WEYS 10-K & 10-Q changes, risk factors and insider trading
Weyco Group Inc. · Nasdaq · Wholesale-Apparel, Piece Goods & Notions · CIK 106532 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Largest changes
“As of the filing date of this Form 10-K, the current U.S. presidential administration has imposed tariffs on foreign imports into the United States, including, most relevant to us, an additional 20% tariff on all imports from China. These tariffs will increase the cost of certain products and could negatively impact our results of operations. At this time, it remains unclear what additional actions, if any, will be taken by the U.S. …”see in full comparison
We accept and fill the majority of our larger customers’ orders through the use of Electronic Data Interchange (EDI), and we rely on our warehouse management system to efficiently process orders. Our corporate office relies on computer systems to efficiently process and record transactions. Significant interruptions in EDI, information and communication systems from power loss, telecommunications failure, malicious attacks, or computer system failure or other causes could significantly disrupt our business and operations, as well as damage our reputation. In addition, we sell footwear on our websites, and failures of our or other retailers’ websites could adversely affect our sales, results, and reputation. The increasing sophistication of cyber threats, including those enabled by artificial intelligence (AI) tools, may increase the likelihood of attempts to compromise our systems or those of our third-party providers. Any such disruption or compromise could result in operational delays, data loss, increased costs, reputational harm, or litigation exposure, which could have a material adverse effect on our business, financial condition, and results of operation.see in full comparison
Ongoingsee in full comparisonconflicts, such as the war between Russiamilitary andUkrainepoliticaland the Gaza war in the Middle East,conflicts have adversely affected the global economy and contributed to geopolitical instability. These situations remain uncertain, and it is difficult to predict the impact that the conflicts and actions taken in response to them will have on our business. Our business may be impacted as a result of various factors, including inflation and actions taken to combat inflation, increased energy prices, a slowing U.S. economy,moreocean freight disruptions, increased cyber-attacks, and reduced consumer confidence.
U.S. and global financial markets have at times been unstable and unpredictable, which has generally resulted in tightened credit markets with heightened lending standards and terms. Ongoingsee in full comparisonconflicts, such as the war between Russiamilitary andUkrainepoliticaland the Gaza war in the Middle East,conflicts have adversely affected the global economy and contributed to geopolitical instability. Volatility and instability in the credit markets pose various risks to us, including, among others, a negative impact on retailer and consumer confidence, limits to our customers’ access to credit markets and interference with the normal commercial relationships between us and our customers. Increased credit risks associated with the financial condition of some customers in the retail industry affects their level of purchases from us and the collectability of amounts owed to us, and in some cases, causes us to reduce or cease shipments to certain customers who no longer meet our credit requirements.
“In February 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs and remanded related matters for further proceedings, however, certain other tariffs remain in effect. U.S. trade policies remain fluid and unpredictable. We cannot predict the timing or outcome of any proceedings relating to the incremental tariffs or whether, when or to what extent we will ultimately receive any refunds of amounts previously paid.”see in full comparison
Our success is dependent upon our ability to accurately anticipate and respond to rapidly changing fashion trends and consumer preferences. For example,see in full comparisonas a result of the COVID-19 pandemic,purchases of dress and other dress-casual footwear were negatively affectedinduring2020thethroughCOVID-19early 2022pandemic as many consumers worked fromhome due to stay-at-home orders or otherwise,home, and socialas well asand other occasion-related events were cancelled.Furthermore,Although many of these conditions have improved and evolved, consumersarecontinueincreasinglytogravitatinggravitate toward casual shoes in lieu of traditional dress footwear. Additionally, a large portion of BOGS product is weather dependent and therefore can be negatively impacted by weather trends in North America. Failure to predict or effectively respond to trends or preferences could have an adverse impact on our sales volume and overall performance, as well as have a negative impact on our reputation.
Full comparison: every changed paragraph (8)
There are various factors that affect or might affect our business, results of operations and financial condition, many of which are beyond our control. The following is a description of some of the material factors that could materially and adversely affect our reputation, business, results of operations and financial condition. These disclosures reflect the Company’s beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.
In February 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs and remanded related matters for further proceedings, however, certain other tariffs remain in effect. U.S. trade policies remain fluid and unpredictable. We cannot predict the timing or outcome of any proceedings relating to the incremental tariffs or whether, when or to what extent we will ultimately receive any refunds of amounts previously paid.
As of the filing date of this Form 10-K, the current U.S. presidential administration has imposed tariffs on foreign imports into the United States, including, most relevant to us, an additional 20% tariff on all imports from China. These tariffs will increase the cost of certain products and could negatively impact our results of operations. At this time, it remains unclear what additional actions, if any, will be taken by the U.S. or other governments with respect to international trade agreements, the imposition of additional tariffs on goods imported into the U.S., tax policy related to international commerce, increased export control, sanctions and investment restrictions, or other trade matters. Although the ultimate scope and timing of any such actions is currently indeterminable, if implemented, they could have a material impact on our financial condition and results of operations.
As the popularity of online shopping for consumer goods continues to increase, our retail partners in the U.S. and abroad may experience decreased foot traffic, which could negatively impact their businesses. In addition, significant health pandemics (such as the recent COVID-19 pandemic) or outbreaks of infectious diseases could also lead to decreases in foot traffic. Decreases in foot traffic had, and in the future may have, a negative impact on our sales to those customers, and adversely affect our results of operations.
Our success is dependent upon our ability to accurately anticipate and respond to rapidly changing fashion trends and consumer preferences. For example, as a result of the COVID-19 pandemic, purchases of dress and other dress-casual footwear were negatively affected induring 2020the throughCOVID-19 early 2022pandemic as many consumers worked from home due to stay-at-home orders or otherwise,home, and social as well asand other occasion-related events were cancelled. Furthermore,Although many of these conditions have improved and evolved, consumers arecontinue increasinglyto gravitatinggravitate toward casual shoes in lieu of traditional dress footwear. Additionally, a large portion of BOGS product is weather dependent and therefore can be negatively impacted by weather trends in North America. Failure to predict or effectively respond to trends or preferences could have an adverse impact on our sales volume and overall performance, as well as have a negative impact on our reputation.
Ongoing conflicts, such as the war between Russiamilitary and Ukrainepolitical and the Gaza war in the Middle East,conflicts have adversely affected the global economy and contributed to geopolitical instability. These situations remain uncertain, and it is difficult to predict the impact that the conflicts and actions taken in response to them will have on our business. Our business may be impacted as a result of various factors, including inflation and actions taken to combat inflation, increased energy prices, a slowing U.S. economy, more ocean freight disruptions, increased cyber-attacks, and reduced consumer confidence.
We accept and fill the majority of our larger customers’ orders through the use of Electronic Data Interchange (EDI), and we rely on our warehouse management system to efficiently process orders. Our corporate office relies on computer systems to efficiently process and record transactions. Significant interruptions in EDI, information and communication systems from power loss, telecommunications failure, malicious attacks, or computer system failure or other causes could significantly disrupt our business and operations, as well as damage our reputation. In addition, we sell footwear on our websites, and failures of our or other retailers’ websites could adversely affect our sales, results, and reputation. The increasing sophistication of cyber threats, including those enabled by artificial intelligence (AI) tools, may increase the likelihood of attempts to compromise our systems or those of our third-party providers. Any such disruption or compromise could result in operational delays, data loss, increased costs, reputational harm, or litigation exposure, which could have a material adverse effect on our business, financial condition, and results of operation.
U.S. and global financial markets have at times been unstable and unpredictable, which has generally resulted in tightened credit markets with heightened lending standards and terms. Ongoing conflicts, such as the war between Russiamilitary and Ukrainepolitical and the Gaza war in the Middle East,conflicts have adversely affected the global economy and contributed to geopolitical instability. Volatility and instability in the credit markets pose various risks to us, including, among others, a negative impact on retailer and consumer confidence, limits to our customers’ access to credit markets and interference with the normal commercial relationships between us and our customers. Increased credit risks associated with the financial condition of some customers in the retail industry affects their level of purchases from us and the collectability of amounts owed to us, and in some cases, causes us to reduce or cease shipments to certain customers who no longer meet our credit requirements.
Management's Discussion & Analysis (MD&A)
New heading “CONSOLIDATED RESULTS OF OPERATIONS”
New heading “Operating Activities”
New heading “Investing Activities”
New heading “Financing Activities”
New heading “Financing Activities – Non-cash”
Removed heading “Sales Returns, Sales Allowances and Doubtful Accounts”
Largest changes
“On February 20, 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs, invalidating the statutory basis for incremental tariffs enacted since February 2025. The matter has been remanded to the Court of International Trade for further proceedings, including issues relating to implementation and potential refunds. We paid approximately $16 million of incremental tariffs in 2025. …”see in full comparison
“For an extended period during the second quarter, we faced incremental tariff rates that rendered trade with China, our largest sourcing country, commercially prohibitive. Because the second quarter is a primary manufacturing period for our key Fall shipping window, this created a strong likelihood of disrupted deliveries to both our wholesale partners and our direct-to-consumer business. …”see in full comparison
“In early 2025, the U.S. government imposed additional tariffs on goods sourced from China. These tariffs will increase our costs of goods across all brands. In an effort to mitigate the impact of the tariffs, we have already begun negotiating price reductions with a number of our Chinese suppliers and are in the process of reviewing our wholesale pricing for Fall.”see in full comparison
“Throughout 2025, new tariffs increased the cost of our products, resulting in gross margin compression despite a 10% price increase that took effect in July. Over the past year, we also made progress in diversifying our manufacturing base to be less China-centric.”see in full comparison
Wholesale gross earnings as a percent of net sales were 37.5% in 2025 and 40.2% insee in full comparison2024 and 39.7% in 2023.2024. Gross marginsimprovedforbecausetheofyearlowerwereinventorynegativelycosts,impactedprimarilybyinboundincrementalfreight.tariffs,Sellingdiscussed above. Wholesale selling and administrative expensesfor the Wholesale segmentconsist primarily of distribution costs, salaries and commissions, advertising costs, employee benefit costs, and depreciation.SellingWholesale selling and administrative expenses totaled $54.6 million for the year and $60.1 millioninlast2024 compared to $66.0 million in 2023.year. The decreaseinwas2024 waslargely due to lower employeecosts, mainly commission-based compensation, as well as lower advertising costs (primarily due to the reallocation of certain costs to the Retail segment, described below).costs. As a percent of net sales, wholesale selling and administrative expenses wereflat25%atand 26% inboth 20242025 and2023.2024, respectively. Wholesale operating earningsweretotaled $26.6 million for 2025, down 16% from $31.5 million in 2024,downdue5% from record operating earnings of $33.3 million in 2023, mainly as a result ofto lowersales.sales volumes and gross margins.
Full comparison: every changed paragraph (66)
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.BOGS. Inventory is purchased from third-party overseas manufacturers. Almost all of these foreign-sourced purchases are denominated in U.S. dollars. 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 included our wholesale and retail businesses in Australia,Australia and South Africa, and Asia PacificAfrica (collectively, “Florsheim Australia”). WeFlorsheim ceasedAustralia previously included operations in the AsiaAsia-Pacific Pacificregion, regionbut in 2023 andwe 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.
In early 2025, the U.S. imposed reciprocal and retaliatory (“incremental”) tariffs on imported goods. Throughout 2025, incremental tariffs increased the cost of our products, resulting in gross margin compression.
On February 20, 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs, invalidating the statutory basis for incremental tariffs enacted since February 2025. The matter has been remanded to the Court of International Trade for further proceedings, including issues relating to implementation and potential refunds. We paid approximately $16 million of incremental tariffs in 2025. In December 2025, we filed a lawsuit seeking a refund for amounts paid in connection with the incremental tariffs imposed pursuant to IEEPA.
The President responded to the ruling by announcing the implementation of a 10% across-the-board tariff under a separate statutory authority. The Administration has indicated that rates could be increased, subject to statutory limits. Certain other tariffs imposed under authorities independent of IEEPA remain in effect. U.S. trade policies remain fluid and unpredictable, creating near-term gross margin uncertainty. We have mitigation strategies in place and will continue to adjust as needed in response to future policy developments.
The retail landscape was challenged in 2024 due to economic uncertainties and inflation. These factors created an environment in which price-sensitive consumers limited their discretionary spending on non-essential goods, and footwear market sales were impacted accordingly. The footwear sector was further challenged by a warmer Fall season, which dampened sales of seasonal footwear. From a style perspective, consumers are increasingly gravitating toward casual shoes in lieu of traditional dress footwear. These broader industry headwinds and trends impacted our Wholesale business in 2024.
In early 2025, the U.S. government imposed additional tariffs on goods sourced from China. These tariffs will increase our costs of goods across all brands. In an effort to mitigate the impact of the tariffs, we have already begun negotiating price reductions with a number of our Chinese suppliers and are in the process of reviewing our wholesale pricing for Fall.
2025 was a difficult year for the Company, with sales declining 5% compared to 2024. While we are never content with a decline, given the challenges we faced related to tariffs and dampened consumer sentiment, we are pleased with the work done by our production and sales teams to navigate these economic headwinds.
For an extended period during the second quarter, we faced incremental tariff rates that rendered trade with China, our largest sourcing country, commercially prohibitive. Because the second quarter is a primary manufacturing period for our key Fall shipping window, this created a strong likelihood of disrupted deliveries to both our wholesale partners and our direct-to-consumer business. By strategically keeping production running on key programs and holding finished goods overseas, we positioned ourselves to deliver nearly 100% of our Fall shipments on time once tariffs were reduced to commercially viable levels.
Throughout 2025, new tariffs increased the cost of our products, resulting in gross margin compression despite a 10% price increase that took effect in July. Over the past year, we also made progress in diversifying our manufacturing base to be less China-centric.
Sales of our combined legacy business declined 4% for the year. Given the uncertain economic environment, particularly in soft goods, our Wholesale customers continued to take a conservative approach to inventory management.
The Florsheim brand achieved record sales of $92.0 million in 2025, a 2% increase over 2024. Sell-throughs of traditional dress and refined casual footwear have been strong, and the brand continues to make progress in the hybrid and dress sneaker categories.
Our Nunn Bush business declined 10% for the year. The mid-tier trade channels, which account for the majority of Nunn Bush’s volume, remained under pressure, negatively impacting sales. As an opening price-point brand with major retailers, Nunn Bush also faces increased competition from private-label programs, as stores seek to improve margins. We believe we are taking the necessary steps to return Nunn Bush to growth, including value engineering product to meet key price points while delivering attributes and benefits not typically found in private-label offerings. Retail sell-through of Nunn Bush remains solid.
Stacy Adams’ sales declined 9% for the year, reflecting continued challenges in the fashion dress shoe market. While the Stacy Adams brand remains a leader in this category, retailers are devoting less inventory and shelf space to dress shoes. Our focus with Stacy Adams continues to be on expanding categories beyond its core elevated dress offerings.
The BOGS business remains difficult, with sales down 11% for the year. While early winter cold and snowfall resulted in strong sell-through of BOGS product, Fall sell-in declined year over year as retailers maintained a conservative, chase-based inventory strategy for seasonal product. Retailers ended the season with lower inventory levels, and we are now seeing strong booking increases for Fall 2026. While we are optimistic about improvement this year, we remain mindful of the long-term impact of climate change on the weather boot category. Our priority continues to be the development of footwear designed for multi-season use.
During 2025, we made the strategic decision to wind down operations of the Forsake brand due to its sustained lack of growth and profitability. This decision is part of our ongoing effort to optimize our brand portfolio and focus on those brands with the greatest potential for long-term success. The closure of Forsake is not expected to have a material impact on our consolidated financial statements.
Net sales in our retail segment declined 8% for the year. In 2025, our e-commerce consumer was increasingly value-oriented. While our overall inventory position is cleaner than in the prior two years, which is positive, it resulted in lower conversion among customers motivated by clearance discounts. As we enter 2026, we remain disciplined in our approach to inventory management and anticipate a lower level of clearance sales.
Florsheim Australia’s net sales increased for the year, increasing 2% in local currency. Florsheim Australia, which includes New Zealand, South Africa, and our Asia wholesale business, remains a work in progress. While certain areas, such as Australian e-commerce, delivered solid gains, we continue to face challenges in our Australian wholesale business, where improvements are necessary to drive profitability.
2024 was a difficult year for our Wholesale segment, with sales down 9% compared to 2023, due to reduced consumer demand amid ongoing economic uncertainty and a challenging outdoor footwear market. Despite these challenges, we are navigating short-term pressures and evolving our portfolio of brands to position the Company for future growth.
BOGS sales declined 27% in 2024, compared to the prior year. The brand was impacted by reduced retailer orders early in the year due to an inventory glut in the outdoor market, which has since eased. BOGS was further challenged in the second half of the year by mild Fall and Winter weather, which reduced consumers' urgency to purchase new boots. Consequently, pre-holiday demand for insulated and waterproof footwear was softer than anticipated. However, winter weather did eventually arrive across much of the U.S. in January and February 2025, and retailers are now moving through inventory. With leaner stock levels, our retail partners are in a better position to bring in fresh assortments, and we are starting to see renewed interest in the category for Fall 2025. The last two years have been challenging for BOGS, and we are focused on reenergizing the brand through product innovation and expanding its retail presence in the Spring/Summer selling season.
Net sales of our legacy businesses (comprised of the Florsheim, Stacy Adams and Nunn Bush brands) were collectively down 4% for the year. At the brand level, Florsheim’s sales were up 2%, while Stacy Adams and Nunn Bush were down 13% and 6%, respectively, for the year. The dress footwear category faced challenges in 2024 as retailers prioritized other segments. Despite this trend, Florsheim’s sales improved as a result of increased market share in the refined dress footwear category and expanded sales of hybrid and casual footwear.
Stacy Adams had a difficult 2024, reflecting broader challenges in the dress footwear market. The brand remains a leader in contemporary dress footwear and continues to perform well in retail accounts that emphasize dress shoes. Future growth depends on the brand diversifying its product assortment to capture demand for hybrid and refined casual styles. While it will take time, we are getting traction at retail with casual lifestyle product, particularly in the hybrid category.
Nunn Bush sales were down 6% for the year. We saw reduced demand for the brand in the first nine months of 2024, with sales improving in the final quarter. With a strong value proposition and innovative comfort technology, Nunn Bush has evolved beyond the dress shoe category and is experiencing retail success in the casual, hybrid, and soft-toe work categories. Over the last few years, Nunn Bush has built a meaningful presence in the work shoe category, which we believe will help drive sales growth in future years.
In our Retail segment, sales were up 2% for the year, driven by higher direct-to-consumer sales of Florsheim and BOGS footwear. We continue to invest in our e-commerce platform as we believe it is a key driver of profitable growth.
Florsheim Australia’s sales declined 20% for the year. The decline in 2024 was largely due to the closure of our Asia Pacific operations, as the division had historically not been profitable. We are now managing our Asia-Pacific wholesale customers through our Melbourne, Australia office. While 2024 was a challenging year for Florsheim Australia, we are pleased with the increase in same-store retail sales in Australia. Our focus for 2025 is growth of Florsheim Australia’s wholesale business.
Consolidated net sales for 20242025 were $290.3$276.2 million, down 9%5% compared to $318.0$290.3 million in 2023.2024. Consolidated gross earnings as a percent of net sales were 45.3%43.2% and 44.9%45.3% in 20242025 and 2023,2024, respectively. Operating earnings were $36.6$29.2 million, down 11%20% compared to $41.0$36.6 million in 2023, because of lower sales.2024. Net earnings were a$23.1 recordmillion, or $2.41 per diluted share, in 2025, down from $30.3 million, or $3.16 per diluted share, in 2024, up slightly over our previous record of $30.2 million, or $3.17 per diluted share, in 2023.2024.
At December 31, 2024,2025, our cash and marketable securities totaled $77.3$100.9 million and we had no debt outstanding on our $40.0 million revolving line of credit. During 2024,2025, we generated $37.7$37.3 million of cash from operations. We used cash to prefund our $21.6 million regular fourth quarter and one-time special dividend, which were paid to shareholders on January 2, 2025; pay $9.7$7.7 million in dividends; anddividends, repurchase $0.6$5.3 million of our common stockstock, and we had $1.8 million of capital expenditures during the year. WeAdditionally, alsoduring hadJanuary $1.42026, we paid our 2025 fourth quarter and special cash dividends totaling $21.4 million ofto capital expenditures.shareholders.
CONSOLIDATED RESULTS OF OPERATIONS
Consolidated net sales declined 5% for the year, due mainly to lower demand in our Wholesale segment.
Consolidated gross earnings as a percentage of net sales were 43.2% in 2025, and 45.3% in 2024. The decrease in 2025 was primarily due to higher costs resulting from incremental tariffs enacted this year. 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 were $19.9 million and $21.5 million for the years ended December 31, 2025 and 2024, respectively.
Consolidated selling and administrative expenses as a percent of net sales were 33% in both 2025 and 2024.
Consolidated earnings from operations for 2025 were down 20% from the prior year. The decrease in 2025 mainly resulted from lower sales volumes and gross margins in our Wholesale segment.
Interest income decreased $0.7 million for the year, due mainly to lower interest rates in 2025. Other expense, net, primarily includes the non-service cost components of pension expense and net gains and losses on foreign currency transactions. The expense decreased in 2025, due to lower pension expense.
Our effective tax rates for 2025 and 2024 were 28.0% and 23.9%, respectively. See Note 13 in the Notes to Consolidated Financial Statements for additional information on income taxes.
Consolidated net earnings for 2025 were down 24% compared to 2024. The decrease mainly resulted from lower operating earnings in our Wholesale segment this year.
Net sales and earnings from operations for our segments,reportable assegments welland as ourthe “other” operations,category infor the years ended December 31, 20242025 and 2023,2024, were as follows:
NM – Not meaningful
WholesaleSales netof Stacy Adams, Nunn Bush, and BOGS brands were down for the year, mainly as a result of lower demand, partially offset by the July 1, 2025 price increase. Conversely, Florsheim sales reached a record $92.0 million in 2025, driven by increased sales of dress and hybrid footwear. All our major brands’ sales were collectivelyadversely downaffected inby 2024a duelarge mainlycustomer who failed to lowertimely consumeradopt demand.our Ournew BOGSpricing brand experienced the largest decrease, with orders down earlystructure in the yearthird becausequarter of an inventory glut in the outdoor market, which has since eased, and due to mild weather across the northern U.S. in the final months of 2024.2025. Licensing revenues consist of royalties earned on sales of branded apparel, accessories, and specialty footwear in the United States and on branded footwear in Mexico and certain overseas markets. Licensing revenues decreased in 2024,2025, compared to 2023,2024, in line with decreased licensees’ sales of branded products.
Wholesale gross earnings as a percent of net sales were 37.5% in 2025 and 40.2% in 2024 and 39.7% in 2023.2024. Gross margins improvedfor becausethe ofyear lowerwere inventorynegatively costs,impacted primarilyby inboundincremental freight.tariffs, Sellingdiscussed above. Wholesale selling and administrative expenses for the Wholesale segment consist primarily of distribution costs, salaries and commissions, advertising costs, employee benefit costs, and depreciation. SellingWholesale selling and administrative expenses totaled $54.6 million for the year and $60.1 million inlast 2024 compared to $66.0 million in 2023.year. The decrease inwas 2024 waslargely due to lower employee costs, mainly commission-based compensation, as well as lower advertising costs (primarily due to the reallocation of certain costs to the Retail segment, described below).costs. As a percent of net sales, wholesale selling and administrative expenses were flat25% atand 26% in both 20242025 and 2023.2024, respectively. Wholesale operating earnings weretotaled $26.6 million for 2025, down 16% from $31.5 million in 2024, downdue 5% from record operating earnings of $33.3 million in 2023, mainly as a result ofto lower sales.sales volumes and gross margins.
Our costs of sales do not include distribution costs (e.g., receiving, inspection, warehousing, shipping, and handling costs) which are included in selling and administrative expenses. Wholesale distribution costs were $14.4 million and $15.5 million for the years ended December 31, 2024 and 2023, respectively. Our gross earnings may not be comparable to other companies, as some companies may include distribution costs in cost of sales.
Retail net sales were $35.7 million in 2025, down 8% from a record $38.7 million in 2024, up 2% over our previous record of $38.0 million in 2023.2024. The increasedecrease was primarily due to higherlower direct-to-consumer sales of FlorsheimFlorsheim, BOGS and BOGSStacy Adams footwear. SalesBOGS atwebsite our four domestic brick and mortar storessales were downalso 4%impacted forby thefewer year.promotional activities in 2025.
Retail gross earnings as a percent of net sales were 65.7% and 65.9% in 2025 and 2024, respectively. Retail operating earnings totaled $3.3 million for 2025 and $5.3 million last year. The decrease was primarily due to lower sales volumes. 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 flat at $20.2 million in both 2025 and 2024. As a percent of net sales, Retail selling and administrative expenses were 57% in 2025 and 52% in 2024. Retail operating earnings were $3.3 million in 2025, down 38% from $5.3 million in 2024, mainly due to lower sales volumes.
Retail gross earnings as a percent of net sales were flat at 65.9% in both 2024 and 2023. 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 $20.2 million, or 52% of net sales, for the year compared to $18.3 million, or 48% of net sales, in 2023. The increase in expense was primarily due to higher advertising costs. This year’s web advertising costs were up largely due to the reallocation of certain expenditures historically charged to our Wholesale segment that primarily benefit our websites. Retail operating earnings were $5.3 million in 2024, down 21% compared to record operating earnings of $6.8 million in 2023, mainly due to higher retail selling and administrative expenses in 2024.
Our other operations consistedconsist of our retail and wholesale businesses in Australia,Australia and South Africa, and Asia PacificAfrica (collectively, “Florsheim Australia”). WeFlorsheim ceasedAustralia previously included operations in the AsiaAsia-Pacific Pacificregion, regionbut in 2023 andwe completed the wind down of that business in 2024. Accordingly,Florsheim 2024Australia’s resultsnet sales remained relatively flat at $23.7 million and $23.6 million in 2025 and 2024, respectively. In local currency, Florsheim Australia’s net sales were up 2% for the year, driven by growth in its retail businesses. Florsheim Australia’s gross earnings as a percentage of thenet “other”sales categorywere primarily61.5% reflectand the61.0% operationsin of2025 and 2024, respectively. Florsheim Australia generated operating losses totaling $0.7 million for 2025 and South$0.2 Africa.million in 2024.
Net sales at Florsheim Australia totaled $23.6 million in 2024, down 20% from $29.6 million in 2023. The decrease was primarily due to closing our Asia Pacific operations, as the division had historically not been profitable. Sales in Australia were down 10% for the year, due mainly to the impact of six fewer retail stores operating compared to last year. Australia’s same store sales were up 2% for the year. Florsheim Australia’s gross earnings were 61.0% of net sales in 2024 versus 62.5% of net sales in 2023. Florsheim Australia generated operating losses of $0.2 million in 2024 compared to operating earnings of $1.0 million in 2023. The decrease was a result of lower sales.
Most of our interest income is generated by investments in money market mutual funds and marketable securities. Interest income totaled $3.0 million in 2025 compared to $3.7 million in 20242024. comparedThe to $1.1 milliondecrease in 2023. The increase2025 was due to higherless interest earned on cash balancesbalances, inresulting themainly U.S.from and Canada this year. Interest expense was nominal in 2024 and $0.5 million in 2023. Last year’slower interest expense was on outstanding debt balances during the first half of 2023, which have since been paid off.rates. Other expense, net, totaled $0.1 million in 2025 and $0.4 million in 2024 and $0.7 million in 2023.2024. Other expense was down in 20242025 due mainly to a decrease in the non-service cost components of pension expense.
Our effective tax rates for 2025 and 2024 were 28.0% and 23.9%, respectively. The 2025 effective tax rate wasdiffered 23.9%from inthe 2024U.S. versusfederal 26.1%statutory inrate 2023.of 21% because of state taxes and the establishment of a valuation allowance on Florsheim Australia’s deferred tax assets. The 2024 effective tax rate differed from the U.S. federal statutory rate of 21% due mainly to the impact of state income taxes partially offset by income tax benefits from share-based compensation. The 2023 effective tax rate differed from the U.S. federal statutory rate of 21% due mainly to the impact of state income taxes.
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.
Operating Activities
Net cash provided by operating activities totaled $37.3 million for 2025, down from $37.7 million last year. The decrease was driven by lower net earnings. This impact was mostly offset by favorable cash flows from inventory, as the inventory balance decreased relative to the prior year. We believe our inventory levels are at a healthy level as we move into 2026.
Investing Activities
Net cash used in investing activities totaled $0.2 million in 2025, compared to $1.2 million in 2024. The decrease in cash usage was primarily due to higher proceeds from maturities and sales of marketable securities. Capital expenditures amounted to $1.8 million in 2025 and $1.4 million in 2024. Looking ahead, we expect total capital expenditures to range between $1.0 million and $3.0 million in 2026.
Financing Activities
Net cash used for financing activities totaled $13.2 million and $32.2 million in 2025 and 2024, respectively. The decrease was largely driven by a timing difference in our fourth-quarter and special cash dividend payments. The 2025 fourth-quarter and special dividend totaling $21.4 million was funded after year-end (in January 2026) while the 2024 fourth-quarter and special dividend totaling $21.6 million was pre-funded prior to year-end (in December 2024).
Cash dividends paid in 2025 totaled $7.7 million and included three dividend payments that were both declared and paid in 2025. Cash dividends paid in 2024 totaled $9.7 million and included four dividend payments: one that was declared in the fourth quarter of 2023 and paid in 2024 and three that were both declared and paid in 2024.
On March 3, 2026, our Board of Directors declared a first-quarter cash dividend of $0.27 per share to all shareholders of record on March 13, 2026, payable March 31, 2026.
Our primary sources of liquidity are cash and short-term marketable securities, which aggregated $71.8 million and $69.5 million at December 31, 2024 and 2023, respectively, and our revolving line of credit. We generated $37.7 million of cash from operations in 2024 compared to $98.6 million in 2023. Fluctuations in net cash from operating activities mainly resulted from changes in operating assets and liabilities, most significantly, inventory. The significant cash from operations in 2023 was caused by reductions in inventory from peak levels at the end of 2022.
Our capital expenditures totaled $1.4 million and $3.3 million in 2024 and 2023, respectively. Last year’s capital expenditures included costs related to equipment installed in our Glendale distribution center that automates the packing and labeling process of single pair orders. Looking ahead, we expect capital expenditures will be between $1.0 million and $3.0 million in 2025.
We paid cash dividends totaling $9.7 million and $9.3 million in 2024 and 2023, respectively. Additionally, in 2024 we prefunded our regular fourth quarter dividend of $0.26 per share as well as a one-time special cash dividend of $2.00 per share, for a total of $21.6 million; this dividend was paid to shareholders on January 2, 2025. We resumed our regular quarterly dividends in the first quarter of 2025. On March 4, 2025, our Board of Directors declared a quarterly cash dividend of $0.26 per share to all shareholders of record on March 14, 2025, payable March 31, 2025.
We repurchase our common stock under our share repurchase program when we believe market conditions are favorable. In 2025, we purchased 176,691 shares at a total cost of $5.3 million through our share repurchase program. In 2024, we repurchasedpurchased 19,841 shares forat a total cost of $0.6 million through our share repurchase program. In 2023, we repurchased 170,422 shares for a total cost of $4.3 million through our share repurchase program. As of December 31, 2024,2025, there were 848,916672,225 authorized shares available for repurchaseremaining under the program.
On September 27,26, 2024,2025, we amended our line of credit agreementagreement. toThe extendAmendment (“Amended Credit Agreement”) extended the maturity of our credit facility to September 26,25, 2025.2026, and reduced the interest rate margin applicable to amounts outstanding by 15 basis points. 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 secured overnight financing rate (“SOFR”) plus 125110 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 December 31, 20242025 and 2023,2024, there were no outstanding borrowings on the line of credit, and we were in compliance with all financial covenants.
What changed in the latest 10-Q
Risk Factors
We could not find a separate Risk Factors item in the latest 10-Q. Some companies leave it out of quarterly reports; see the annual 10-K risk factors and the original filing. Open the filing on SEC.gov.
Management's Discussion & Analysis (MD&A)
Largest changes
Following the U.S. Supreme Court'ssee in full comparisonruling,ruling in February, thePresidentAdministrationannounced the implementation ofimposed anew10%across-the-boardincremental tariff under a separate statutory authority,currentlywhichsetremainedatin10%,effectalthoughthroughout thescopesecond quarter. On July 24, 2026, the Administration increased the incremental tariff on imports from China, Dominican Republic, andrate remain subjectVietnam tochange.12.5%. U.S. trade policies continue to evolve and remain unpredictable, creatingnear-termnear term gross margin uncertainty. We have mitigation strategies in place and will continue to adjust, as appropriate, in response to future policy developments.
“In early 2025, the U.S. imposed tariffs on certain imported goods under the International Emergency Economic Powers Act (“IEEPA”). During 2025 and the first quarter of 2026, we paid approximately $19.8 million in IEEPA tariffs. In February 2026, the U.S. Supreme Court invalidated IEEPA tariffs, and in April 2026, U.S. Customs and Border Protection (“CBP”) commenced a phased process for accepting refund claims. Accordingly, in April, we submitted refund claims for our Phase 1 entries totaling $18.6 million, substantially all of which were approved during the second quarter. …”see in full comparison
Wholesale gross earnings as a percent of net sales weresee in full comparison38.7%70.0% and39.4%37.6% in thefirstsecond quarters of 2026 and 2025, respectively.Gross margins forFor thequarteryear-to-datecontinuedperiod, gross earnings as a percent of net sales were 53.6% in 2026 and 38.6% in 2025. The increases were primarily due tobethenegativelyrecognitionimpactedofby$14.3incrementalmilliontariffs,inpartiallytariffoffsetrefunds,byas well as the benefit of selling price increasesinstitutedimplemented in the second half oflast year.2025. Wholesale selling and administrative expenses totaled$13.8$18.1 million, or26%37% of net sales, for the quarter versus$14.8$13.1 million, or27%29% of net sales, last year. For the year-to-date period, Wholesale selling and administrative expenses totaled $31.9 million, or 31% of net sales, versus $27.9 million, or 28% of net sales, last year. Thedecreasesincreases in 2026 selling and administrative expenses werelargelyprimarily due tolowerhigher employeecosts.costs incurred in the second quarter.
“Consolidated gross earnings as a percent of net sales were 70.4% and 43.3% in the second quarters of 2026 and 2025, respectively. For the year-to-date period, consolidated gross earnings were 56.7% in 2026 and 44.0% in 2025. The increases in 2026 were primarily due to tariff refunds recognized in the second quarter. 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. …”see in full comparison
“On February 20, 2026, the U.S. Supreme Court ruled that IEEPA does not authorize the President to impose tariffs, declaring the IEEPA tariffs invalid. In April 2026, U.S. Customs and Border Protection (“CBP”) commenced a phased process to accept claims for potential refunds of IEEPA tariffs previously paid. The refund process formally opened on April 20, 2026, and on that date, we submitted claims covering our Phase 1 entries totaling $18.6 million. The timing for submitting claims related to our Phase 2 entries, totaling $1.2 million, has not yet been established. …”see in full comparison
“Consolidated gross earnings as a percent of net sales were 44.2% and 44.6% in the first quarters of 2026 and 2025, respectively. The decrease in 2026 was primarily due to higher costs resulting from incremental tariffs, partially offset by selling price increases instituted in the second half of last year. 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. …”see in full comparison
Full comparison: every changed paragraph (71)
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-endedyear ended December 31, 2025, filed on March 13, 2026, 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.
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. We made the strategic decision to close our four U.S brick and mortar retail stores at the end of their lease terms. The first store closed at the end of June, and the remaining three are planned to close over the next seven months. Retail sales are made directly to consumers on our websites, or by our employees in our stores. Our “other” operations include our retail and wholesale businesses in Australia and South Africa (collectively, “Florsheim Australia”). 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 Business Trends – Incremental TariffsTariff Status
In early 2025, the U.S. imposed tariffs on certain imported goods under the International Emergency Economic Powers Act (“IEEPA”). During 2025 and the first quarter of 2026, we paid approximately $19.8 million in IEEPA tariffs. In February 2026, the U.S. Supreme Court invalidated IEEPA tariffs, and in April 2026, U.S. Customs and Border Protection (“CBP”) commenced a phased process for accepting refund claims. Accordingly, in April, we submitted refund claims for our Phase 1 entries totaling $18.6 million, substantially all of which were approved during the second quarter. As a result, during the quarter we recognized: $15.3 million in tariff refunds as a reduction to cost of sales ($14.3 million in the Wholesale segment and $1.0 million in the Retail segment), $3.3 million as a reduction of inventory, and $0.7 million of interest income.
Our remaining entries, totaling $1.2 million (now classified as Phase 3 entries), have not yet been assigned a claim submission timeline. No refunds related to our Phase 3 entries have been recognized, as the timing and amount of these recoveries remain uncertain and subject to execution by CBP.
In February 2025, the U.S. imposed reciprocal and retaliatory tariffs on certain imported goods under the International Emergency Economic Powers Act (“IEEPA”). We paid a total of approximately $19.8 million in IEEPA tariffs in 2025 and the first quarter of 2026. The IEEPA tariffs increased the cost of our products by 19% to 50%, resulting in gross margin compression.
On February 20, 2026, the U.S. Supreme Court ruled that IEEPA does not authorize the President to impose tariffs, declaring the IEEPA tariffs invalid. In April 2026, U.S. Customs and Border Protection (“CBP”) commenced a phased process to accept claims for potential refunds of IEEPA tariffs previously paid. The refund process formally opened on April 20, 2026, and on that date, we submitted claims covering our Phase 1 entries totaling $18.6 million. The timing for submitting claims related to our Phase 2 entries, totaling $1.2 million, has not yet been established. The timing and amount of any recoveries remain uncertain and subject to execution by CBP.
Following the U.S. Supreme Court's ruling,ruling in February, the PresidentAdministration announced the implementation ofimposed a new10% across-the-boardincremental tariff under a separate statutory authority, currentlywhich setremained atin 10%,effect althoughthroughout the scopesecond quarter. On July 24, 2026, the Administration increased the incremental tariff on imports from China, Dominican Republic, and rate remain subjectVietnam to change.12.5%. U.S. trade policies continue to evolve and remain unpredictable, creating near-termnear term gross margin uncertainty. We have mitigation strategies in place and will continue to adjust, as appropriate, in response to future policy developments.
We are pleased with the growth of our wholesale business in the second quarter. While the categories in which we compete remain under pressure, we delivered growth in three of our four major brands, resulting in a 7% increase in wholesale sales. It remains a challenging environment for discretionary consumer goods, including footwear, and we believe our company is executing well despite these market conditions.
Sales of our combined legacy business, comprised of the Florsheim, Stacy Adams, and Nunn Bush brands, increased 6% in the second quarter.
Florsheim’s sales increased 12%, driven by strong sales of traditional dress shoes and growth in both hybrid and casual footwear.
Stacy Adams sales increased 4% compared to last year’s second quarter. The Stacy Adams dress shoe business continues to generate strong retail sell-through, and our focus is on translating that success into increased demand for our casual lifestyle products.
Nunn Bush sales declined 3% for the quarter. As an opening-price brand, Nunn Bush competes in a highly competitive segment of the market against private-label offerings and lower-priced licensed brands. Our strategy is to differentiate the brand by investing in comfort technology and higher-quality materials. We believe we are well positioned with strong products currently at retail and in the pipeline that distinguishes the brand on quality.
BOGS sales increased 10% for the quarter, and the brand is well positioned for a strong second half. In a market with many rubber boot options, BOGS' Seamless construction provides a meaningful point of differentiation. It is lighter and more durable than the traditional vulcanized construction used by many competing brands. We are continuing to educate both retailers and consumers about the advantages of Seamless construction, and we are seeing solid growth across this product line. While we believe we are still in the early stages of a BOGS turnaround, we are encouraged by the brand's performance this quarter.
Our retail segment increased 4% for the quarter, driven by strong Florsheim e-commerce sales. We continue to invest in our direct-to-consumer platform and are encouraged by our growth in the U.S. market so far this year.
Florsheim Australia's net sales increased 10% for the quarter but declined 1% in local currency, reflecting the favorable impact of foreign exchange. Despite a challenging economic environment, our Florsheim Australia team continues to execute well by maximizing sales opportunities in a difficult retail market while maintaining disciplined expense control.
Our overall company sales were flat for the first quarter, with Wholesale segment sales down 1% compared to the first quarter of last year. Given the uncertainty in the economic environment, we believe we are holding our position within our competitive market segments, with Florsheim continuing its strong performance streak.
Our legacy brands, which include Florsheim, Nunn Bush, and Stacy Adams, were collectively flat for the quarter, compared to the first quarter of 2025. The Florsheim brand was up 5%, driven by strong sales in the traditional dress category. While the overall dress footwear market has been trending downward over time, Florsheim has continued to gain market share.
Nunn Bush net sales were flat compared to the first quarter of 2025. We believe the brand is well-positioned as a leading value option in comfort casual and comfort dress footwear in an economy where many consumers are feeling stretched to cover day-to-day expenses.
Our Stacy Adams brand was down 9% compared to the same period last year. At retail, Stacy Adams sell-throughs have been solid; however, we believe retailers are not investing in fashion-dress shoes as they have in the past. This is especially true in department stores and family footwear channels. We are focused on diversifying the Stacy Adams product assortment to be less centered on dress shoes, with more casual offerings that align with today’s lifestyle.
Our BOGS brand was down 11% compared to the same period last year. We anticipate a strong second half of the year, as cold weather and precipitation last winter in the Midwest and East Coast helped clear excess inventory of weather boots. We are also encouraged by the launch of new, less insulated Spring footwear, which is selling well and paving the way for more year-round BOGS business.
Net sales in our retail segment were up 2% compared to the first quarter of 2025, led by strong Florsheim e-commerce sales. In the first quarter of 2025, we were still working through excess inventory across various areas of our branded portfolio. This year, we had less closeout inventory to sell through our websites, resulting in higher web margins as we sold more full-price footwear. We continue to invest in our e-commerce platform to better showcase our brands and drive long-term growth in direct-to-consumer sales.
Florsheim Australia’s net sales were up 10% compared to the first quarter of 2025, but flat in local currency. Consumers in these markets, including: Australia, New Zealand, South Africa, and other Pacific Rim countries, are facing many of the same pressures as in North America. As a result, sales remain somewhat soft. We are focused on keeping expenses in line as we work to return to a growth trajectory.
FirstSecond Quarter Highlights
Consolidated net sales were $68.0$62.2 million, flatup 7% compared to net sales in the firstsecond quarter of 2025. Consolidated gross earnings were 44.2%70.4% of net sales compared to 44.6%43.3% of net sales in last year’s firstsecond quarter.quarter, mainly impacted by tariff refunds. Earnings from operations totaled $7.5$17.0 million for the quarter, up 7% from $7.0$3.9 million last year. FirstSecond quarter net earnings were $6.1$13.3 million, or $0.64$1.39 per diluted share, in 2026, compared to $5.5$2.3 million, or $0.57$0.24 per diluted share, in 2025.
Year-To-Date Highlights
Consolidated net sales for the first half of 2026 were $130.2 million, up 3% from $126.3 million in 2025. Consolidated gross earnings were 56.7% of net sales in the first six months of 2026 versus 44.0% of net sales in the same period one year ago, mainly impacted by tariff refunds. Year-to-date earnings from operations totaled $24.5 million, up from $10.9 million in 2025, mainly impacted by tariff refunds. Net earnings were $19.4 million, or $2.04 per diluted share, in the first six months of 2026, up from $7.8 million, or $0.81 per diluted share, last year.
At MarchJune 31,30, 2026, our cash and marketable securities totaled $93.9$98.1 million, and we had no debt outstanding on our $40.0 million revolving line of credit. During the first threesix months of 2026, we generated $17.4$25.2 million ofin cash from operations and used funds to pay $23.9$26.6 million in dividends. We also madehad $0.6$1.5 million inof capital expenditures during the period.expenditures.
Consolidated net sales remained flat for the quarter, as a 1% decline in Wholesale sales was offset by higher sales in the Retail segment and at Florsheim Australia.
Consolidated gross earnings as a percent of net sales were 44.2% and 44.6% in the first quarters of 2026 and 2025, respectively. The decrease in 2026 was primarily due to higher costs resulting from incremental tariffs, partially offset by selling price increases instituted in the second half of last year. 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 $4.5 million and $5.0 million in the first quarters of 2026 and 2025, respectively.
Consolidated selling and administrative expenses as a percentage of net sales were 33% and 34% in the first quarters of 2026 and 2025, respectively, with expenses down mainly in our Wholesale segment.
Consolidated earnings from operations for the three months ended March 31, 2026, were up 7% compared to the same period one year ago. The increase in 2026 mainly resulted from lower Wholesale selling and administrative expenses.
Interest income for the first quarter increased $0.1 million due mainly to higher cash balances in 2026. Other income (expense), net, primarily includes the non-service cost components of pension (benefit) expense and net gains and losses on foreign currency transactions. The income/expense category improved in the first quarter of 2026, due to decreased pension expense and gains on favorable foreign exchange contracts.
Our effective tax rates for the three months ended March 31, 2026 and 2025 were 26.6% and 26.5%, respectively. See Note 9 to the Consolidated Financial Statements for additional information on income taxes.
Consolidated net earningssales for the threesecond monthsquarter endedand Marchfirst 31,half 2026,of 2026 were up 10%7% and 3%, respectively, compared to the same periodperiods onelast year ago.year. The increaseincreases were mainly resulteddue fromto lowerhigher selling and administrative expensessales in our Wholesale segment this year.segment.
Consolidated gross earnings as a percent of net sales were 70.4% and 43.3% in the second quarters of 2026 and 2025, respectively. For the year-to-date period, consolidated gross earnings were 56.7% in 2026 and 44.0% in 2025. The increases in 2026 were primarily due to tariff refunds recognized in the second quarter. 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 $4.6 million and $4.3 million in the second quarters of 2026 and 2025, respectively. For the six months ended June 30, consolidated distribution costs were $9.1 million in 2026 and $9.3 million in 2025.
Consolidated selling and administrative expenses as a percent of net sales were 43% and 37% in the second quarters of 2026 and 2025, respectively. For the first six months of 2026, selling and administrative expenses totaled 38% of net sales compared to 35% of net sales in the same period of 2025. This year’s percentage increases were mainly due to higher employee costs in our Wholesale segment.
Consolidated earnings from operations for the three and six months ended June 30, 2026, increased $13.1 million and $13.6 million, respectively, compared to the same period one year ago, with the increases mainly driven by the tariff refunds recognized in the second quarter.
Interest income for the second quarter and year-to-date periods increased $0.7 million and $0.8 million, respectively, due mainly to interest income on tariff refunds recognized in the second quarter.
Other income (expense), net, primarily includes the non-service cost components of pension (benefit) expense and net gains and losses on foreign currency transactions. The income/expense category improved in the second quarter due mainly to lower pension expense. For the year-to-date period, the category improved due to decreased pension expense and gains on favorable foreign exchange contracts.
Our effective tax rates for the three months ended June 30, 2026 and 2025 were 28.4% and 51.1%, respectively. For the six months ended June 30, our effective tax rates were 27.8% in 2026 and 35.8% in 2025. The higher effective tax rates in 2025 were primarily due to the establishment of a $1.1 million valuation allowance against deferred tax assets at Florsheim Australia. See Note 10 to the Condensed Consolidated Financial Statements for additional information on income taxes.
Consolidated net earnings for the three months ended June 30, 2026, were $13.3 million, up $11.1 million compared to the same period one year ago. For the six months ended June 30, net earnings totaled $19.4 million in 2026, up from $7.8 million in 2025. The increases compared to last year were mainly a result of the tariff refunds.
Net sales and earnings from operations for our reportable segments and the “other” category for the three and six months ended MarchJune 31,30, 2026 and 2025, were as follows:
Net sales in our Wholesale segment for the three and six months ended MarchJune 31,30, 2026 and 2025, were as follows:
Wholesale net sales were $48.8 million for the quarter, up 7% from $45.6 million in the second quarter of 2025. Sales of our Florsheim brand were up 12%, due to its continued growth in the dress shoe category. BOGS sales were up 10% for the quarter, driven by increased sales volumes across most major channels. Sales of our Stacy Adams brand increased 4% for the quarter, primarily due to favorable pricing. Nunn Bush sales were down 3% for the quarter. For the six months ended June 30, 2026, Wholesale net sales were up 2% compared to the first six months of 2025. The increases were due to higher sales of the Florsheim brand, offset by decreases in sales of Stacy Adams, Nunn Bush and BOGS branded products, primarily a result of lower first quarter demand. Licensing revenues for the three and six months ended June 30, 2026 were up $0.4 million and $0.3 million, respectively. Last year’s licensing revenues were down due to decreased sales of licensed products.
Wholesale net sales were $53.6 million for the quarter, down 1% from $54.3 million in the first quarter of 2025. Florsheim’s first quarter sales were up 5%, due to continued success in the dress shoe category. Florsheim’s increase was more than offset by lower sales of the Stacy Adams and BOGS brands, down 9% and 11%, respectively, due to lower retailer demand. Nunn Bush sales remained flat for the quarter.
Wholesale gross earnings as a percent of net sales were 38.7%70.0% and 39.4%37.6% in the firstsecond quarters of 2026 and 2025, respectively. Gross margins forFor the quarteryear-to-date continuedperiod, gross earnings as a percent of net sales were 53.6% in 2026 and 38.6% in 2025. The increases were primarily due to bethe negativelyrecognition impactedof by$14.3 incrementalmillion tariffs,in partiallytariff offsetrefunds, byas well as the benefit of selling price increases institutedimplemented in the second half of last year.2025. Wholesale selling and administrative expenses totaled $13.8$18.1 million, or 26%37% of net sales, for the quarter versus $14.8$13.1 million, or 27%29% of net sales, last year. For the year-to-date period, Wholesale selling and administrative expenses totaled $31.9 million, or 31% of net sales, versus $27.9 million, or 28% of net sales, last year. The decreasesincreases in 2026 selling and administrative expenses were largelyprimarily due to lowerhigher employee costs.costs incurred in the second quarter.
Wholesale operating earnings for the second quarter and first half of 2026 increased $12.0 million and $12.3 million, respectively, over the prior year comparative periods, due mainly to tariff refunds partially offset by higher employee costs.
Wholesale operating earnings totaled $7.0 million for the quarter, up 5% from $6.6 million in 2025, mainly due to lower selling and administrative expenses.
Net sales in our retailRetail segment, which were generated mainly throughby our e-commerce websites, totaledwere $8.8$7.0 million for the quarter, up 2%4% from $8.7 million in 2025. The increase resultedwas fromdriven mainly by higher sales ofon ourthe e-commerceFlorsheim businesses,website. For the six months ended June 30, Retail net sales were $15.8 million, up 3% from 2025. The year-to-date sales increase was mainly drivendue to higher sales on the Florsheim website, partially offset by ourlower Florsheimsales brand.on BOGS and Nunn Bush websites.
Retail gross earnings were 79.2% of net sales for the quarter and 66.6% in last year’s second quarter. For the six months ended June 30, retail gross earnings were 71.9% and 66.6% in 2026 and 2025, respectively. The margin improvements were driven by tariff refunds, which decreased Retail cost of sales by $1.0 million in the second quarter.
Retail gross earnings were 66.1% of net sales for the quarter and 66.6% in last year’s first quarter.
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 $5.1$4.6 million and $4.4 million in the firstsecond quarterquarters of 2026,2026 downand 2%2025, fromrespectively. $5.2For the six months ended June 30, Retail selling and administrative expenses were flat at $9.6 million in lastboth year’s2026 firstand quarter.2025. As a percentagepercent of net sales, retail selling and administrative expenses were 57%65% and 60%66% in the firstsecond quarters of 2026 and 2025, respectively, and were 61% and 62% in the first half of 2026 and 2025, respectively.
Retail operating earnings improvedincreased to $0.8$0.9 million for the quarter, compared to $0.6the last year’s second quarter. For the six months ended June 30, Retail operating earnings increased $1.1 million in last2026, year’scompared firstto quarter,the same period of 2025. The increases for both the quarter and year-to-date periods were due to increasedthe nettariff sales and lower selling and administrative costs.refunds.
Net sales of Florsheim Australia were $5.6 million infor the firstsecond quarter of 2026,2026 upincreased 10%$0.6 frommillion, $5.1or million10%, inover 2025.last year’s second quarter. For the year-to-date period, its net sales increased $1.1 million, or 10%, compared to the same period one year ago. The increaseincreases waswere due to the appreciation of the Australian dollar relative to the U.S. dollar, as Florsheim Australia’s net sales in local currency were flatdown 1% for theboth quarter.periods.
Florsheim Australia’s gross earnings as a percent of net sales were 63.1% and 60.9% in the second quarters of 2026 and 2025, respectively, and its quarterly operating losses were break-even in 2026 compared to losses of $0.2 million in 2025. For the six months ended June 30, 2026 and 2025, Florsheim Australia’s gross earnings as a percent of net sales were 63.0% and 61.7%, respectively, and its six-month operating losses were $0.2 million in 2026 compared to $0.5 million in 2025. The year-to-date operating losses were down due to improved performance in Florsheim Australia’s wholesale businesses.
Florsheim Australia’s gross earnings as a percent of net sales were 62.9% and 62.7% in the first quarters of 2026 and 2025, respectively, and its quarterly operating losses totaled $0.2 million in both periods.
Interest income totaled $0.7$1.5 million in the firstsecond quarter of 2026 andcompared $0.6to $0.8 million in last year’s firstsecond quarter. TheFor increasethe six months ended June 30, interest income was $2.2 million in 2026 wasand $1.4 million in 2025. The increases were due primarily to more$0.7 million of interest earnedincome on highertariff cashrefunds balancesrecognized thisin year.the second quarter.
Other income (expense), net, primarily consisted ofincludes the non-service cost components of pension (benefit) expense and net gains and losses on foreign currency transactions. In the first quarter of 2026, otherThe income (expense), net, totaled income of $0.2 million compared to /expense ofcategory $0.1 millionimproved in the firstsecond quarter ofdue 2025.mainly Theto improvementlower inpension 2026expense. wasFor the year-to-date period, the category improved due to decreased pension expense and gains on favorable foreign exchange contracts entered into by Florsheim Australia.contracts.
Our effective tax rates for the three months ended June 30, 2026 and 2025 were 28.4% and 51.1%, respectively. For the six months ended June 30, our effective tax rates were 27.8% in 2026 and 35.8% in 2025. The higher effective tax rates in 2025 were primarily due to the establishment of a $1.1 million valuation allowance against Florsheim Australia’s deferred tax assets. See Note 10 to the Condensed Consolidated Financial Statements for additional information on income taxes.
WEYS insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 11 filings (7 insiders, 10 trade dates, 14,986 shares, about $653.8K). Net open-market shares: -14,986 (purchases minus sales); net value about -$653.8K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-10-02 | Florsheim John W |
Option exercise | 10,000 | $24.00 | $240.0K |
| 2026-10-02 | Florsheim John W |
Option exercise | 5,600 | $25.79 | $144.4K |
| 2026-10-02 | Florsheim John W |
Option exercise | 4,200 | $25.79 | $108.3K |
| 2026-10-02 | Florsheim John W |
Shares withheld for tax | 14,205 | $50.21 | $713.2K |
| 2026-10-02 | Florsheim Thomas W Jr |
Option exercise | 10,000 | $24.00 | $240.0K |
| 2026-10-02 | Florsheim Thomas W Jr |
Option exercise | 5,600 | $28.83 | $161.4K |
| 2026-10-02 | Florsheim Thomas W Jr |
Option exercise | 4,200 | $25.79 | $108.3K |
| 2026-10-02 | Florsheim Thomas W Jr |
Shares withheld for tax | 14,205 | $50.21 | $713.2K |
| 2026-09-25 | Destinon Katherine |
Option exercise | 780 | $28.83 | $22.5K |
| 2026-09-25 | Destinon Katherine |
Option exercise | 1,201 | $24.00 | $28.8K |
| 2026-09-25 | Destinon Katherine |
Option exercise | 785 | $25.79 | $20.2K |
| 2026-09-25 | Destinon Katherine |
Shares withheld for tax | 1,586 | $47.42 | $75.2K |
| 2026-09-14 | Anderson Judy |
Open-market sale | 1,555 | $44.00 | $68.4K |
| 2026-09-11 | Combs Dustin |
Open-market sale | 308 | $44.36 | $13.7K |
| 2026-09-10 | Combs Dustin |
Open-market sale | 290 | $44.17 | $12.8K |
| 2026-09-02 | Chang Tina M |
Open-market sale | 3,000 | $45.07 | $135.2K |
| 2026-08-27 | Combs Dustin |
Open-market sale | 1,096 | $44.64 | $48.9K |
| 2026-08-26 | Florsheim Thomas W |
Voting trust | 310 | — | — |
| 2026-08-26 | Florsheim Thomas W |
Voting trust | 310 | — | — |
| 2026-08-26 | Stratton Frederick P Jr |
Voting trust | 310 | — | — |
| 2026-08-26 | Stratton Frederick P Jr |
Voting trust | 310 | — | — |
| 2026-08-25 | Florsheim John W |
Shares withheld for tax | 801 | $45.58 | $36.5K |
| 2026-08-25 | Florsheim John W |
Grant/award | 2,080 | — | — |
| 2026-08-25 | Florsheim Thomas W Jr |
Shares withheld for tax | 846 | $45.58 | $38.6K |
| 2026-08-25 | Florsheim Thomas W Jr |
Grant/award | 2,080 | — | — |
| 2026-08-25 | Liebl Stephanie Lynn |
Shares withheld for tax | 216 | $45.58 | $9.8K |
| 2026-08-25 | Liebl Stephanie Lynn |
Grant/award | 690 | — | — |
| 2026-08-25 | Douglass Jeffrey S |
Shares withheld for tax | 438 | $45.58 | $20.0K |
| 2026-08-25 | Douglass Jeffrey S |
Grant/award | 1,360 | — | — |
| 2026-08-25 | Woss Allison |
Grant/award | 1,360 | — | — |
| 2026-08-25 | Woss Allison |
Shares withheld for tax | 404 | $45.58 | $18.4K |
| 2026-08-25 | Sotiros George |
Grant/award | 1,360 | — | — |
| 2026-08-25 | Sotiros George |
Shares withheld for tax | 406 | $45.58 | $18.5K |
| 2026-08-25 | Schiff Kevin |
Grant/award | 1,360 | — | — |
| 2026-08-25 | Schiff Kevin |
Shares withheld for tax | 402 | $45.58 | $18.3K |
| 2026-08-25 | Combs Dustin |
Shares withheld for tax | 431 | $45.58 | $19.6K |
| 2026-08-25 | Combs Dustin |
Shares withheld for tax | 1,665 | $44.82 | $74.6K |
| 2026-08-25 | Combs Dustin |
Option exercise | 780 | $25.79 | $20.1K |
| 2026-08-25 | Combs Dustin |
Option exercise | 780 | $28.83 | $22.5K |
| 2026-08-25 | Combs Dustin |
Option exercise | 1,201 | $24.00 | $28.8K |
| 2026-08-25 | Combs Dustin |
Grant/award | 1,360 | — | — |
| 2026-08-25 | Destinon Katherine |
Shares withheld for tax | 439 | $45.58 | $20.0K |
| 2026-08-25 | Destinon Katherine |
Grant/award | 1,360 | — | — |
| 2026-08-25 | Flannery Brian |
Grant/award | 1,360 | — | — |
| 2026-08-25 | Flannery Brian |
Shares withheld for tax | 392 | $45.58 | $17.9K |
| 2026-08-25 | Anderson Judy |
Grant/award | 1,360 | — | — |
| 2026-08-25 | Anderson Judy |
Shares withheld for tax | 437 | $45.58 | $19.9K |
| 2026-08-25 | Wisenthal Joshua |
Grant/award | 925 | — | — |
| 2026-08-25 | Walton Damian |
Grant/award | 1,107 | — | — |
| 2026-08-25 | Florsheim Thomas W |
Grant/award | 1,265 | — | — |
| 2026-08-25 | Florsheim Thomas W |
Voting trust | 2,390 | — | — |
| 2026-08-25 | Florsheim Thomas W |
Voting trust | 2,390 | — | — |
| 2026-08-25 | Stratton Frederick P Jr |
Voting trust | 2,390 | — | — |
| 2026-08-25 | Stratton Frederick P Jr |
Voting trust | 2,390 | — | — |
| 2026-08-25 | Stratton Frederick P Jr |
Grant/award | 1,265 | — | — |
| 2026-08-25 | Chang Tina M |
Grant/award | 1,265 | — | — |
| 2026-08-25 | Kryger Becky Jo |
Grant/award | 1,265 | — | — |
| 2026-08-25 | Nettles Cory L |
Grant/award | 1,265 | — | — |
| 2026-08-20 | Douglass Jeffrey S |
Option exercise | 1,200 | $37.22 | $44.7K |
| 2026-08-20 | Douglass Jeffrey S |
Shares withheld for tax | 1,609 | $45.80 | $73.7K |
Well-known investors holding WEYS (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 20,080 | $789.7K | 0.0% | Added 98% |
| Renaissance Technologies | 2026-06-30 | 19,526 | $768.0K | 0.0% | Reduced 14% |