Weyco Group faces margin pressure amid 2025 tariff challenges

US footwear firm Weyco Group reported a decline in net sales and earnings for the fourth quarter and full year ended December 31, 2025, as incremental tariffs and soft consumer demand weighed on performance.

The Milwaukee-based company, which owns brands including Florsheim, Nunn Bush, Stacy Adams, and Bogs, saw fourth quarter (Q4) net sales slip 5 percent to 76.80 million dollars. Net earnings for the period fell 13 percent to 8.70 million dollars, down from 10.00 million dollars in the same quarter of the previous year.

Wholesale performance impacted by retail uncertainty

The North American wholesale segment recorded net sales of 56.70 million dollars for the quarter, a 6 percent decrease compared to 60.40 million dollars in Q4 2024. This decline was attributed to lower shipping volumes, although price increases implemented on July 1, 2025, helped mitigate some of the impact.

Within the wholesale portfolio, Nunn Bush and Stacy Adams both saw sales drop 13 percent during the quarter. Executives pointed to ongoing uncertainty in the retail environment caused by tariffs as a primary driver for reduced volumes across most trade channels. Bogs sales declined 6 percent due to continued softness in the seasonal footwear category, while Florsheim wholesale sales remained relatively stable with a 1% decrease.

Wholesale gross earnings as a percentage of net sales contracted to 37.2 percent from 42.4 percent in the previous year's quarter. The company stated that while price increases were utilized, they did not fully offset the costs of incremental tariffs, leading to margin erosion.

Retail and international operations

Net sales in the North American retail segment, primarily driven by e-commerce, fell 5 percent to 13.30 million dollars in the fourth quarter. The decrease was largely due to an increase in sales reserves related to the direct-to-consumer (D2C) businesses.

The company’s other operations, consisting of Florsheim Australia and South Africa (Florsheim Australia), provided a rare highlight with quarterly net sales rising 12 percent to 6.80 million dollars. In local currency, the Australian business grew 11 percent, supported by gains in both wholesale and retail channels.

Annual results and tariff litigation

For the full year 2025, Weyco Group reported net sales of 276.20 million dollars, a 5 percent decrease from 290.30 million dollars in 2024. Annual net earnings fell 24 percent to 23.10 million dollars, impacted by a higher effective tax rate of 28 percent compared to 23.9 percent in the prior year.

Throughout 2025, incremental tariffs increased product costs by 19 percent to 50 percent. Weyco Group paid approximately 16 million dollars in these tariffs over the year and filed a lawsuit in December 2025 seeking a refund.

Following a US Supreme Court ruling on February 20, 2026, which invalidated the statutory basis for these incremental tariffs, the company faces further uncertainty as the administration announced a new 10 percent across-the-board tariff under different authority.

Executive outlook for 2026

Weyco Group chairman and chief executive officer, Thomas Florsheim, Jr., noted that Florsheim was a "bright spot" with record annual wholesale sales of 92 million dollars. However, Florsheim acknowledged that other brands faced "headwinds stemming from soft consumer demand and retailers' cautious approach to inventory".

"Entering 2026, we are prioritizing financial oversight and operational discipline to reposition our brands and business lines for renewed growth while protecting long-term profitability," Florsheim stated.

The board of directors declared a quarterly cash dividend of 0.27 dollars per share.