Weyco Group (NASDAQ:WEYS) reported fourth quarter and full year 2025 results marked by lower sales and profitability, as the company navigated volatile U.S. tariff policy, pressure on consumer demand, and shifting promotional dynamics in its direct-to-consumer channel.
Fourth quarter results: sales down 5% and margins compressed
For the fourth quarter of 2025, Weyco reported consolidated net sales of $76.8 million, down 5% from $80.5 million in the prior-year quarter. Consolidated gross earnings were 44.1% of net sales, compared with 47.9% a year earlier, reflecting margin pressure tied largely to incremental tariffs.
Segment performance: wholesale pressured by tariffs; retail affected by reserves
North American wholesale net sales were $56.7 million, down 6% from $60.4 million. Management attributed the decline primarily to lower shipping volumes, partially offset by a July 1, 2025 price increase. Wholesale gross earnings fell to 37.2% of net sales from 42.4% last year, with the company citing incremental tariffs as the key driver. While price increases helped mitigate tariff impacts, Weyco said they did not fully offset higher costs.
Wholesale selling and administrative expenses were $12.7 million, or 23% of net sales, compared with $16.7 million, or 28% of net sales, in the prior year quarter. The company attributed the decline largely to lower employee costs. Wholesale operating earnings were $8.4 million, down 6% from $8.9 million.
North American retail net sales were $13.3 million, down 5% from $14.1 million. Weyco said the quarter was negatively impacted by an increase in sales reserves related to its e-commerce businesses. Retail gross earnings were 64.3% of net sales versus 65.0% a year earlier, and retail operating earnings were $1.9 million compared with $2.5 million in the fourth quarter of 2024, with the decline primarily due to the sales reserve adjustment.
Florsheim Australia (Australia and South Africa operations) posted net sales of $6.8 million, up 12% from $6.0 million; in local currency, sales rose 11%, driven by growth in both wholesale and retail. Gross earnings were 61.5% of net sales versus 62.5% in the prior-year quarter. The unit posted an operating loss of $0.1 million, compared with operating earnings of $0.1 million a year ago.
Tariffs and trade policy: refund lawsuit and continued uncertainty
Management devoted significant time to discussing tariff developments. Weyco said incremental tariffs imposed during 2025 increased product costs by 19% to 50%, compressing gross margins. The company said it paid approximately $16 million of incremental tariffs in 2025 and filed a lawsuit in December 2025 seeking a refund for tariffs imposed pursuant to the International Emergency Economic Powers Act (IEEPA).
On Feb. 20, 2026, Weyco noted that the U.S. Supreme Court ruled IEEPA does not authorize the President to impose tariffs, invalidating the statutory basis for incremental tariffs enacted since February 2025. The matter was remanded to the U.S. Court of International Trade for further proceedings, including implementation and potential refunds. During Q&A, management said it is seeking a refund for all IEEPA tariffs paid and expressed optimism about recovering the full amount, while acknowledging litigation could take time.
Weyco also said the President announced a separate 10% across-the-board tariff under a different statutory authority following the Supreme Court decision, and that certain other tariffs remain in effect. The company characterized U.S. trade policy as “fluid and unpredictable,” creating near-term gross margin uncertainty, and said it has mitigation strategies and will adjust as needed.
Full year results: sales down 5%, operating income down 20%
For full year 2025, Weyco reported consolidated net sales of $276.0 million, down 5% from $290.0 million in 2024. Consolidated gross earnings were 43.2% of net sales compared with 45.3% in 2024. Operating earnings were $29.2 million, down 20% from $36.6 million, and net earnings were $23.1 million, down 24% from $30.3 million.
The company reported diluted earnings per share of $20.41 for 2025, compared with $3.16 in 2024, as stated on the call.
By segment for the year:
- North American wholesale net sales were $217.0 million, down 5% from $228.0 million. Wholesale gross earnings were 37.5% of sales versus 40.2% in 2024, with tariff impacts cited as the primary driver.
- North American retail net sales were $35.7 million, down 8% from a record $38.7 million, driven primarily by lower direct-to-consumer sales of Florsheim, Bogs, and Stacy Adams. Retail gross earnings were 65.7% versus 65.9%, and retail operating earnings were $3.3 million versus $5.3 million, primarily due to lower volume.
- Florsheim Australia net sales were $23.7 million versus $23.6 million; in local currency, sales rose 2% driven by retail growth. The unit posted operating losses of $0.7 million compared with $0.2 million in 2024.
Brand and operational commentary: record Florsheim wholesale sales, sourcing diversification
Chairman and CEO Tom Florsheim Jr. said consolidated sales declined 5% in both the quarter and the year, but emphasized the company’s efforts to navigate tariffs and “dampened consumer sentiment.” He described a period in the second quarter when tariff levels made trade with China—Weyco’s largest sourcing country—“commercially prohibitive,” creating risk to fall deliveries. He said the company kept production running on key programs and held finished goods overseas, enabling Weyco to deliver “nearly 100%” of fall shipments on time once tariffs were reduced to commercially viable levels.
Management also discussed sourcing diversification. In Q&A, the company said roughly 65% to 70% of cost of goods sold was imported from China in the prior year, and noted progress building a broader manufacturing footprint, including expanded sourcing in Cambodia and Vietnam. The company also referenced a large manufacturing base in India and described how changing tariff levels across countries complicated sourcing decisions.
On brand performance, management said the Florsheim brand achieved record wholesale sales in 2025, totaling $92 million and posting a 2% increase for the year, while Nunn Bush, Stacy Adams, and Bogs declined. The company cited channel pressure in mid-tier retail for Nunn Bush, continued challenges in fashion dress shoes for Stacy Adams, and conservative seasonal inventory strategies for Bogs, while noting strong bookings for fall 2026 for the Bogs business.
In retail and e-commerce, management said the consumer became more value-oriented in 2025. With inventories “extraordinarily clean,” Weyco said it had less clearance product available, which reduced conversion among consumers seeking discounts and contributed to some demand shifting to other sites where promotions may be more frequent.
Weyco ended 2025 with $101 million in cash and marketable securities and no debt outstanding under its $40 million revolving line of credit. The company generated $37.3 million in operating cash flow during 2025, paid $7.7 million in dividends, repurchased $5.3 million of stock, and spent $1.8 million on capital expenditures. It expects 2026 capital expenditures of $1 million to $3 million. The company also said it paid fourth quarter and special cash dividends totaling $21.4 million in January 2026 and declared a first quarter dividend of $0.27 per share payable March 31, 2026.
About Weyco Group (NASDAQ:WEYS)
Weyco Group, Inc is a publicly traded footwear company (NASDAQ: WEYS) based in Glendale, Wisconsin, that designs, sources, markets and distributes branded footwear products. The company operates through a portfolio of five consumer brands—Florsheim, Stacy Adams, Nunn Bush, BOGS and Rafters—offering a full range of dress, casual and performance footwear for men and women.
The Florsheim brand, with roots dating back to 1892, provides classic and contemporary men’s dress shoe styles, while Stacy Adams and Nunn Bush deliver fashion-forward and casual offerings.
