026 rose 7% year over year to $62.2 million. Net earnings increased to $13.3 million, or $1.39 per diluted share, from $2.3 million, or $0.24 per diluted share, in the prior-year quarter. Operating earnings rose to $17 million from $3.9 million.
The company’s consolidated gross margin reached 70.4% of net sales, compared with 43.3% a year earlier. Chief Financial Officer Judy Anderson said the increase reflected the recognition of $15.3 million in tariff refunds as a reduction in cost of sales during the quarter.
Tariff Refunds Drive Margin Expansion
Anderson said Weyco paid approximately $19.8 million in tariffs imposed under the International Emergency Economic Powers Act, or IEEPA, during 2025 and the first quarter of 2026. After the Supreme Court invalidated IEEPA tariffs in February 2026, U.S. Customs and Border Protection began accepting refund claims in April.
Weyco submitted phase-one refund claims totaling $18.6 million in April, and substantially all of those claims were approved during the second quarter. The company recognized $14.3 million of tariff refunds in its wholesale segment and $1 million in its retail segment. It also recognized a $3.3 million reduction in inventory and $700,000 of interest income tied to the refunds.
The company said $1.2 million of remaining entries are classified as phase-three entries. No refunds associated with those entries have been recognized because the timing and amount of recoveries remain uncertain.
Anderson cautioned that tariff-related uncertainty remains. Following the Supreme Court ruling, the administration imposed a separate 10% incremental tariff under another statutory authority. On July 24, that tariff was increased to 12.5% on imports from China, the Dominican Republic and Vietnam.
“U.S. trade policies continue to evolve and remain unpredictable, creating near-term gross margin uncertainty,” Anderson said. The company said it has mitigation strategies in place and will adjust them in response to policy developments.
Wholesale Sales Rise Across Three Brands
Wholesale net sales increased 7% to $58.8 million, compared with $45.6 million in the prior-year quarter, driven by higher sales of Florsheim, Stacy Adams and BOGS. Wholesale gross margin rose to 70% from 37.6%, reflecting tariff refunds and selling price increases implemented in the second half of 2025.
Wholesale selling and administrative expenses increased to $18.1 million, or 37% of sales, from $13.1 million, or 29% of sales, primarily because of higher employee costs. Still, wholesale operating earnings rose to $16 million from $4.1 million, mainly due to the tariff refunds.
Chairman and Chief Executive Officer Tom Florsheim Jr. said the company’s combined legacy business increased sales by 6%, led by a 12% increase at Florsheim. He said the brand continued to benefit from demand for traditional dress shoes, as well as growth in hybrid and casual footwear.
Stacy Adams sales rose 4%. Florsheim said the brand’s dress-shoe business has produced strong retail sell-through, while the company is seeking to translate that performance into greater demand for casual lifestyle products.
Nunn Bush sales declined 3%. Florsheim said the opening-price-point brand faces competition from private-label products and lower-priced licensed brands. Weyco is working to differentiate Nunn Bush through comfort technology and higher-quality materials, he said.
BOGS sales increased 10% during the quarter. Florsheim said the outdoor brand’s seamless construction provides a differentiating feature because it is lighter and more durable than traditional vulcanized construction used in many competing rubber boots. He described the company as being in the early stages of a BOGS turnaround.
Retail and International Operations
Retail sales increased 4% to $7 million, primarily due to higher sales through the Florsheim website. Retail gross margin rose to 79.2% from 66.6%, driven largely by the $1 million reduction in cost of sales from tariff refunds. Retail operating earnings were $1 million, compared with $100,000 a year earlier.
Florsheim said Weyco continues to invest in its direct-to-consumer platform and is encouraged by U.S. e-commerce growth so far this year.
Florsheim Australia, which includes the company’s retail and wholesale businesses in Australia and South Africa, reported sales of $6.4 million, up 10% in U.S. dollars. However, sales declined 1% in local currency, with the reported increase reflecting appreciation of the Australian dollar against the U.S. dollar.
The operation reached breakeven operating results, improving from a $200,000 operating loss a year earlier. Florsheim said the Australian team continued to pursue sales opportunities while maintaining expense discipline in a challenging retail environment.
Cash Position, Inventory and Dividend
At June 30, Weyco had $98.1 million in cash and marketable securities and no debt outstanding under its $40 million revolving credit line. During the first six months of 2026, the company generated $25.2 million in operating cash flow, paid $26.6 million in dividends and spent $1.5 million on capital expenditures.
The company expects full-year capital expenditures of $2 million to $3 million. It received $1.8 million in tariff-refund and related interest proceeds during the second quarter and another $17.5 million in early July. Weyco said the benefits of those payments had already been recognized in second-quarter results because they related to entries approved during the quarter.
Inventory totaled $49.1 million at June 30, down from $65.9 million at the end of 2025. Florsheim said the company expects inventory to rise to roughly $70 million by the end of the fourth quarter as it seeks to support a healthy second-half backlog and manage potential supply disruptions tied to tariff uncertainty.
On Aug. 4, Weyco’s board declared a quarterly cash dividend of $0.28 per share, payable Sept. 30 to shareholders of record as of Aug. 18.
About Weyco Group (NASDAQ:WEYS)
Weyco Group, Inc 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.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
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