Companies

Sales down by 26.3% at Weyco

May 11, 2021 United States

The Wisconsin-based footwear company has announced first quarter results. Weyco continues to register declining sales, especially on the wholesale segment. Sales were down by 26.3% in the first quarter

“As expected, sales of our legacy brands remained depressed in the first quarter as a result of the ongoing pandemic”, commented Thomas W. Florsheim, Jr., the company’s Chairman and CEO. “However, we are seeing signs of improvement, as orders accelerated within our wholesale business late in the quarter. At retail our performance was strong due to the growth in e-commerce, and we are also seeing a resurgence in sales overseas, particularly at Florsheim Australia. We look forward to building on this momentum as we move throughout the year”, Mr Florsheim concluded,

In the first quarter of the fiscal year, net sales totalled 46.9 million US dollars compared to first quarter 2020 net sales of 63.6 million US dollars (declining by 26.3%). Earnings from operations increased to 1.6 million US dollars from 1.3 million US dollars in the first quarter of 2020. Net earnings were 1.3 million US dollars compared to 1.2 million US dollars in last year’s first quarter. Diluted earnings per share were 0.14 US dollars per share versus 0.12 US dollars per share in the first quarter of 2020.

North American Wholesale Segment

Net sales reached 33.4 million US dollars compared to 52.7 million US dollars in the first quarter of 2020 (decreasing by 36.6%). Last year’s first quarter included approximately two-and-a-half months of sales that occurred before the pandemic struck the US. In mid-March 2020 much of the country shut down, which resulted in a sharp drop in sales in the last few weeks of the quarter. First quarter 2021 sales continue to be impacted by the effects of the ongoing pandemic, resulting in lower demand for dress and dress-casual footwear. However, sales of the BOGS outdoor brand rose by 32% in the first quarter of 2021, as consumers continue to spend more time outdoors during the pandemic.

Gross earnings were 34.5% of net sales compared to 31.8% of net sales in last year’s first quarter. Last year’s gross margins were negatively impacted by a 15% tariff on certain footwear imported from China beginning in September 2019; the tariff was later reduced to 7.5% in February 2020. Gross margins improved in the first quarter of 2021 because the company sold through much of the higher-tariffed inventory during 2020. Earnings from operations were 1.4 million US dollars compared with 2.8 million US dollars in the first quarter of 2020. The decrease was due to lower sales, partially offset by higher gross margins and lower selling and administrative expenses.

North American Retail Segment

Net sales were 5.6 million US dollars compared to 4.8 million US dollars in last year’s first quarter. Same store sales were up by 32% for the quarter due to a 36% increase in e-commerce sales, mainly BOGS, offset by a 5% decline in brick-and-mortar same store sales. The company had four fewer brick-and-mortar stores operating as at the 31^st of March 2021, compared to the 31^stof March 2020. Operating earnings were 756.000 compared to operating losses of 89.000 US dollars in last year’s first quarter. The improvement was due to the benefit of closing unprofitable stores and higher earnings from the Company’s e-commerce businesses.

Other

Other net sales, which include the wholesale and retail sales of Florsheim Australia and Florsheim Europe, were 7.9 million US dollars compared to 6.1 million US dollars in the first quarter of 2020. This increase was due to 39% sales growth at Florsheim Australia, as compared to the prior year’s first quarter, with sales up in both its wholesale and retail businesses. The stronger Australian dollar relative to the US dollar also contributed to the increase, as Florsheim Australia’s net sales in local currency were up 19% for the quarter. Collectively, Florsheim Australia and Florsheim Europe had operating losses totalling 481.000 US dollars compared to operating losses of 1.3 million US dollars in the first quarter of 2020. The reduction in operating losses was due to improved performance at Florsheim Australia.

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