Q3 2019 Earnings Call

As well as into work boots, both categories, which are less dependent on inclement weather.

Well, we are still very happy when there were so what the forecast across the country, we feel better positioned than the bad.

Oh the files.

Our done of course business was down 2% as in previous quarters, not Bush's decline is primarily due to the challenges facing the purpose short trade channel and other key trade channels and of course, because that's the salad and not bush continuous chair and to introduce successful new product, especially in the casual or.

Reno.

Stacy Adams had difficult quarter with sales down 5%.

The majority of the decline came from a decrease in the off price channel. She had ups has been our most consistent growth story over the last few years.

In a shrinking dress shoe market brand has been able to fund the tribe and remain very wrong, but by offering a unique fashion perspective accessible price points.

In order to get back into growth track, we're focused on diversified Stacy apps to include more versatile genes oriented footwear to leverage the straight to the brand at today's more casual market.

And our North American retail segment, our ecommerce businesses are experiencing good growth, we continue to it its asking our ecommerce business in North America as well as other key global markets at yes, Internet direct to consumer sales are becoming.

For the back half a business model.

[noise] or overseas business was down 7% for the quarter with all the loss coming from a 9% decrease.

A portion of Australia business, which encompasses Australia, New Zealand the Pacific Rim in South Africa.

We experienced significant challenges in our Hong Kong retail and wholesale business based on the disruptions from the protests in that market.

Our Australia business also continues to be difficult is we're working to clean up obsolete inventory and the exit unprofitable leases, we believe that will be in a position to reset this business and look forward to an improved bottom wide for international businesses in 2020.

Our inventory levels as of September 30, up 2018 were 81 million compared to 60 billion at the same time, one year ago. The main driver for increased inventory levels as our strategy to bring in as much product ahead of the dates where additional duties are opposed to Chinese footwear.

Whether up or shoes that effective date for the additional 50% duty was September 1st if we were able to cover much of our 2018 needs I'm other shoes at the old rate of eight half for side.

The additional 15% duty for our box rubber boots is set to go into effect December 15th So we're covering much of our needs for 2020 are corpuz by bringing these and early as well.

Cost of carrying the extra inventory as much cheaper than the additional 15% tariff.

Overall gross margins were 39.2% versus 38.8% a year ago.

Stable pricing for our factory base as selective price increases have helped improve prove our gross margins.

However, as explained we are facing increased duties of other footwear and Walker increase judy's on box product later this year.

We have worked with our Chinese suppliers to get discounts that have raised our pricing to customers to offset somebody impact from the additional duties were also working to transfer some product to further diversify our supply chain moving forward.

The ultimate impact this will have on our 2020 results.

As not known at this time.

That concludes our formal remarks, thanks for your addressing Weyco group at I'd now like to open the call to your questions.

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Okay. We will we will end the call.

Thank you.

Ladies and gentlemen. This concludes today's conference. Thank you for participating you may now disconnect.