0001104659-26-027690
SEC filingWeyco Group reported net sales of $276.2 million for FY 2025, a decrease from $290.3 million in FY 2024. Net earnings declined to $23.1 million from $30.3 million in the prior year, with basic EPS of $2.44 compared to $3.21. Gross margin compressed to 43.2% from 45.3% due to incremental tariffs and cost pressures. Operating cash flow remained strong at $37.3 million, supporting dividend payments of $7.7 million and share repurchases of $5.3 million. The company maintained a solid balance sheet with $96.0 million in cash and no debt outstanding. Forward-looking challenges include ongoing tariff impacts, supply chain disruptions, and competitive pressures in the footwear market.
Weyco Group reported FY 2025 net sales of $276.2 million, a 4.9% decrease from $290.3 million in FY 2024. Net earnings declined 23.9% to $23.1 million from $30.3 million, with basic EPS of $2.44 compared to $3.21. Gross earnings decreased to $119.2 million from $131.5 million, representing gross margin compression from 45.3% to 43.2%. Operating income fell 20.3% to $29.2 million. The company maintained strong operating cash flow of $37.3 million, ending the year with $96.0 million in cash and cash equivalents, up from $71.0 million at the end of FY 2024.
Revenue declined across all major segments. The North American Wholesale segment, representing 78% of total sales, decreased 4.9% to $216.8 million. The North American Retail segment declined 7.7% to $35.7 million, representing 13% of sales. Other operations (Australia and South Africa) contributed $23.7 million or 9% of sales, essentially flat year-over-year. Geographically, U.S. sales accounted for 85% of total revenue at $235.3 million, followed by Canada ($17.2 million), Australia ($21.3 million), and South Africa ($2.4 million). The company cited incremental tariffs, competitive pressures, and changing consumer preferences toward casual footwear as key factors impacting sales.
Gross margin declined 210 basis points to 43.2% primarily due to incremental tariffs on imported goods, which increased product costs. The company paid approximately $16 million in incremental tariffs during 2025. Selling and administrative expenses decreased to $90.1 million from $94.9 million, representing 32.6% of sales compared to 32.7% in the prior year. Operating margin declined to 10.6% from 12.6%. Interest income contributed $3.0 million, partially offsetting margin pressure. The effective tax rate increased to 28.0% from 23.9% due to changes in valuation allowances and foreign tax effects.
Operating cash flow remained strong at $37.3 million, driven by net earnings of $23.1 million and working capital improvements, particularly inventory reduction of $8.1 million. Investing activities used $0.2 million primarily for property, plant and equipment purchases. Financing activities used $13.2 million for dividends ($7.7 million), share repurchases ($5.3 million), and tax payments on equity awards. The company ended with $96.0 million in cash, total assets of $319.7 million, and total liabilities of $80.1 million. No debt was outstanding on the $40 million credit facility. Total equity stood at $239.6 million.
The company faces ongoing challenges from U.S. trade policies, with the Supreme Court invalidating the statutory basis for incremental tariffs in February 2026, creating potential for refunds of approximately $16 million paid in 2025. However, new tariffs of 10% have been announced under different authority. Management cited risks including supply chain disruptions, foreign currency fluctuations, competitive pressures, and changing consumer preferences. The company continues to focus on e-commerce growth and maintaining its brand portfolio while managing cost pressures from tariffs and inflation. No specific quantitative guidance was provided for FY 2026.