Tariff Costs Erode Weyco Gross Margin as Q4 Sales Decline 5%
Q4 2025 earnings per share fell to $0.91 from $1.04 year-on-year, with net sales declining 5% to $76.8 million and gross margin compressing to 44.1% from 47.9%. Tariff-related costs of about $16 million eroded margins despite July price hikes, while North American wholesale sales slid 6% to $56.7 million.
1. Q4 2025 Financial Results
Weyco Group reported Q4 2025 earnings per share of $0.91, down from $1.04 a year earlier, and net sales of $76.8 million, a 5% decrease from $80.5 million. Operating earnings fell 12% to $10.2 million as gross margin compressed to 44.1% of sales, compared with 47.9% in the prior-year quarter.
2. Segment Performance Details
North American wholesale net sales declined 6% to $56.7 million, driven by lower shipping volumes and brand-level sales drops of 13% at Nunn Bush and Stacy Adams, 6% at BOGS and 1% at Florsheim. The retail segment saw a 5% sales decrease to $13.3 million and operating earnings fell to $1.9 million, while international operations grew 12% to $6.8 million but recorded a $0.1 million operating loss.
3. Tariff Impact and Legal Uncertainty
Incremental tariffs increased product costs by roughly 19% to 50%, resulting in approximately $16 million in additional tariff expenses during 2025. A Supreme Court ruling invalidated the statutory basis for these duties, but potential refunds remain under review by the Court of International Trade, creating uncertainty over recoupments.
4. Dividend Declaration and Outlook
The board declared a quarterly cash dividend of $0.27 per share, payable March 31, 2026, to shareholders of record on March 13. Management highlighted conservative retailer inventories, softer consumer demand and noted the Florsheim brand achieved record full-year wholesale sales as a key bright spot despite ongoing margin pressure.