In the company’s Q4 results announced on Thursday, Weyco said the company is looking for different strategic alternatives for the children’s brand as it does not fit the company’s “long-term strategic objectives.” Weyco recorded a $1.8 million impairment charge to write off the majority of the value of the Umi trademark.
“It was a tough year for our North American wholesale business,” said Thomas W. Florsheim, Jr., Weyco Group Chairman and CEO. “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.”
Net sales for the fourth quarter missed Wall Street’s forecast of $84.5 million. The company reported that net sales for Q4 2016 were $82.1 million, a 6 percent decrease as compared to fourth quarter 2015 net sales of $87.4 million. Diluted earnings per share were $0.78 in the fourth quarter of 2016 as compared to $0.65 in the fourth quarter of 2015.
Net sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, were $61.6 million for the fourth quarter of 2016, down 9 percent as compared to $67.5 million in the fourth quarter of 2015. Within the wholesale segment, net sales of the Stacy Adams, Nunn Bush and Florsheim brands were all down for the quarter.
Weyco attributed the downturn to a “challenging retail environment, particularly at our customers’ brick and mortar locations, where foot traffic has declined due to the growing popularity of online retailing.”
Bogs fourth quarter net sales were down 7 percent, reflecting the continued impact of the mild 2015-2016 winter season, as retailers carried over Bogs inventory into the 2016-2017 winter season.
Full year net sales were $296.9 million in 2016, a decrease of 7 percent as compared to $320.6 million in 2015. Earnings from operations were $21.2 million in 2016, down 29 percent as compared to $29.8 million in 2015.
“While we are disappointed in our results for the year, we are committed to addressing the challenges brought out by this rapidly changing marketplace. We believe we have the right products and long-term strategies in place that will position the Company for sustained growth in the long-term,” said Florsheim in a statement.