Shares of Weyco Group, Inc. (WEYS Quick QuoteWEYS - Free Report) have gained 6.2% since the company reported its earnings for the quarter ended March 31, 2025. This compares to the S&P 500 index’s 0.2% decline over the same time frame. Over the past month, the stock has gained 10.2% compared with the S&P 500’s 4.4% growth, reflecting relative investor optimism toward the company despite macroeconomic pressures.

Weyco reported first-quarter 2025 earnings per share of 57 cents, down from 69 cents in the first quarter of 2024, a decline of approximately 17%. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Net sales of $68 million represented a 5% decrease from $71.6 million in the prior-year period. Net earnings also fell 17% year over year to $5.5 million, and earnings from operations were $7 million, down 15% from $8.3 million in the prior-year quarter.

Segment-Level Performance Pressured by Soft Consumer Demand

The North American Wholesale segment posted sales of $54.3 million, a 4% year-over-year decline. While the Florsheim brand saw a 7% sales increase, driven by new product launches, it was not enough to offset the 7% decline at Stacy Adams, the 16% decline at Nunn Bush, and the 5% drop at BOGS. Wholesale gross margin remained relatively stable at 39.4%, down slightly from 39.6% a year ago, while segment operating earnings declined 10% to $6.6 million due to lower volumes.

In the North American Retail segment — comprised mainly of e-commerce operations — sales fell 12% to $8.7 million from a record $9.8 million last year. The decline was attributed largely to reduced promotional activity on the BOGS website. Despite a modest improvement in gross margin (66.6% vs. 65.3% last year), retail operating earnings plunged 52% to $0.6 million.

Internationally, Florsheim Australia and South Africa reported $5.1 million in sales, down 7% year over year, primarily due to foreign exchange headwinds and the 2024 closure of Asia Pacific operations. On a local currency basis, Australian sales rose 6%, supported by growth in both wholesale and retail channels.

Operating losses from this segment narrowed to $0.2 million from $0.4 million in the prior-year period.

Management Commentary Highlights Cautious Outlook

Chairman and CEO Thomas Florsheim acknowledged the challenging start to the year, citing heightened geopolitical risks, evolving U.S. tariff policies, and broader macroeconomic uncertainty. Despite the headwinds, he emphasized the company’s proactive measures, including front-loading inventory before new tariffs took effect and negotiating cost reductions with Chinese suppliers.

Tariff Increases Pose Substantial Future Risk

A major concern looming over future quarters is the imposition of significantly higher tariffs on goods sourced from China, where Weyco obtains a majority of its products. The effective tariff rate has surged from 16% in 2024 to 161% in 2025. Although these new tariffs did not affect first-quarter results, management acknowledged that they will materially increase the company’s cost of goods sold going forward. To mitigate this, Weyco plans to raise prices beginning in summer 2025 and accelerate sourcing diversification efforts.

Other Developments

On May 6, 2025, Weyco’s board of directors approved a 4% increase in the regular quarterly dividend, raising it to 27 cents per share. The dividend is payable on June 30, 2025, to shareholders of record as of May 16, 2025.