Weyco Group Inc. today reported fourth-quarter sales and profit that missed expectations and also announced that it is exploring strategic alternatives for Umi, its children’s footwear brand.
Weyco — which owns Bogs, Florsheim and other footwear labels — said today that its fourth-quarter sales slipped 6 percent year-over-year, to $82.1 million, missing Wall Street’s forecast for sales of $84.5 million.
Profits also tumbled 17 percent to $8.2 million, or 78 cents per diluted share. Adjusted net income, at $6.1 million, or 59 cents per diluted share, fell short of analysts’ bets for diluted earnings per share of 61 cents.
Within the North American wholesale segment, net sales of the Stacy Adams, Nunn Bush and Florsheim brands were down 11 percent, 9 percent and 6 percent, respectively, for the quarter. The company said the sales declines were the result of a challenging retail environment, particularly at brick-and-mortar locations, where foot traffic declined. Bogs’ fourth quarter sales were also down 7 percent, reflecting the ongoing impact of a mild 2015-16 winter season, the company said.
Fourth-quarter net sales of the North American retail segment, which include sales from the company’s Florsheim retail stores and its internet business in the U.S., were flat at $7.4 million.
“It was a tough year for our North American wholesale business,” stated Thomas Florsheim Jr., the company’s chairman and CEO, in a release. “Not only were Bogs’ sales down following last year’s mild winter, but our legacy brands also struggled, echoing the challenges our retail partners are facing, particularly at their brick and mortar locations. While we are disappointed in our results for the year, we are committed to addressing the challenges brought out by this rapidly changing marketplace.”
With sales already lagging at other brands, Weyco said that it evaluated the current state of its Umi business during the quarter and determined that the label no longer “fit the long-term strategic objectives of the company.”
“As a result, the company recorded a $1.8 million impairment charge to write off the majority of the value of the Umi trademark,” Weyco said in a release.
For the full year, Weyco said its net sales were $296.9 million, a decrease of 7 percent compared with the prior year. Meanwhile, profits dropped 10 percent, to $16.5 million, or $1.56 per diluted share.