Weyco continued to suffer from the impact of the Covid-19 pandemic in the opening months of 2021, but the company enjoyed an acceleration in wholesale orders in the latter part of the first quarter and a strong performance in Australia.
Net sales in the first quarter ended March 31 fell to $46.9 million from $63.6 million a year earlier, dragged down by the North American wholesale division, whose revenues dropped to $33.4m from $52.7m. Last year’s first quarter included approximately two-and-a-half months of sales that occurred before the Covid-19 virus struck the U.S. Sales in the first quarter of 2021 continue to be impacted by the effects of the ongoing health crisis, resulting in lower demand for dress and dress-casual footwear. However, sales of the Bogs outdoor brand rose by 32 percent as consumers continue to spend more time outdoors during the pandemic.
The segment’s earnings from operations slipped to $1.4m from $2.8m in the first quarter of 2020.
Net sales of the Northern American retail business grew to $5.6m from $4.8m in last year’s first quarter. Same-store sales were up 32 percent thanks to a 36 percent increase in e-commerce sales, mainly generated by the Bogs brand, which was offset by a 5 percent decline in brick-and-mortar same store sales.
The unit posted operating earnings of $756,000 compared to operating losses of $89,000 a year earlier due to the closing of unprofitable stores and higher earnings from the e-commerce businesses. It had four fewer brick-and-mortar stores operating at March 31 compared with a year earlier.
Net sales from other activities, which include the wholesale and retail sales of Florsheim Australia and Florsheim Europe, were $7.9m compared to $6.1m, lifted by a 39 percent sales increase at Florsheim Australia, which enjoyed growth in both its wholesale and retail businesses. The stronger Australian dollar relative to the U.S. dollar also contributed to the increase, as Florsheim Australia’s net sales in local currency were up 19 percent for the quarter.
Collectively, Florsheim Australia and Florsheim Europe had operating losses totaling $481,000 compared to operating losses of $1.3m in the first quarter of 2020. The reduction in operating losses was due to the improved performance at Florsheim Australia.
Thanks to lower cost of sales, down to $27.6m from $40.4m, and reduced selling and administrative expenses, $17.7m against $21.8m, group earnings from operations rose to $1.6m in the first quarter from $1.3m a year earlier and net earnings were $1.3m compared to $1.2m. Diluted earnings were $0.14 per share versus $0.12 per share in the first quarter of 2020.
The group’s chairman and CEO, Thomas Florsheim Jr., noted that Weyco is “seeing signs of improvement” as orders accelerated in the wholesale business late in the quarter. “At retail, our performance was strong due to the growth in e-commerce, and we are also seeing a resurgence in sales overseas, particularly at Florsheim Australia. We look forward to building on this momentum as we move throughout the year,” he added.