Breaking Down Weyco Group, Inc. (WEYS) Financial Health: Key Insights for Investors

You're looking at Weyco Group, Inc. (WEYS) and wondering if the stock's recent movement is a sign of resilience or just a dead-cat bounce, especially with all the noise around tariffs and consumer spending. Honestly, the Q3 2025 numbers show a classic margin squeeze, but the balance sheet is defintely telling a different story. The company reported net sales of $73.1 million, a 2% dip year-over-year, which translated to net earnings falling 18% to $6.6 million, or $0.69 diluted earnings per share (EPS). Here's the quick math: that consolidated gross margin dropped to 40.7% from 44.3% due almost entirely to those incremental tariffs on China-sourced goods and a pricing dispute with a major wholesale customer. Still, management's confidence is high enough that they declared a chunky special cash dividend of $2.00 per share, a clear signal they have excess capital and a strong financial position, plus brands like Florsheim are still posting an 8% sales increase, showing there are pockets of strength in their portfolio. This isn't a growth story right now, but it might be a value play.

Revenue Analysis

You need to know where Weyco Group, Inc. (WEYS) is making its money, especially when the top-line numbers are shrinking. The direct takeaway is that Weyco's revenue is contracting, with Q3 2025 net sales falling 2% year-over-year to $73.1 million, but the core North American Wholesale segment remains the engine, generating over 80% of total revenue. Still, that engine is sputtering a bit.

Looking at the full picture as of the most recent reporting, the trailing twelve months (TTM) revenue for Weyco Group, Inc. sits at approximately $279.84 million, reflecting a year-over-year decline of 3.64%. This slowdown isn't a surprise, but it does show the pressure from a cautious consumer and strategic pricing moves. Honestly, in a challenging retail environment, a modest decline is defintely a manageable risk, not a catastrophe.

Here's the quick math on the primary revenue sources for the third quarter of 2025, which clearly shows where the company's financial weight is distributed:

• North American Wholesale: This segment is the clear revenue driver, bringing in $60.2 million in Q3 2025.
• North American Retail: This segment, primarily e-commerce, contributed $7.0 million in Q3 2025.
• Other Segments: The remaining revenue, which includes international operations and corporate sales, rounded out the total.

The Wholesale segment is where the action-and the risk-is concentrated, making up about 82.35% of the company's Q3 2025 net sales. The Retail segment, while smaller, is also facing headwinds, with sales decreasing 4% due to softer demand on the Florsheim and Stacy Adams websites. For a deeper dive into the company's overall financial health, you can check out Breaking Down Weyco Group, Inc. (WEYS) Financial Health: Key Insights for Investors.

The segment contribution breakdown for Q3 2025 highlights the reliance on wholesale distribution. This reliance makes the company particularly sensitive to major customer relationships and inventory management across department and specialty stores. Here is the segment breakdown and their Q3 2025 performance:

What this estimate hides is the volatility at the brand level. Florsheim actually posted an 8% sales increase in the Wholesale segment, mainly by using favorable pricing to offset flat volume, showing strength in their dress and hybrid categories. But this gain was completely overshadowed by a significant 17% sales decline in the BOGS brand, which reflects continued softness in the seasonal footwear market.

The biggest change impacting revenue streams isn't just consumer demand, but a strategic pricing conflict. Sales volumes were down 7% in Wholesale, primarily because a large customer canceled orders after failing to adopt Weyco Group, Inc.'s new pricing structure. Plus, the incremental tariffs on China-sourced goods, which were at 30% in Q3 2025, are hitting gross margins hard, even with price increases in place.

Profitability Metrics

You need a clear picture of Weyco Group, Inc. (WEYS)'s core performance, and the Q3 2025 results show a profitable but pressured business. The direct takeaway is that while the company maintains strong gross margins, cost headwinds-specifically new tariffs-are eroding its operating and net profitability, a trend you need to watch closely.

For the third quarter of 2025, Weyco Group, Inc. reported net sales of $73.1 million, but profitability metrics saw a noticeable dip from the prior year. Here's the quick math on the key margins:

• Gross Profit Margin: 40.7% (down from 44.3% in Q3 2024)
• Operating Profit Margin: Approximately 11.1% (Operating Income of $8.1 million on $73.1 million in sales)
• Net Profit Margin: 9.2% (down from 10% in the prior year period)

Margin Trends and Operational Efficiency

The recent trend is one of margin contraction, which is the immediate risk. Net earnings for Q3 2025 fell 18% to $6.6 million compared to the same quarter last year, and earnings from operations dropped 21% to $8.1 million. This reversal comes despite a robust long-term track record, where the company's five-year annual earnings growth averaged a strong 31.5%. The challenge is clear: external pressures are overwhelming internal efficiencies.

The primary culprit for the gross margin erosion is the incremental tariffs, including a 30% tariff on goods sourced from China, where the majority of Weyco Group, Inc.'s products originate. Management did institute selling price increases, but to be fair, they did not fully offset these tariff-related costs. On the operational side, the company showed some cost control, with wholesale selling and administrative expenses decreasing to $14.0 million in Q3 2025, down from $15.1 million in Q3 2024, mostly due to lower employee costs. That's a defintely positive sign of internal cost management.

Industry Comparison: Where WEYS Stands

When you compare Weyco Group, Inc.'s profitability to the broader footwear and retail distribution industry, a nuanced picture emerges. The company's gross margin of 40.7% is competitive, but its operating and net margins are a clear differentiator, showing superior efficiency in converting revenue to profit compared to the average peer.

Here is a snapshot of Q3 2025 and typical industry averages:

While the industry's average gross margin is higher, Weyco Group, Inc.'s net profit margin of 9.2% is more than double the typical industry average of 3.50%. This suggests excellent control over selling, general, and administrative (SG&A) expenses, making their core business model highly efficient. The challenge now is to protect this advantage against the tariff headwinds through accelerated supply chain diversification, a key strategic action the company is already pursuing. You can read more about their long-term strategy here: Mission Statement, Vision, & Core Values of Weyco Group, Inc. (WEYS).

Debt vs. Equity Structure

If you are looking for a highly leveraged, debt-fueled growth story, Weyco Group, Inc. (WEYS) is defintely not it. The company's approach to financing its operations is extremely conservative, relying overwhelmingly on shareholder equity rather than external debt.

As of mid-2025, Weyco Group's balance sheet shows minimal financial leverage. The company's total debt stood at approximately $12.68 million USD as of June 2025. This is a very small figure for a company with its market presence, indicating a strong preference for internal funding.

Here's the quick math on their debt composition as of the second quarter of 2025:

• Short-Term Debt & Capital Lease Obligation: $4.8 million
• Long-Term Debt & Capital Lease Obligation: $7.9 million

This breakdown shows that the debt is nearly split, but the overall quantum is low, which translates into a highly robust balance sheet. Honestly, a company with this much cash and so little debt is a rarity in the footwear and apparel space.

The clearest indicator of this conservative stance is the Debt-to-Equity (D/E) ratio, which measures total debt against total shareholder equity. As of June 2025, Weyco Group's D/E ratio was a remarkably low 0.0511 (or 5.11%).

To put that in perspective, the median D/E ratio for the Manufacturing - Apparel & Accessories industry is around 0.45. Weyco Group's ratio is nearly 90% lower than the industry median, placing it in the top tier of financially secure companies in the sector. They simply don't need to borrow.

The company's financing activities in 2025 confirm this equity-heavy strategy. The Q3 2025 earnings call revealed that Weyco Group had no debt outstanding on its $40 million revolving line of credit as of September 30, 2025. Instead of seeking new debt, the company generated $13.2 million in cash from operations in the first nine months of 2025 and deployed capital back to shareholders.

Their balance between debt and equity is heavily skewed toward equity funding, as demonstrated by their capital allocation decisions for the first nine months of 2025:

What this estimate hides is the opportunity cost of not using more debt (leverage) to potentially boost returns on equity, but for a value investor, this low-risk, high-liquidity profile is gold. They ended Q3 2025 with a substantial cash and marketable securities balance of $78.5 million, which is more than six times their total debt. This is a fortress balance sheet, designed to weather any near-term economic storm. For a deeper dive into the company's full financial picture, check out Breaking Down Weyco Group, Inc. (WEYS) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You need to know if Weyco Group, Inc. (WEYS) can cover its near-term bills, especially when sales are slowing. The short answer is yes, and with significant cushion. The company's liquidity position is defintely a major strength, providing a solid buffer against the current market headwinds like the Q3 2025 sales decline.

We look at the Current Ratio (current assets divided by current liabilities) and the Quick Ratio (a more stringent test that excludes inventory). For Weyco Group, Inc., these figures are exceptionally strong, far exceeding the typical 2.0x benchmark for the Current Ratio. This tells you the company has a massive amount of liquid assets relative to its immediate obligations.

• Current Ratio (MRQ): 9.03x
• Quick Ratio (MRQ): 5.75x

Here's the quick math: a Current Ratio of 9.03x means Weyco Group, Inc. has over nine dollars in current assets for every dollar of current liabilities. Even if you strip out inventory, the Quick Ratio of 5.75x shows they can cover short-term debt over five times with just cash, receivables, and marketable securities. This is a very conservative balance sheet.

Working capital-the capital available for day-to-day operations-is robust. The Trailing Twelve Months (TTM) working capital stands at approximately $169.99 million. While this is typical for a footwear company with significant inventory, the high Quick Ratio confirms that this working capital isn't just tied up in slow-moving stock. This strong position allows management to confidently declare dividends, even a special one, which we saw with the recent $2.00 per share special cash dividend.

The cash flow statement overview for the TTM period ending in 2025 also paints a healthy picture, despite a challenging sales environment. A company's cash flow is the true measure of its financial flexibility.

Operating Cash Flow of $33.68 million is solid, and the Investing Cash Flow of only -$0.622 million shows the business is not capital-intensive, which is a major benefit. Management is guiding 2025 capital expenditures to be low, between only $1 million and $2 million. Plus, the company has Total Cash (MRQ) of $73.66 million and very low Total Debt (MRQ) of $11.49 million, with an entirely undrawn $40 million revolving credit facility.

The only near-term risk is the Q3 2025 net income decline of 18.3% to $6.59 million, driven by margin pressure from tariffs and soft demand. But, the sheer magnitude of their liquidity ratios and cash reserves means this is an earnings challenge, not a liquidity crisis. They have the financial strength to execute their strategy of sourcing diversification and price adjustments without stressing the balance sheet. For a deeper dive into who is betting on this strength, check out Exploring Weyco Group, Inc. (WEYS) Investor Profile: Who's Buying and Why?

Action: Re-evaluate your investment thesis based on the company's ability to withstand prolonged economic softness, not its ability to meet short-term debt. Weyco Group, Inc. can easily handle its obligations.

Valuation Analysis

You are looking at Weyco Group, Inc. (WEYS) right now and asking the core question: Is this stock a bargain, or a trap? The short answer is that the market is treating it as a deep value play, but with clear operational risks. Its valuation multiples suggest it is significantly undervalued compared to peers, but you must look closely at the earnings trend.

The core valuation metrics for Weyco Group, Inc. as of late 2025 paint a compelling picture for a value investor. Here's the quick math:

• Price-to-Earnings (P/E) Ratio (TTM): 10.89
• Price-to-Book (P/B) Ratio (TTM): 1.05
• Enterprise Value-to-EBITDA (EV/EBITDA) (TTM): 5.86

To be fair, a P/E of 10.89 is a deep discount when the Global Retail Distributors industry average sits much higher, suggesting the stock is cheap relative to its earnings power. The P/B ratio of 1.05 is barely above book value, meaning the market is valuing the company's equity only slightly more than its net tangible assets. This is classic 'value' territory. A low EV/EBITDA of 5.86 also points to a cheap stock when factoring in debt and cash, indicating the company's operating cash flow is not being richly valued by the market.

Stock Price Trend and Analyst View

The market sentiment is mixed, which is why the valuation is so low. Over the last 12 months, the stock has traded in a wide range, from a 52-week low of $25.51 to a high of $38.24. The recent price, hovering around $28.29 in November 2025, is near the bottom of that range, reflecting the pressure from declining sales and earnings reported in Q2 and Q3 2025.

The analyst community consensus is a cautious Hold with an average price target of $32.00. However, some models suggest a massive disconnect between the market price and intrinsic value. For instance, a Discounted Cash Flow (DCF) model estimates the fair value to be around $90.59. What this estimate hides is the risk tied to consumer spending pullback and margin contraction-the net profit margin slid to 9.2% from 10% last year.

Dividend Signal: A Closer Look at the Payout

Weyco Group, Inc. is a dividend stalwart, having maintained its dividend for over five decades. This commitment is a sign of long-term financial stability, but the numbers for 2025 require scrutiny.

The company's regular quarterly dividend is $0.27 per share, equating to a regular annual payout of $1.08. Based on the recent stock price, the regular dividend yield is approximately 3.96%.

However, the company recently declared a special cash dividend of $2.00 per share in November 2025. This one-time event boosts the forward annual payout to $3.08, which temporarily inflates the forward dividend yield to an eye-popping 11.06%.

Here is the breakdown of the dividend and coverage:

The high payout ratio is a temporary distortion. The special dividend of $2.00 per share, resulting in a total cash outlay of approximately $19 million, reflects a strong balance sheet and a strategy to return excess capital to shareholders, not a new, higher baseline for the regular dividend. This is a crucial distinction for income investors to make.

For a deeper dive into the company's operational strength and balance sheet, you should read Breaking Down Weyco Group, Inc. (WEYS) Financial Health: Key Insights for Investors.

Risk Factors

You need to understand that Weyco Group, Inc. (WEYS) is navigating some serious near-term headwinds, chief among them the unpredictable nature of global trade policy. The core takeaway is this: external tariffs are squeezing margins, and the company's pricing power is being tested by major wholesale customers.

In the third quarter of 2025, the impact of these risks was clear: consolidated gross earnings dropped to 40.7% of net sales, a notable decline from the 44.3% reported in Q3 2024. Earnings from operations fell even more sharply, down 21% to $8.1 million. That's a direct hit to profitability, and it's mostly tied to a few key areas.

External Risks: Tariffs and Macroeconomic Headwinds

The biggest financial pressure point is the U.S. trade and tariff policy, which remains extremely volatile. The effective total tariff rate on goods sourced from China, where Weyco Group, Inc. gets a majority of its products, was an astonishing 161% in Q1 2025, up from 16% in 2024. While the incremental tariff on China-sourced goods was 30% throughout Q3 2025, the uncertainty itself is a major operational risk.

Also, general market conditions are tough. Inflation and higher interest rates are making consumers think twice about discretionary purchases like footwear. This market softness contributed to overall net sales declining 2% to $73.1 million in Q3 2025. You're also exposed to foreign currency fluctuations, particularly with the Australian and Canadian dollars, which can quietly chip away at international earnings.

• Tariff uncertainty is the single largest cost headwind.

Operational and Strategic Risks

The company faced a significant operational challenge in its North American wholesale segment. Sales volumes were down 7% in Q3 2025, and a large portion of that was due to one major wholesale customer who rejected the new pricing structure. Weyco Group, Inc. had instituted a 10% price increase on July 1, 2025, to offset rising costs, but this led to order cancellations and a drop in sales volume.

Brand performance is a mixed bag, too. While the Florsheim brand is doing well, posting an 8% sales increase in Q3 2025, the BOGS brand is struggling, with sales declining 17% in the same period. Plus, the strategic decision to wind down the Forsake brand, while smart for portfolio optimization, shows that not all brands are pulling their weight. You also have the ongoing risk of relying on a few top executives, which is common in family-heritage companies, plus the ever-present threat of cybersecurity breaches.

Here's a quick look at the Q3 2025 financial impact:

Mitigation Strategies and Actions

Management is defintely not standing still. They are actively pursuing a three-pronged strategy to combat these risks. First, they are negotiating cost reductions with Chinese suppliers to soften the tariff blow. Second, they are accelerating efforts to diversify their manufacturing base away from China, reducing future geopolitical risk. Third, the company is maintaining a rock-solid balance sheet, which is a huge buffer against volatility. As of September 30, 2025, they held $78.5 million in cash and marketable securities and had zero debt on their $40 million revolving line of credit.

For more on the long-term strategic direction, you should review the company's guiding principles: Mission Statement, Vision, & Core Values of Weyco Group, Inc. (WEYS).

Growth Opportunities

You're looking for a clear path through the current market headwinds for Weyco Group, Inc. (WEYS), and the short answer is that their future hinges on a successful shift in product mix and aggressive supply chain management. While Q3 2025 net sales were down slightly to $73.1 million, the underlying brand performance and strategic moves show a company actively fighting back against macro pressures.

The core growth driver is product innovation, specifically the pivot toward refined hybrid and athleisure footwear. This is not a subtle trend; it's a market mandate. The Florsheim brand, which has embraced this shift with dress sneakers and hybrid styles, saw an 8% sales increase in Q3 2025, proving the strategy works. To be fair, this strength is offsetting declines in other areas, like BOGS, which saw a 17% drop in the same quarter due to continued softness in seasonal footwear.

Here's the quick math on their near-term focus:

• Product Innovation: Florsheim's hybrid footwear is the clear winner, with sales up 7% in Q1 2025 and 8% in Q3 2025.
• Pricing Power: The company implemented a 10% price increase in Q3 2025 to mitigate tariff impacts, a necessary but risky move that led to order cancellations from one large wholesale customer.
• Supply Chain De-risking: Weyco is accelerating diversification away from China, which is crucial since the effective tariff rate on China-sourced goods increased to 161% in early 2025.

The company's full-year revenue picture for 2025 is still forming, but the trailing twelve months (TTM) net sales through Q3 2025 stood at $279.84 million. This is a realistic anchor for your valuation models, especially since the TTM diluted earnings per share (EPS) is currently $2.54. Management is also showing confidence by increasing the quarterly dividend to $0.27 per share and declaring a special cash dividend of $2.00 per share in November 2025, backed by a strong balance sheet. That special payout of approximately $19 million signals they have cash in excess of what's needed for operations, with 2025 annual capital expenditures (capex) guided to a lean $1 million to $2 million.

Weyco Group, Inc. (WEYS) is defintely a value play with a strong balance sheet.

Competitive Advantages and Strategic Initiatives

What gives Weyco Group, Inc. a fighting chance in the cutthroat footwear market is a combination of financial discipline and entrenched relationships. Their balance sheet is a fortress, boasting a current ratio of 4.43 and a debt-to-equity ratio of only 0.045, which is minimal leverage compared to industry peers. This financial strength provides the operational flexibility to weather the current tariff and demand volatility.

Their multi-brand portfolio-Florsheim, Nunn Bush, Stacy Adams, and BOGS-allows them to target different customer segments and price points, reducing single-brand risk. Plus, their long-standing connections with major US retailers are a significant barrier to entry for smaller competitors. A new entrant would have to spend a fortune in marketing just to get shelf space.

Beyond product and finance, their strategic focus on Environmental, Social, and Governance (ESG) is a quiet differentiator that matters more to institutional investors every year. They have 15 ESG initiatives slated for 2022 through 2025, including a commitment to ensure at least 25% of all products meet environmentally-preferred material minimums by the end of 2025. This focus on sustainability, like sourcing over 75% of leather from Leather Working Group-certified suppliers, is a long-term play that enhances brand equity and supply chain resilience.

To understand the full context of these strategic moves, you should consider Exploring Weyco Group, Inc. (WEYS) Investor Profile: Who's Buying and Why?, which maps out who is betting on this turnaround.