1) Financial Performance Overview
- Net sales for Q2 2026 were $62.2 million, a 7% increase from Q2 2025.
- Consolidated gross earnings improved to 70.4% of net sales, up from 43.3% YoY.
- Earnings from operations rose to $17 million from $3.9 million in the prior year.
- Net earnings reached $13.3 million, compared to $2.3 million in Q2 2025.
- Diluted earnings per share increased to $1.39, up from $0.24 YoY.

2) Segment Performance
- Wholesale Segment:
- Net sales were $48.8 million, a 7% increase from $45.6 million in Q2 2025.
- Gross earnings as a percentage of net sales improved to 70% from 37.6% YoY.
- Operating earnings rose to $16 million, up from $4.1 million last year.
- Retail Segment:
- Net sales totaled $7 million, a 4% increase from $6.8 million in 2025.
- Gross earnings improved to 79.2%, up from 66.6% YoY.
- Operating earnings reached $1 million, compared to $100,000 last year.
- Florsheim Australia:
- Net sales were $6.4 million, a 10% increase from $5.8 million in 2025, though down 1% in local currency.

3) Impact of Tariffs and Cost Management
- The company recognized $15.3 million in tariff refunds, significantly impacting gross margins.
- Tariff refunds included $14.3 million for the Wholesale segment and $1 million for Retail.
- The company faces ongoing uncertainty with the U.S. administration's tariffs, which were increased to 12.5% in July 2026.
- Mitigation strategies are in place to adapt to evolving trade policies.

4) Operational Strategies and Product Plans
- The company is focusing on enhancing the Nunn Bush brand through comfort technology and quality materials to differentiate from competitors.
- BOGS brand sales increased by 10%, with a focus on promoting its unique seamless construction.
- The Florsheim brand saw a 12% increase in sales, driven by strong demand for traditional dress shoes and casual footwear.
- The company plans to increase inventory to $70 million by year-end to support anticipated demand and mitigate tariff-related disruptions.

5) Guidance and Outlook
- The company is optimistic about its growth trajectory despite challenges in the discretionary consumer goods market.
- There is a focus on maintaining healthy cash flow, with $98.1 million in cash and no debt on the revolving credit line.
- The Board declared a cash dividend of $0.28 per share, payable on September 30, 2026.
- Future performance may be impacted by ongoing tariff uncertainties and inflationary pressures affecting consumer spending.

Bottom line: Weyco Group demonstrated strong financial growth in Q2 2026, driven by tariff refunds and solid performance across key brands, despite facing ongoing challenges from trade policies and inflation. The company's proactive inventory management and strategic focus on brand differentiation position it well for future growth, making it an attractive option for shareholders.