Weyco Group Q4 Sales Drop 5% as Tariffs Cut Margins 200bps
Weyco Group generated $37.3 million cash from operations in 2025 with $101 million in cash and securities, no credit-line debt and inventory down to $65.9 million from $74 million. Q4 net sales fell 5% year-over-year, gross margins dropped 200 bps on $16 million of tariffs, and the company diversified sourcing to Cambodia and Vietnam.
1. Financial Position
Weyco Group closed 2025 with $37.3 million in cash from operations, a cash and marketable securities balance of $101 million and zero debt on its revolving credit line. Inventory decreased to $65.9 million from $74 million a year earlier, strengthening the balance sheet heading into 2026.
2. Sales and Margins
Fourth-quarter net sales declined 5% compared to Q4 2024, driven by weaker direct-to-consumer activity and lower promotional volume. Gross margins contracted by 200 basis points under pressure from $16 million in incremental tariffs, partly offset by a 10% price increase, and net earnings fell 13% in the period.
3. Manufacturing Diversification
The company reduced its reliance on China, shifting a significant portion of production to Cambodia and Vietnam to mitigate future tariff risk. Florsheim Australia delivered double-digit local-currency sales growth in Q4, demonstrating the benefits of a broader manufacturing footprint.