Weyco's Q2 Earnings Soar Y/Y on Florsheim Growth, Tariff Refunds

Net sales of $62.2 million denoted a 7% rise from $58.2 million a year earlier. 

Net earnings increased to $13.3 million from $2.3 million. Earnings from operations rose to $17 million from $3.9 million. Gross earnings totaled $43.8 million compared with $25.2 million a year ago, while gross earnings as a percentage of sales reached 70.4%. The sharp improvement in profitability included a substantial benefit from tariff refunds recognized during the quarter.

Other Key Business Metrics

North American wholesale sales increased 7% to $48.8 million from $45.6 million. Florsheim sales rose 12%, supported by continued growth in dress shoes, while BOGS advanced 10% on higher volumes across most major channels. Stacy Adams sales increased 4%, primarily on favorable pricing, whereas Nunn Bush declined 3%. Wholesale gross margin increased to 70% from 37.6%, while operating earnings rose to $16 million from $4.1 million. However, selling and administrative expenses increased to $18.1 million from $13.1 million, mainly reflecting higher employee costs.

Retail sales rose 4% to $7 million, primarily on higher Florsheim website sales. Retail operating earnings increased to $1 million from $0.1 million. Florsheim Australia reported a 10% increase in reported sales to $6.4 million, although sales declined 1% in local currency, with the difference reflecting appreciation of the Australian dollar. The business broke even operationally compared with a $0.2 million loss a year earlier.

Weyco ended June with $93.7 million in cash and cash equivalents, while inventories declined to $49.1 million from $65.9 million at Dec. 31, 2025. Net cash provided by operating activities during the first six months of 2026 increased to $25.2 million from $14.4 million.

Management Commentary

CEO Thomas Florsheim Jr. said Weyco delivered wholesale growth despite continued pressure on discretionary consumer categories. Management highlighted momentum at Florsheim, where traditional dress shoes remained strong and hybrid and casual footwear showed encouraging growth. It also described BOGS as being in the early stages of a turnaround, supported by growth in its seamless-construction products. For Nunn Bush, management cited intense competition from private-label and lower-priced licensed brands and said it is emphasizing comfort technology and higher-quality materials to differentiate the brand.

Factors Influencing Headline Numbers

Tariff refunds were the biggest contributor to the earnings increase. After the U.S. Supreme Court invalidated tariffs imposed under the International Emergency Economic Powers Act, Weyco submitted $18.6 million of Phase 1 refund claims. The company recognized $15.3 million of refunds as a reduction to cost of sales, including $14.3 million in wholesale and $1 million in retail, along with a $3.3 million inventory reduction and $0.7 million of interest income. Another $1.2 million of potential refunds remains unrecognized because recovery timing and amounts are uncertain.

Interest income also increased to $1.5 million from $0.8 million, partly reflecting the tariff-related interest. Meanwhile, the effective tax rate declined to 28.4% from 51.1%; the prior-year rate included a $1.1 million valuation allowance related to Florsheim Australia.

Outlook

Management said Weyco was positioned for a strong second half and cited a healthy backlog. The company expects inventory to rise to about $70 million by year-end as it builds supply amid tariff uncertainty and prepares to support anticipated customer demand. Management also estimated 2026 capital expenditures of $2 million to $3 million. At the same time, evolving U.S. tariff policies are expected to create near-term gross-margin uncertainty.

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