Weyco Group (WEYS) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales were $63.9 million, down 5% year-over-year, but net earnings reached a record $5.6 million, up 15% from last year, with diluted EPS rising to $0.59 from $0.50.

• Gross margin improved to 43.9% from 43.3% year-over-year, driven by higher wholesale margins.

• Wholesale operating earnings rose 8% to $5.8 million despite a 2% decline in wholesale sales; BOGS brand sales dropped 33%.

• Retail segment sales were flat, but operating earnings declined due to higher web advertising and freight costs.

• Florsheim Australia sales dropped 23%, impacted by the Asia-Pacific exit and challenging retail conditions.

Financial highlights

• Consolidated gross margin improved to 43.9% from 43.3% year-over-year; YTD gross margin was 44.4%.

• Net earnings per diluted share were $0.59, up from $0.50 last year; YTD diluted EPS was $1.28, flat year-over-year.

• Interest income rose to $1 million from $200,000, reflecting higher cash balances.

• Cash and marketable securities totaled $84.8 million at June 30, 2024, with no debt outstanding.

• Net cash provided by operating activities was $17.7 million for the first half, down from $43.6 million in the prior year period.

Outlook and guidance

• Retailers remain conservative in future order bookings, but at-once business is strong and inventory is well-positioned for a potential demand uptick.

• Management anticipates improved BOGS brand demand in the second half as retailer inventories normalize.

• 2024 annual capital expenditures estimated between $1 million and $3 million.

• Available liquidity, including cash, securities, and credit, is expected to support business needs for at least one year.