Weyco Q2 Profit Weakens

Weyco Group Inc. today announced a smaller second-quarter profit in a retail environment it said was still “challenging.”

Net income for the Milwaukee, Wis.-based company was $1.3 million, or 11 cents a share, down from $2.2 million, or 19 cents, in the same period a year ago. Net earnings included a decrease of $800,000 resulting from exchange gains and losses on intercompany loans between the U.S. and Florsheim Australia.

Net sales for the three months ended June 30 were $49 million, down 3 percent from $50 million a year ago.

The group saw revenue fall in virtually all categories. The North American business was down 2 percent as wholesale revenue was $34.8 million, down from $35.4 million in 2009, and licensing revenue fell to $470,000 from $552,000.

Retail revenue from the company’s 35 Florsheim retail stores in the U.S. and its Internet business totaled $5.3 million for the quarter, down slightly from $5.4 million in the previous corresponding period. Same-store sales also slipped 1 percent.

The company’s other revenue, which includes wholesale and retail sales in Europe, Australia, Asia and South Africa, also fell. It was $8.1 million in the quarter, down from $8.7 million.

“After an initial uptick in demand in the first quarter, consumers have once again returned to a more cautious approach to discretionary spending,” Tom Florsheim Jr., Weyco’s chairman and CEO, said in a company statement. “In addition, retailers continue to closely monitor their inventory levels. We are looking forward to the fall, when we have a number of different product launches being delivered.”

Weyco’s operating margin also fell, to 35 percent for the quarter, compared with 44 percent in the same period a year ago.

Its cash and cash equivalents at quarter’s end halved to $13.1 million, from $30 million in June 2009.

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