Weyco Group Inc. (NASDAQ:WEYS) Q3 2019 Earnings Conference Call Transcript

Nov 06, 2019 • 11:00 am ET

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Weyco Group Inc. (NASDAQ:WEYS) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning and welcome to the Third Quarter 2019 Earnings Release Conference Call. My name is Inaya, and I'll be the operator for today's call. [Operator Instructions].

I will now turn the call over to Mr. John Wittkowske, Chief Financial Officer. Mr. Wittkowske you may begin.

Executive
John F. Wittkowske

Thank you. Good morning everyone and welcome to our third quarter conference call. On this call with me today are Tom Florsheim Jr. our Chairman and CEO; John Florsheim our President and COO. Before we begin to discuss the results of the quarter I will read a brief disclaimer. During the course of this call, we may make projections or other forward-looking statements regarding our current expectations concerning future events and the future financial performance of the company. We wish to caution you that such statements are just predictions and that actual events or results may differ materially. We refer you to Weyco Group's most recent Form 10-K as filed with the Securities and Exchange Commission. The 10-K identifies important factors and risks that could cause the company's actual results to differ materially from our projections. Additionally, some comparisons may refer to non-GAAP measures. Our SEC filings may contain additional information about these non-GAAP measures and why we use them. Net sales, for the third quarter of 2019 were $82.5 million up 5% compared to last year's $78.4 million.

Operating earnings were $8.5 million for the quarter up 5% compared with $8 million last year. Net earnings attributable to Weyco Group increased 5% to $6.6 million for the quarter up from $6.3 million. Diluted earnings per share were $0.66 per share this quarter and $0.60 per share last year. In the North American wholesale segment, net sales for the quarter were $67.8 million up 7% compared with $63.2 million in 2018. Licensing revenues were $630000 this quarter and $531000 last year. Wholesale gross earnings increased to 35.9% of net sales up from 34.4% of net sales last year. Operating earnings for the wholesale segment increased 25% and $9.5 million this quarter up from $7.6 million in 2018 due to the higher sales and higher gross margins. Net sales of our North American retail segment which include our retail stores and U.S. e-commerce sales were $5.2 million in the third quarter of 2019 up 4% compared with $4.9 million in 2018. Same-store sales which include U.S. e-commerce sales were up 3% for the quarter due to those increased sales on the company's websites. Retail operating earnings were $365000 this quarter and $428000 last year. While operating earnings from the company's e-commerce business is increased this increase was more than offset by lower operating results at the company's brick-and-mortar locations.

Our other operations which include the wholesale and retail businesses of Florsheim Australia and Florsheim Europe had net sales of $9.5 million in the third quarter down 7% compared with $10.3 million in 2018. The decrease was primarily due to the weaker Australian dollar. As Florsheim Australia's net sales in local currencies were down 3% for the