WEYCO GROUP INC
For the period ended Mar 31, 2025. Filed May 9, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 9, 2025
WEYS$60.69-3.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0001558370-24-015014
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0001558370-25-007097
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 58 previous paragraphs and 68 current paragraphs.
16 unchanged; 17 reworded; 35 added; 25 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 2 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (35)
Current report
Overall net sales for the first quarter of 2025 were down 5% compared to the first quarter of 2024. We began the year facing geopolitical and macroeconomic uncertainties, which include evolving U.S. trade policies, recession concerns, and market volatility. These factors affected both consumer and retailer confidence, resulting in declines in our wholesale and direct-to-consumer businesses.
Current report
BOGS wholesale net sales declined 5% for the quarter. We experienced more typical winter weather in January and February 2025, with cold temperatures and precipitation across much of the country. This helped our BOGS retailers work through existing inventory, which we expect will create opportunities for new product in the remainder of 2025. We continue to have high expectations for our innovative seamless construction, which is lighter and more durable than comparable vulcanized products currently in the market. Our new Spring product, such as theBoga clog, has arrived at retail and is off to a solid start.
Current report
Wholesale net sales of our legacy brands (Florsheim, Stacy Adams and Nunn Bush) were collectively down 3% in the first quarter, with Florsheim up 7%, Stacy Adams down 7%, and Nunn Bush down 16%. The declines in Nunn Bush and Stacy Adams reflect the current softness in non-athletic footwear at retailers, as consumers remain cautious with their discretionary spending. In tandem with this, many of our wholesale partners are maintaining conservative inventory positions, which has impacted our shipments.
Current report
Considering the challenging environment, in light of reduced consumer discretionary spending and cautious retailer inventory management, Florsheim’s first quarter performance was particularly strong. The brand continues to gain market share with robust sales across a range of categories including hybrid “refined casual” footwear, which we view as a significant growth opportunity in the future.
Current report
Net sales in our retail segment were down 12% for the quarter. Last year, we drove significant e-commerce volume through promotions, particularly with BOGS, due to elevated inventory levels. In 2025, our inventory is more aligned with demand, and we scaled back promotional activity, which contributed to the decline in sales. We continue to invest in data-driven tools to position our e-commerce business for long-term growth.
Current report
Florsheim Australia’s overall net sales declined 7% for the quarter, or 3% in local currency, due mainly to the closing of our Asia Pacific operations. Like the U.S., Florsheim Australia's markets, which include South Africa, New Zealand, and the Pacific Rim, are facing economic headwinds. Despite the challenging environment, Florsheim Australia's first-quarter operating results improved due, in part, to an 11% increase in same-store retail sales. We remain focused on managing expenses and identifying opportunities for profitable growth in Florsheim Australia.
Current report
Current Business Trends - Tariffs
Current report
Over the last several weeks, the U.S. government enacted a broad range of reciprocal and retaliatory tariffs (“incremental tariffs”) on goods imported into the United States. Including these incremental tariffs, the current effective total tariff rate on goods sourced from China, which is where we source a majority of our products, is 161%, up from 16% in 2024. While the incremental tariffs did not impact our first quarter 2025 performance, unless withdrawn, these tariffs will significantly increase our cost of goods sold in future periods. To mitigate the impact of tariff-cost increases, we negotiated cost reductions with several of our Chinese suppliers and are planning to raise selling prices beginning in Summer 2025. We are also accelerating our efforts to diversify our sourcing.
Current report
First Quarter Highlights
Current report
CONSOLIDATED RESULTS OF OPERATIONS
Current report
Net sales for the first quarter of 2025 were $68.0 million, down $3.5 million, or 5%, compared to the first quarter of 2024. This decrease was comprised of a $2.0 million decline in Wholesale net sales, a $1.1 million decline in Retail net sales, and a $0.4 million decline in net sales of Florsheim Australia.
Current report
First quarter selling and administrative expenses as a percent of net sales remained relatively flat at 34% and 33% in 2025 and 2024, respectively. Earnings from operations were $7.0 million, down $1.2 million, or 15%, from 2024 levels. This decrease resulted from lower sales in both our Wholesale and Retail segments.
Current report
Interest income decreased $0.3 million compared to last year’s first quarter, due to less interest earned on cash balances in the U.S. and Canada. Interest expense was nominal for the quarter and zero in the first quarter of 2024, as there was no debt outstanding during either period.
Current report
Other expense, net, primarily includes the non-service cost components of pension expense and net gains and losses on foreign currency transactions. The expense category remained flat year-over-year, as were no significant changes in these expenses between periods.
Current report
The effective income tax rate was 26.5% and 26.6% for the first quarters of 2025 and 2024, respectively. See Note 9 to the Consolidated Financial Statements for additional information on income taxes.
Current report
Net earnings were $5.5 million or $0.57 per diluted share, in 2025 versus $6.7 million, or $0.69 per diluted share, in 2024. The decreases were primarily due to lower sales.
Current report
Net sales of the Stacy Adams and Nunn Bush brands were down 7% and 16%, respectively, for the quarter, reflecting the current softness in non-athletic footwear at retail, as consumers were cautious with discretionary spending. Florsheim’s sales were up 7% for the period, due largely to new product launches. BOGS sales were down 5%, resulting from lower retailer demand.
Current report
Wholesale gross earnings as a percent of net sales were 39.4% and 39.6% in the first quarters of 2025 and 2024, respectively. The incremental tariffs did not impact our first quarter 2025 gross margins. Given the uncertainty surrounding the evolving tariff and trade policies of the U.S. government, we cannot currently predict the potential magnitude of the incremental tariffs on our gross margins.
Current report
million last year. As a percent of net sales, wholesale selling and administrative expenses were flat at 27% in both 2025 and 2024. Wholesale operating earnings decreased 10% to $6.6 million for the quarter, from $7.4 million in 2024, as a result of lower sales.
Current report
Net sales in our Retail segment, which were generated mainly by our e-commerce websites, were $8.7 million for the quarter, down 12% from record sales of $9.8 million in 2024. The decrease resulted mainly from lower sales on the BOGS website, due to less promotional activities in 2025, compared to a strong first quarter last year.
Current report
First quarter 2025 net sales of Florsheim Australia were $5.1 million, down 7% from $5.5 million in the first quarter of 2024. The weaker Australian dollar relative to the U.S. dollar contributed to this decrease. In local currency, Florsheim Australia’s net sales were down 3% due mainly to the closing of Asia Pacific, partially offset by higher sales in Australia. Net sales in Australia were up 6% in local currency, with higher sales in both its wholesale and retail businesses.
Current report
Florsheim Australia’s gross earnings as a percent of net sales were 62.7% and 60.2% in the first quarters of 2025 and 2024, respectively. Florsheim Australia generated operating losses totaling $0.2 million for the quarter and $0.4 million last year. The improvement was due to higher sales in Australia.
Current report
Interest income totaled $0.6 million in the first quarter of 2025 compared to $0.9 million in last year’s first quarter. The decrease was due to less interest earned on cash balances in the U.S. and Canada, resulting from lower average cash balances and lower interest rates compared to last year.
Current report
Other expense, net, primarily includes the non-service cost components of pension expense and net gains and losses on foreign currency transactions. Other expense, net, remained flat at $0.1 million in both the first quarters of 2025 and 2024, because there were no significant changes in these expenses during the period.
Current report
Our primary sources of liquidity are cash, short-term marketable securities and our revolving line of credit. The following discussion focuses on information included in the accompanying Consolidated Statements of Cash Flows.
Current report
Operating Activities
Current report
Net cash provided by operating activities totaled $4.1 million in the first three months of 2025, down $10.2 million compared to $14.3 million last year. The decrease was primarily due to lower net earnings and changes in operating assets and liabilities, principally inventory. Cash flows from the change in inventory decreased $7.1 million for the period, mainly because our inventory levels as of
Current report
March 31, 2025, were higher than normal for this time of year, as we were proactive in expediting a large amount of inventory before the incremental tariffs went into effect.
Current report
Investing Activities
Current report
Financing Activities
Current report
Net cash used for financing activities totaled $3.2 million and $4.7 million in the first quarters of 2025 and 2024, respectively. The change was due to a $2.2 million decrease in cash dividends paid (see further explanation below) partially offset by a $0.7 million increase in shares repurchased and retired.
Current report
Cash dividends paid for the first three months of 2025 totaled $2.5 million and included one dividend payment that was both declared and paid in the first quarter of 2025. Cash dividends paid for the first three months of 2024 totaled $4.7 million and included two dividend payments: one that was declared in the fourth quarter of 2023 and paid in the first quarter of 2024 and one that was both declared and paid in the first quarter of 2024.
Current report
Financing Activities – Non-cash
Current report
Our regular fourth-quarter 2024 and one-time special cash dividend totaling $21.6 million was prefunded in December 2024 and paid to shareholders in January 2025. This dividend payment was reflected as a non-cash financing activity in the Condensed Consolidated Statements of Cash Flows.
Removed paragraphs (25)
Previous report
Third quarter 2024 net sales in our Wholesale segment were down 12% compared to last year’s third quarter. The decrease was a result of the challenging economic environment, in which consumers have limited discretionary funds, and footwear market sales are being impacted accordingly.
Previous report
BOGS net sales were down 18% for the quarter. The outdoor category, particularly the weather boot market, has been under pressure for the better part of two years. During the pandemic, retailers and consumers alike loaded up on outdoor gear, resulting in record sales for many brands, including BOGS. Since then, the industry has been working through excess inventory, and we believe we have finally reached an equilibrium for the remainder of 2024. However, many retailers are taking a wait-and-see approach regarding orders, operating under the premise that if they need inventory, it will be available in the market. The result is that we have seen demand impacted by the mild and dry weather throughout the country, which has negatively affected our wholesale sales. The adverse effects of the weather extended to our BOGS e-commerce business, which was down 31% for the quarter.
Previous report
While our success for the remainder of 2024 depends on Fall and Winter weather returning to normal, for the long-term, we are focused on reducing the weather sensitivity of the BOGS business. Towards that goal, we have increased our sales efforts in the Farm & Agriculture trade channel with the introduction of our Seamless Construction collection, which is 30% lighter and twice as durable as the vulcanized construction more commonly used in our category. The Farm & Agriculture trade channel is less weather-dependent and utilizes BOGS products year-round. We are making progress in this category, but it will take time to expand our penetration in retailers that cater to this market. We are also introducing Seamless Construction and lighter, less-insulated products to our Kids and Women’s lifestyle collections, which will help us make BOGS more of a three-season brand for this customer base. It has been a challenging stretch for the BOGS brand. We expect that having our retail partners with right-sized inventory will help move BOGS forward.
Previous report
Our combined legacy business was down 10% for the quarter, with Florsheim up 1%, Stacy Adams down 17%, and Nunn Bush down 20%. As a category, dress footwear has been trending down for some time, except for a brief period emerging from the pandemic when
Previous report
there was a burst of weddings and more dressy occasions. This downtrend resulted in retailers shifting funding away from dress footwear and toward other categories. Given this context, Florsheim’s performance over the last few years, including this quarter, is very solid. Florsheim continues to pick up market share in the refined footwear category and has made good progress in the hybrid and true casual segments of the market.
Previous report
Our Stacy Adams brand had a difficult quarter. The brand remains the market leader in accessible fashion in the contemporary dress footwear segment and is performing well, especially with accounts that maintain dress-oriented footwear as an important part of their retail assortment. The challenge is evolving the product lineup so that Stacy Adams is in consideration for hybrid and more refined casual footwear. While it will take time, we are getting traction at retail with casual lifestyle product, particularly in the hybrid category.
Previous report
Our Nunn Bush brand caters to a more value-oriented, price-sensitive consumer. We saw reduced demand in the third quarter, as these consumers cut back on discretionary purchases. In addition, a significant portion of Nunn Bush’s sales decrease in the third quarter was due a shift in timing of shipments to a large retailer from third to second quarter. Despite the volume drop, we feel good about the future trajectory of the Nunn Bush business. We have reinvented Nunn Bush as the most casual brand within our legacy portfolio. Nunn Bush is also well-positioned in the market with its strong value proposition and innovative comfort technology.
Previous report
Retail sales were down 5% for the quarter. The decline in retail sales was driven primarily by the decrease in BOGS e-commerce sales. Overall, our direct-to-consumer business has been more price-sensitive and promotionally oriented.
Previous report
Sales at Florsheim Australia were down 15%. The decrease in sales at Florsheim Australia was mainly the result of our closing operations in the Asia-Pacific region. Sales in Australia were down 1%, with same-store sales up 1%. We are finding the economic environment in Australia to be very similar to that of North America, with consumers under pressure and very conservative in their approach to discretionary purchases.
Previous report
Third Quarter Highlights
Previous report
Year-To-Date Highlights
Previous report
Consolidated net sales for the first nine months of 2024 were $209.8 million, down 12% from $237.5 million in 2023. Consolidated gross earnings increased to 44.3% of net sales in the first nine months of 2024 compared to 43.1% of net sales in the same period one year ago. The increase was primarily due to higher gross margins in our Wholesale segment. Year-to-date 2024 earnings from operations totaled $25.1 million, down 15% from record operating earnings of $29.5 million in 2023. To date in 2024, our net earnings totaled $20.3 million, or $2.12 per diluted share, down from record net earnings of $21.6 million, or $2.27 per diluted share, in the first nine months of 2023.
Previous report
Wholesale net sales for the three and nine months ended September 30, 2024, were down 12% in both periods, compared to the same periods one year ago. This year, all our wholesale brands have been impacted by soft consumer demand resulting from reductions in discretionary spending. Our BOGS brand was down 18% for the quarter and 31% for the year-to-date period, compared to the same periods of 2023. While outdoor retailer inventory levels have normalized which positively impacted BOGS third-quarter performance relative to the first half of 2024, BOGS at-once orders did not reach their expected potential during the third quarter due to unseasonably warm and dry weather throughout the country. BOGS fourth-quarter 2024 sales will largely depend on colder weather to bolster its growth.
Previous report
Wholesale gross earnings were 40.1% of net sales in the third quarter of 2024 compared to 38.6% of net sales in last year’s third quarter. For the nine months ended September 30, wholesale gross earnings as a percent of net sales were 39.4% in 2024 and 38.0% in 2023. Gross margins improved for both the quarter and year-to-date periods as a result of lower inventory costs, primarily inbound freight. Freight costs stabilized beginning in the first half of 2022, but because of the large buildup of inventories in 2022, it was not until late 2023 that we sold through inventory with higher freight costs and were able to begin realizing the full benefit of the lower freight costs.
Previous report
costs, including commission-based compensation. As a percent of net sales, wholesale selling and administrative expenses were 25% and 22% in the third quarters of 2024 and 2023, respectively, and 26% and 25% in the first nine months of 2024 and 2023, respectively. The increases as a percent of net sales were because many of our costs are fixed in nature and do not vary with sales.
Previous report
Wholesale operating earnings totaled $9.4 million for the quarter, down 16% from $11.3 million in last year’s third quarter. For the nine months ended September 30, 2024, wholesale operating earnings were $22.6 million, down 11% from $25.4 million in the same period of 2023. The quarter and year-to-date decreases were a result of lower sales.
Previous report
Net sales in our Retail segment, which were generated mainly by our e-commerce websites, were $7.2 million for the quarter, down 5% from $7.6 million in the third quarter of 2023. Lower sales on our BOGS website, a result of the mild Fall, were partially offset by higher sales on our Florsheim and Stacy Adams websites this quarter. For the nine months ended September 30, retail net sales were a record $24.6 million in 2024, up 2% over our previous record of $24.1 million in 2023. The year-to-date increase was driven by higher sales on the Florsheim website. Brick-and-mortar sales were down slightly for both the three and nine-month periods.
Previous report
Retail gross earnings as a percent of net sales were 66.9% and 65.4% in the third quarters of 2024 and 2023, respectively. For the nine months ended September 30, retail gross earnings were 66.4% and 66.0% of net sales in 2024 and 2023, respectively.
Previous report
Retail operating earnings were $0.8 million for the quarter and $0.9 million in last year’s third quarter. For the nine months ended September 30, 2024, Retail operating earnings totaled $2.8 million, down 15% from $3.3 million last year. The nine-month earnings decrease was due to the higher web expenses this year.
Previous report
Net sales of Florsheim Australia were $6.0 million in the third quarter of 2024, down 15% from $7.1 million in the third quarter of 2023. The quarterly decrease was almost entirely due to the closing of our Asia Pacific operations. Sales in Australia were down 1% for the quarter, due to the impact of four fewer retail stores operating compared to the same period last year. Australia’s same store sales were up 1% for the quarter. For the year-to-date period, Florsheim Australia’s net sales declined $4.9 million, or 22%, compared to the same period one year ago. The year-to-date decrease was largely due to the closing of our Asia Pacific operations. Sales in Australia were also down due to fewer retail stores operating, the mid-year 2023 loss of a sizeable wholesale customer, and a challenging environment at retail.
Previous report
Florsheim Australia’s gross earnings were 59.2% of net sales for the quarter and 61.6% of net sales in last year’s third quarter. For the nine months ended September 30, Florsheim Australia’s gross earnings as a percent of net sales were 60.5% and 61.5% in 2024 and 2023, respectively.
Previous report
Florsheim Australia’s operating earnings for the three-months ended September 30, were zero in 2024 and $0.3 million in 2023. For the nine months ended September 30, 2024, its operating losses totaled $0.3 million, down from operating earnings of $0.8 million in the same period one year ago. The nine-month earnings decrease was primarily due to lower sales this year.
Previous report
Interest income totaled $0.9 million in the third quarter of 2024 compared to $0.3 million in last year’s third quarter. For the nine months ended September 30, interest income was $2.8 million in 2024 and $0.6 million in 2023. The increases in 2024 were due to interest earned on higher cash balances in the U.S. and Canada. Interest expense was zero for both the third quarters of 2024 and 2023. For the nine-months ended September 30, 2024, interest expense decreased $0.5 million from the same period in 2023. Last year’s interest expense was incurred on outstanding debt balances during the first half of 2023, which has since been paid off.
Previous report
Other expense, net, totaled $0.2 million and $0.1 million in the third quarters of 2024 and 2023, respectively. For the nine months ended September 30, other expense, net, totaled $0.4 million in both 2024 and 2023.
Previous report
Our primary sources of liquidity are cash and our revolving line of credit. During the first nine months of 2024, we generated $17.3 million of cash from operations compared $62.9 million in the same period one year ago. The decrease in 2024 was primarily due to changes in operating assets and liabilities, principally inventory.
Reworded paragraphs (17)
Previous wording
This report contains certain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements represent our good faith judgment with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially. Such statements can be identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “likely,” “plans,” “predicts,” “projects,” “should,” “will,” or variations of such words, and similar expressions. Forward-looking statements, by their nature, address matters that are, to varying degrees, uncertain. Therefore, the reader is cautioned that these forward-looking statements are subject to a number of risks, uncertainties or other factors that may cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to, the risk factors described under Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year-ended December 31, 2023, filed on March 14, 2024, which information is incorporated herein by reference. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.
Current wording
This report contains certain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements represent our good faith judgment with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially. Such statements can be identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “likely,” “plans,” “predicts,” “projects,” “should,” “will,” or variations of such words, and similar expressions. Forward-looking statements, by their nature, address matters that are, to varying degrees, uncertain. Therefore, the reader is cautioned that these forward-looking statements are subject to a number of risks, uncertainties or other factors that may cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to, the risk factors described under Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year-ended December 31, 2024, filed on March 14, 2025, which information is incorporated herein by reference, and in Part II, Item 1A, “Risk Factors,” of this Form 10-Q. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.
Previous wording
The Company designs, markets, and distributes quality and innovative footwear principally for men, but also for women and children, under a portfolio of well-recognized brand names including: Florsheim, Nunn Bush, Stacy Adams, BOGS, Rafters, and Forsake. Inventory is purchased from third-party overseas manufacturers. Almost all of these foreign-sourced purchases are denominated in U.S. dollars.
Current wording
We design, market, and distribute quality and innovative footwear principally for men, but also for women and children, under a portfolio of well-recognized brand names including: Florsheim, Nunn Bush, Stacy Adams, BOGS, and Forsake. Inventory is purchased from third-party overseas manufacturers. Almost all of these foreign-sourced purchases are denominated in U.S. dollars.
Previous wording
We have two reportable segments, North American wholesale operations (“Wholesale”) and North American retail operations (“Retail”). In the Wholesale segment, our products are sold to leading footwear, department, and specialty stores, as well as e-commerce retailers, primarily in the United States and Canada. We also have licensing agreements with third parties who sell our branded apparel, accessories, and specialty footwear in the United States, as well as our footwear in Mexico and certain markets overseas. Licensing revenues are included in our Wholesale segment. Our Retail segment consists of e-commerce businesses and four brick-and-mortar retail stores in the United States. Retail sales are made directly to consumers on our websites, or by our employees in our stores. Our “other” operations include our wholesale and retail businesses in Australia, South Africa, and Asia Pacific (collectively, “Florsheim Australia”). We ceased operations in the Asia Pacific region in 2023 and have substantially completed the wind down of that business. The majority of our operations are in the United States and our results are primarily affected by the economic conditions and the retail environment in the United States.
Current wording
We have two reportable segments, North American wholesale operations (“Wholesale”) and North American retail operations (“Retail”). In the Wholesale segment, our products are sold to leading footwear, department, and specialty stores, as well as e-commerce retailers, primarily in the United States and Canada. We also have licensing agreements with third parties who sell our branded apparel, accessories, and specialty footwear in the United States, as well as our footwear in Mexico and certain markets overseas. Licensing revenues are included in our Wholesale segment. Our Retail segment consists of e-commerce businesses and four brick-and-mortar retail stores in the United States. Retail sales are made directly to consumers on our websites, or by our employees in our stores. Our “other” operations include our wholesale and retail businesses in Australia, South Africa, and Asia Pacific (collectively, “Florsheim Australia”). We ceased operations in the Asia Pacific region in 2023 and completed the wind down of that business in 2024. The majority of our operations are in the United States and our results are primarily affected by the economic conditions and the retail environment in the United States.
Previous wording
Consolidated net sales were $74.3 million, down 12% compared to net sales of $84.2 million in the third quarter of 2023. Consolidated gross earnings increased to 44.3% of net sales compared to 43.0% of net sales in last year’s third quarter, due mainly to higher gross margins in our Wholesale segment. Earnings from operations totaled $10.2 million for the quarter, down 18% from $12.4 million last year. Third quarter net earnings were $8.1 million, or $0.84 per diluted share, in 2024, versus $9.3 million, or $0.98 per diluted share, in 2023.
Current wording
Consolidated net sales were $68.0 million, down 5% compared to net sales of $71.6 million in the first quarter of 2024. Consolidated gross earnings were 44.6% of net sales compared to 44.7% of net sales in last year’s first quarter. Earnings from operations totaled $7.0 million for the quarter, down 15% from $8.3 million last year. First quarter net earnings were $5.5 million, or $0.57 per diluted share, in 2025, versus $6.7 million, or $0.69 per diluted share, in 2024.
Previous wording
At September 30, 2024, our cash and marketable securities totaled $81.8 million and we had no debt outstanding on our $40.0 million revolving line of credit. During the first nine months of 2024, we generated $17.3 million of cash from operations and used funds to pay $9.6 million in dividends. We also repurchased $0.6 million of our common stock and had $0.9 million of capital expenditures during the period.
Current wording
At March 31, 2025, our cash and marketable securities totaled $77.9 million, and we had no debt outstanding on our $40.0 million revolving line of credit. During the first three months of 2025, we generated $4.1 million of cash from operations, and used funds to pay $2.5 million in dividends and repurchase $0.7 million of our common stock. Additionally, our prefunded dividend of $21.6 million was paid to shareholders in January 2025, and we had $0.4 million of capital expenditures during the period.
Previous wording
Our cost of sales does not include distribution costs (e.g., receiving, inspection, warehousing, shipping, and handling costs) which are included in selling and administrative expenses. Wholesale distribution costs totaled $3.8 million in both the third quarters of 2024 and 2023. For the nine-month periods ended September 30, wholesale distribution costs were $10.8 million in 2024 and $11.5 million in 2023, down in line with lower distribution activities this year.
Current wording
Gross earnings as a percent of net sales remained relatively flat at 44.6% and 44.7% in the first quarters of 2025 and 2024, respectively. Our cost of sales does not include distribution costs (e.g., receiving, inspection, warehousing, shipping, and handling costs) which are included in selling and administrative expenses. Consolidated distribution costs totaled $5.0 million and $5.3 million in the first quarters of 2025 and 2024, respectively.
Previous wording
Net sales and earnings from operations for our segments for the three and nine months ended September 30, 2024 and 2023, were as follows:
Current wording
Net sales and earnings from operations for our reportable segments and the “other “category for the three months ended March 31, 2025 and 2024, were as follows:
Previous wording
Net sales in our Wholesale segment for the three and nine months ended September 30, 2024 and 2023, were as follows:
Current wording
Net sales in our Wholesale segment for the three months ended March 31, 2025 and 2024, were as follows:
Previous wording
Wholesale selling and administrative expenses consist primarily of distribution costs, salaries and commissions, advertising costs, employee benefit costs, and depreciation. Wholesale selling and administrative expenses totaled $15.1 million for the quarter compared to $15.6 million in last year’s third quarter. For the nine months ended September 30, wholesale selling and administrative expenses were $43.4 million in 2024 versus $47.1 million in 2023. The quarter and year-to-date decreases were largely due to lower employee
Current wording
Wholesale selling and administrative expenses consist primarily of distribution costs, salaries and commissions, advertising costs, employee benefit costs, and depreciation. Wholesale selling and administrative expenses totaled $14.8 million for the quarter and $14.9
Previous wording
Selling and administrative expenses for the Retail segment consist primarily of freight, advertising expense, employee costs, rent and occupancy costs. Retail selling and administrative expenses totaled $4.0 million in both the third quarters of 2024 and 2023. As a percent of net sales, retail selling and administrative expenses were 56% and 53% in the third quarters of 2024 and 2023, respectively. For the nine months ended September 30, Retail selling and administrative expenses totaled $13.6 million, or 55% of net sales, in 2024 versus $12.6 million, or 52% of net sales, in 2023. The year-to-date increase was primarily due to higher web freight and advertising costs in the first half of the year. This year’s web advertising expenses increased largely due to the reallocation of certain expenditures historically charged to our Wholesale segment that primarily benefit our websites.
Current wording
Retail gross earnings were 66.6% of net sales for the quarter compared to 65.3% in the first quarter of 2024. Selling and administrative expenses for the Retail segment consist primarily of freight, advertising expense, employee costs, rent and occupancy costs. Retail selling and administrative expenses were $5.2 million and $5.1 million in the first quarter of 2025 and 2024, respectively. As a percent of net sales, retail selling and administrative expenses were 59% and 52% in the first quarters of 2025 and 2024, respectively. The increase in retail selling and administrative expenses as a percentage of net sales is because many of our retail expenses are fixed and do not vary with sales. Retail operating earnings totaled $0.6 million for the quarter, down 52% from $1.3 million last year. The decrease was primarily due to lower sales.
Previous wording
Operating results reported in the“other” category historically included our retail and wholesale businesses in Australia, South Africa, and Asia Pacific (collectively,“Florsheim Australia”). We ceased operations in the Asia Pacific region in 2023 and have substantially completed the wind down of that business. As a result, the year-to-date 2024 operating results of the“other” category primarily reflect that of Australia and South Africa.
Current wording
Operating results reported in the“other” category historically included our retail and wholesale businesses in Australia, South Africa, and Asia Pacific (collectively,“Florsheim Australia”). We ceased operations in the Asia Pacific region in 2023 and completed the wind down of that business in 2024. Accordingly, first-quarter 2025 operating results of the“other” category only reflect the operations of Australia and South Africa.
Previous wording
The effective income tax rate for the three months ended September 30, 2024 and 2023 was 25.7% in both periods. For the nine months ended September 30, 2024 and 2023, the effective tax rate was 25.8% in both periods. The 2024 and 2023 effective tax rates differed from the federal rate of 21% primarily because of state taxes.
Current wording
The effective income tax rate was 26.5% and 26.6% in 2025 and 2024, respectively. The 2025 and 2024 effective tax rates differed from the federal rate of 21% primarily because of state taxes.
Previous wording
Capital expenditures totaled $0.9 million in the first nine months of 2024. Management estimates that total capital expenditures for 2024 will be between $1.0 million and $2.0 million.
Current wording
Net cash used for investing activities totaled $0.4 million for the quarter compared to less than $0.1 million in the same period of 2024. The increased use of cash this year was due to higher capital expenditures and less proceeds from maturities of marketable securities. Capital expenditures totaled $0.4 million for the period, compared to $0.2 million last year. Management estimates that total capital expenditures for 2025 will be between $1.0 million and $2.0 million.
Previous wording
We paid dividends totaling $9.6 million and $9.3 million in the first nine months of 2024 and 2023, respectively. On November 5, 2024, our Board of Directors declared a regular quarterly cash dividend of $0.26 per share to all shareholders of record on November 18, 2024, payable January 2, 2025. Additionally, on November 5, 2024, our Board of Directors also declared a special one-time cash dividend of $2.00 per share to all shareholders of record on November 18, 2024, payable January 2, 2025.
Current wording
On May 6, 2025, our Board of Directors declared a cash dividend of $0.27 per share to all shareholders of record on May 16, 2025, payable June 30, 2025. This represents an increase of 4% above the previous quarter dividend rate of $0.26.
Previous wording
We repurchase our common stock under our share repurchase program when we believe market conditions are favorable. During the first nine months of 2024, we repurchased 19,841 shares for a total cost of approximately $0.6 million. As of September 30, 2024, there were 848,916 authorized shares available for repurchase under the program. See Part II, Item 2,“Unregistered Sales of Equity Securities and Use of Proceeds” below for more information.
Current wording
We repurchase our common stock under our share repurchase program when we believe market conditions are favorable. During the first three months of 2025, we repurchased 24,253 shares for a total cost of approximately $0.7 million. As of March 31, 2025, there were 824,663 authorized shares available for repurchase under the program. See Part II, Item 2,“Unregistered Sales of Equity Securities and Use of Proceeds” below for more information.
Previous wording
On September 27, 2024, we amended our line of credit agreement. The Amended Credit Agreement extends the maturity of our credit facility to September 26, 2025. Under the terms of the Amended Credit Agreement, there is a maximum available borrowing limit of $40.0 million, and amounts outstanding bear interest at the one-month term SOFR plus 125 basis points. The Amended Credit Agreement is secured by a lien against our general business assets, and contains representations, warranties and covenants (including a minimum tangible net worth financial covenant) that are customary for a facility of this type. At September 30, 2024, there were no outstanding borrowings on the line of credit, and we were in compliance with all financial covenants.
Current wording
On March 31, 2025, we had a $40.0 million revolving line of credit with a bank that is secured by a lien against our general business assets and expires on September 26, 2025. Outstanding advances on the line of credit bear interest at the one-month term SOFR plus 125 basis points. Our line of credit agreement contains representations, warranties and covenants (including a minimum tangible net worth financial covenant) that are customary for a facility of this type. At March 31, 2025, there were no outstanding borrowings on the line of credit, and we were in compliance with all financial covenants.
Previous wording
As of September 30, 2024, approximately $4.6 million of cash and cash equivalents was held by our foreign subsidiaries.
Current wording
As of March 31, 2025, approximately $3.7 million of cash and cash equivalents was held by our foreign subsidiaries.