Weyco's Q4 Earnings Slid Y/Y as Tariffs and Soft Demand Weigh

Shares of Weyco Group, Inc. WEYS have lost 2.1% since the company reported its earnings for the quarter ended Dec. 31, 2025. This compares to the S&P 500 Index’s -2% change over the same time frame. Over the past month, the stock moved -0.3% compared with the S&P 500’s -3.1% change.

For the fourth quarter of 2025, Weyco reported earnings per share of 91 cents, which decreased from $1.04 in the prior-year quarter. 

Net sales of $76.8 million denoted a 5% decline from $80.5 million in the prior-year period. Net earnings fell 13% year over year to $8.7 million from $10 million, while Earnings from operations totaled $10.2 million, down 12% from $11.5 million in the fourth quarter of 2024.

Gross earnings represented 44.1% of net sales compared with 47.9% a year earlier, reflecting pressure on margins during the quarter.

Weyco Group, Inc. Price, Consensus and EPS Surprise

Weyco Group, Inc. price-consensus-eps-surprise-chart | Weyco Group, Inc. Quote

Segment Performance and Other Business Metrics

Weyco’s North American wholesale segment remained the largest contributor to revenue but posted weaker results during the quarter. Wholesale net sales declined 6% year over year to $56.7 million from $60.4 million, primarily due to lower shipping volumes. Brand-level performance varied: sales of Nunn Bush and Stacy Adams each declined 13%, BOGS sales fell 6%, and Florsheim sales slipped 1%.

Wholesale gross margin declined significantly to 37.2% of net sales from 42.4% a year earlier, reflecting tariff-related cost pressures that were only partially offset by price increases implemented on July 1, 2025. Wholesale selling and administrative expenses totaled $12.7 million, down from $16.7 million in the prior-year quarter, largely due to lower employee costs. Despite the cost reductions, wholesale operating earnings fell 6% to $8.4 million.

The North American retail segment, which is largely driven by e-commerce, also recorded weaker results. Net sales declined 5% year over year to $13.3 million from $14.1 million. Retail operating earnings dropped to $1.9 million from $2.5 million in the prior-year period, primarily due to higher sales reserves tied to the company’s online businesses. Retail gross margin edged slightly lower to 64.3% from 65% in the same quarter last year.

In contrast, Weyco’s international operations—primarily the Florsheim Australia business—posted growth during the quarter. Net sales increased 12% to $6.8 million from $6 million in the prior-year period, with an 11% increase on a local currency basis. The improvement was driven by gains in both wholesale and retail channels. However, the segment recorded a small operating loss of $0.1 million against operating earnings of $0.1 million in the year-ago quarter.

Management Commentary

Management highlighted mixed performance across the company’s brands and markets. CEO Thomas W. Florsheim Jr. described the Florsheim brand as a key bright spot, delivering record wholesale sales for the full year amid continued strength in dress and hybrid footwear categories. However, other brands faced weaker demand due to softer consumer spending and retailers’ cautious inventory management in a volatile retail environment.

Executives also noted that retailers were maintaining conservative inventory levels due to economic uncertainty and shifting consumer trends. While the company implemented price increases during the year, these measures did not fully offset cost pressures and reduced shipping volumes in several product categories.

Factors Influencing the Quarter’s Results

Tariffs played a significant role in shaping Weyco’s financial performance during the quarter and throughout 2025. Incremental U.S. tariffs imposed earlier in the year increased product costs by roughly 19% to 50%, resulting in gross margin compression despite pricing adjustments.

The company disclosed that it paid approximately $16 million in incremental tariffs during 2025. Although a U.S. Supreme Court ruling in February 2026 invalidated the statutory basis for those tariffs under the International Emergency Economic Powers Act, the matter remains under review by the Court of International Trade, leaving uncertainty regarding potential refunds.

2025 Update

For the full year, Weyco reported net sales of $276.2 million, down 5% from $290.3 million in 2024. Net earnings declined 24% to $23.1 million, and earnings per share fell to $2.41 from $3.16 in the previous year. The decline reflected lower demand across several brands, margin pressure from tariffs and higher costs, and a higher effective tax rate of 28% compared with 23.9% in 2024.

Other Developments

During the quarter, Weyco’s board declared a quarterly cash dividend of 27 cents per share, payable March 31, 2026, to shareholders of record on March 13. The company also disclosed ongoing legal action seeking refunds for tariffs paid in 2025 following the Supreme Court ruling that challenged the legal basis for those duties.

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