Glendale-based Weyco Group Inc. said a challenging retail environment drove down sales in 2016, but the company was able to improve its earnings in the fourth quarter.
The designer and marketer of footwear reported revenue of $269.5 million in 2016, a 7.4 percent drop over the previous year. Revenue was down 6.1 percent in just the fourth quarter to $82.1 million
Net income for the year was down 9.6 percent to $16.5 million, driving earnings down from $1.69 to $1.57 per share. However, the fourth quarter saw net income of $8.2 million, a 16.7 percent increase with earnings up from 65 cents to 79 cents per share.
Weyco said its North American wholesale business saw sales decline 9 percent in the fourth quarter to $61.6 million. The company’s Stacy Adams brand led the decline with an 11 percent drop, followed by Nunn Bush, down 9 percent, and Florsheim, down 6 percent. The company blamed a challenging retail environment, particularly at customers’ brick and mortar locations with foot traffic declining as online shopping continues to grow.
“While we are disappointed in our results for the year, we are committed to addressing the challenges brought out by this rapidly changing marketplace,” said Thomas Florsheim Jr., Weyco chairman and chief executive officer. “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.”
The North American retail segment was flat with sales of $7.4 million, although same store sales were down 3 percent. The company’s other operations, including wholesale and retail in Australia and Europe, were up 5 percent to $12.5 million.
Weyco also recorded a $1.8 million impairment charge to write off the majority of the value of its Umi brand after determining it did not fit the company’s long-term plans. Weyco said it is exploring different strategic alternatives for the brand of children’s shoes.
