Q1 2024 Weyco Group Inc Earnings Call
Okay.
Operator: Good day, and thank you for standing by. Welcome to the WEYCO Group First Quarter 2024 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand is raised.
Good day, and thank you for standing by and welcome to the Wake held group first quarter 'twenty 'twenty four earnings release conference call.
Operator: This time, all participants are in a listen only mode.
Operator: After the Speakers' presentation, there will be a question and answer session.
Operator: To ask a question. During this session you will need to press star one one on your telephone you will then hear an automated message advising that your hand is right.
Operator: To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker for today, Judy Anderson, Chief Financial Officer. Please go ahead.
Operator: Kill withdraw your question. Please press star one one again.
Operator: Please be advised that today's conference is being recorded.
Judy Anderson: I would now like to hand, the conference over to your first speaker for today Jody Anderson Chief Financial Officer. Please go ahead.
Judy Anderson: Thank you. Good morning, and welcome to WEYCO Group's conference call to discuss first quarter 2024 results. On this call with me today are Tom Florsheim Jr., Chairman and Chief Executive Officer, and John Florsheim, President and Chief Operating Officer. Before we begin to discuss the results for the quarter, I will read a brief cautionary statement. During this call, we may make projections or other forward-looking statements regarding our current expectations concerning future events and the future financial performance of the company.
Judy Anderson: Thank you.
Judy Anderson: Good morning, and welcome to Waco Group's conference call to discuss first quarter 2024 result.
Judy Anderson: This call with me today are Tom Florsheim Junior Chairman, and Chief Executive Officer, and John Florsheim, President and Chief operating Officer.
Judy Anderson: We wish to caution you that these statements are just predictions and that actual events or results may differ materially. We refer you to the section entitled Risk Factors in our most recent annual report on Form 10-K, which provides a discussion of important factors and risks that could cause our actual results to differ materially from our projections. These risk factors are incorporated herein by reference.
Judy Anderson: Before we begin to discuss the results for the quarter I will read a brief cautionary statement.
Judy Anderson: During this call we may make projections or other forward looking statements regarding our current expectations concerning future events and the future financial performance of the company.
Judy Anderson: We wish to caution you that these statements are just predictions and that actual events or results may differ materially.
Judy Anderson: We refer you to the section entitled Risk factors in our most recent annual or annual report on Form 10-K, which provides a discussion of important factors and risks that could cause our actual results to differ materially from our projections.
Judy Anderson: These risk factors are incorporated herein by reference.
Judy Anderson: They include, in part, the uncertain impact of inflation on our costs and consumer demand for our products, increased interest rates, and other macroeconomic factors that may cause a slowdown or contraction in the US or Australian economies. Overall net sales were $71.6 million, down 17% compared to record first quarter sales of $86.3 million in 2023. Consolidated gross earnings increased 44.7% of net sales compared to 43.1% of net sales in last year's first quarter due to higher gross margins in our North American Wholesale sector.
Judy Anderson: They include in part with the uncertain impact of inflation on our cost and consumer demand for our products increased interest rates.
Judy Anderson: And other macroeconomic factors that may cause a slowdown or contraction in the U S. Our Australian economies.
Judy Anderson: Overall, net sales were $71 $6 million down 17% compared to record first quarter sales of $86 $3 million in 2023.
Judy Anderson: Consolidated gross earnings increased 44, 7% of net sales compared to 43, 1% of net sales in last year's first quarter due to higher gross margins in our North American wholesale segment.
Judy Anderson: Earnings from operations were $8.3 million, down 21% from record first quarter operating earnings of $10.4 million in 2023. Net earnings were $6.7 million, or $0.69 per diluted share, compared to record first quarter net earnings of $7.4 million or $0.78 per diluted share last year.
Judy Anderson: Earnings from operations were $8 $3 million down 21% from record first quarter operating earnings.
Judy Anderson: $10 4 million in 2023.
Judy Anderson: Net earnings were $6 $7 million or 69 cents per diluted share compared to record first quarter net earnings of seven $4 million or 78 cents per diluted share last year.
Judy Anderson: Net sales in our North American Wholesale segment were $56.2 million, down 20% compared to record sales of $69.9 million in the first quarter of 2022. The decrease was largely due to a 48% decline in baud sales but also due to decreased sales across our legacy brands due to reduced demand following record sales growth early last year. Wholesale gross earnings were 39.6% of that sales compared to 38.2% of that sales in the first quarter of 2020.
Judy Anderson: Net sales in our North American wholesale segment were $56 $2 million down 20% compared to record sales of $69 9 million in the first quarter of 2023.
Judy Anderson: The decrease was largely due to a 48% decline in bogs sales, but also due to decreased sales across our legacy brands due to reduced demand following record sales growth early last year.
Judy Anderson: Wholesale gross earnings were 39, 6% of net sales compared to 38, 2% of net sales in the first quarter of 2023.
Judy Anderson: Growth margins improved as a result of lower inventory costs, primarily inbound freight. Wholesale selling and administrative expenses totaled $14.9 million for the quarter compared to $17.9 million last year. The decrease was primarily due to lower employee costs, including commission-based compensation.
Judy Anderson: Gross margins improved as a result of lower inventory costs, primarily inbound freight.
Judy Anderson: Wholesale selling and administrative expenses totaled $14 $9 million for the quarter compared to $17 $9 million last year.
Judy Anderson: The decrease was primarily due to lower employee costs, including commission based compensation.
Judy Anderson: As a percent of that sales, wholesale selling and administrative expenses were 27% in 2024 and 26% in 2023. Wholesale operating earnings totaled $7.4 million for the quarter, down 16% from $8.8 million in 2023, primarily due to lower. Net sales of our North American retail segment were a first quarter record of $9.8 million, up 10% over our previous record of $8.9 million in the first quarter of 2023. Retail growth as a percent of net sales was $65.3 million, 65.3%, and 66.3% in the first quarters of 2024 and 2023, respectively.
Judy Anderson: As a percent of that sales wholesale selling and administrative expenses were 27% in 2024 and 26% in 2023.
Judy Anderson: Wholesale operating earnings totaled $7 $4 million for the quarter down 16% from $88 million in 2023, primarily due to lower sales.
Judy Anderson: Net sales of our North American retail segment.
Judy Anderson: We're a first quarter record of $9 $8 million up 10% over our previous record of $8 $9 million in the first quarter of 2023.
Judy Anderson: Retail group.
Judy Anderson: None of that sales were 63.
Judy Anderson: 65, 3% and 66, 3% in the first quarter of 2024 and 2023, respectively.
Judy Anderson: Retail operating earnings were flat at $1.3 million in both 2024 and 2020. Higher retail sales were offset by increased selling and administrative expenses this year, primarily web freight. Our other operations historically included our retail and wholesale businesses in Australia, South Africa, and Asia Pacific, collectively referred to as Florsheim Australia. We ceased operations in Asia in 2023 and are in the final stages of winding down that business. As a result, the 2024 operating results of our other category primarily reflect those of Australia and South Africa.
Judy Anderson: Retail operating earnings were flat at $1 $3 million in both 2024 and 2023.
Judy Anderson: Higher retail sales were offset by increased selling and administrative expenses since you're primarily web great.
Judy Anderson: Our other operations historically included our retail and wholesale businesses in Australia, South Africa, and Asia Pacific collectively referred to as Florsheim, Australia.
Judy Anderson: We ceased operations in Asia in 2023 and are in the final stages of winding down that business. As a result, the 2024 operating results of our other category, primarily reflects that of Australia and South Africa.
Judy Anderson: Net sales of Florsheim Australia were $5.5 million, down 26% from $7.5 million in the first quarter of 2020. In local currency, its net sales were down 24% due mainly to lower sales in Asia as a result of the closing of our Asia operations and the mid-year 2023 loss of a sizable wholesale account in Australia. Retail sales in Australia. We're also down for the quarter due to the challenging retail environment. Florsheim Australia's gross earnings were 60.2% of net sales compared to 60.5% of net sales last year.
Judy Anderson: Net sales at Florsheim, Australia were $5 $5 million down 26% from $7 $5 million in the first quarter of 2023.
Judy Anderson: In local currency net.
Judy Anderson: Net sales were down 24% due mainly to lower sales in Asia as a result of the closing of our Asia operations and the midyear 2023 lots of a sizeable wholesale account in Australia.
Judy Anderson: <unk> sales in Australia were also down for the quarter due to the challenging retail environment.
Judy Anderson: Florsheim, Australia gross earnings were 62% of net sales compared to 65% of net sales last year.
Judy Anderson: Florsheim Australia generated operating losses of $400,000 for the period, down compared to operating earnings of $300,000 in last year's first quarter. The increase was primarily due to lower sales. Interest income totaled $900,000 in the first quarter of 2024 compared to $100,000 in last year's first quarter. Interest expense was zero for the quarter compared to $400,000 last year.
Judy Anderson: Florsheim, Australia generated operating losses of $400000 for the downturn.
Judy Anderson: I don't compare compared to operating earnings of $300000 in last year's first quarter. The decrease was primarily due to lower sales.
Judy Anderson: Interest income totaled $900000 in the first quarter of 2024 compared to $100000 in last year's first.
Judy Anderson: Interest expense was zero for the quarter compared to $400000 last year.
Judy Anderson: This year included interest earned on cash in the U.S. and Canada, while the prior year included interest expense incurred on outstanding debt balances during the period. At March 31, 2024, our cash and marketable securities totaled $84.7 million, and we had no debt outstanding on our $40 million line of credit. During the first three months of 2024, we generated $14.3 million of cash from operations and used funds to pay $4.7 million in dividends. We also had $200,000 of capital expenditures. We estimate that 2024 annual capital expenditures will be between $2 and $4 million.
Judy Anderson: Your included interest earned on cash in the U S and Canada well.
Judy Anderson: Prior year included interest expense incurred on outstanding debt balances during the period.
Judy Anderson: At March 31, 2024, our cash and marketable securities totaled $84 $7 million and we had no debt outstanding on our $40 million line of credit.
Judy Anderson: During the first three months of 2024, we generated $14 $3 million of cash from operations and used funds to pay $4 $7 million in dividends.
Judy Anderson: We also had $200000 of capital expenditures, we estimate that 2024 annual capital expenditures will be between two and $4 million.
Judy Anderson: On May 7, 2024, our Board of Directors declared a cash dividend of $0.26 per share to all shareholders of record, payable on June 28, 2024. This represents an increase of 4% above the previous quarterly dividend rate of $0.25. I would now like to turn the call over to Tom Florsheim, Jr., Chairman and CEO. Thanks, Judy, and good morning, everyone.
Judy Anderson: And they set up 2024, our board of directors declared a cash dividend of 26 cents per share to all shareholders of record.
Speaker Change: On May 17, 2024 payable June 28 2024.
Speaker Change: This was that this represents.
Speaker Change: An increase of 4% above the previous quarterly dividend rate of 25.
Speaker Change: I would now like to turn the call.
Judy Anderson: Junior.
Speaker Change: Chairman and CEO.
Speaker Change: Thanks, Judy and good morning, everyone.
Thomas W. Florsheim: It was a challenging quarter as our North American wholesale business was down 20% versus first quarter record first quarter sales in 2023. Our performance reflected industry headwinds as retailers are taking a conservative approach to inventory management. Given the soft sales trend in footwear and apparel categories and their focus on mainly lowering and maintaining lower inventory levels, while our shipments were down significantly, we remain encouraged by solid retail sell-throughs, especially in our legacy men's brand. Our overall legacy business was down 13%, with Stacey Adams, Dunn Bush, and Florsheim Brands down 16%, 13%, and 11%, respectively.
Speaker Change: It was a challenging quarter as our north American wholesale business was down 20%.
Thomas W. Florsheim: First quarter <unk>.
Thomas W. Florsheim: Record first quarter sales in 2023.
Thomas W. Florsheim: Our performance reflected industry headwinds as retailers are taking a conservative approach to inventory management.
Thomas W. Florsheim: Given the soft sales trend in footwear and apparel categories and their focus on mainly boring.
Thomas W. Florsheim: Maintaining lower inventory levels.
Thomas W. Florsheim: Our shipments were down significantly we remain encouraged by solid retail sell throughs, especially in our legacy men's brands.
Thomas W. Florsheim: Our overall legacy business was down 13% with Stacy Adams, Nunn, Bush, and florsheim brands down, 16%, 13% and 11% respectively.
Thomas W. Florsheim: After working through high inventories for much of 2023, retailers are reducing their upfront buys and are placing more orders on an as needed basis. We did see a nice uptick in our at-once business, but it was not enough to make up for the deficit. We anticipate this conservative trend among retailers will continue through the second quarter but are optimistic that demand will improve in the back half of the year. From a competitive perspective, we believe we are outperforming our peers in traditional dress and refined casual.
Thomas W. Florsheim: After working through high inventories for much of 2023 retailers are reducing their upfront buys at are placing more orders.
Thomas W. Florsheim: Needed basis.
Thomas W. Florsheim: We did see a nice uptick in our at once business, but it was not enough to make up for the deficit.
Thomas W. Florsheim: We anticipate this conservative trend among retailers will continue through the second quarter, but are optimistic that demand will improve in the back half of the year.
Thomas W. Florsheim: From a competitive perspective, we believe we are outperforming our peers in traditional dress and refined casuals.
Thomas W. Florsheim: We remain focused on evolving our brand to fit a more relaxed lifestyle and continue to expand our offerings in true casual and Hybrid Footwear. This spring, across all three brands, we introduced new products that are being well received by consumers. Although there is uncertainty in the current retail environment due to a variety of factors, we feel confident about the long-term trajectory of our legacy brands. In our outdoor division, bog sales were down 48% as the weather boot market remains under pressure.
Thomas W. Florsheim: <unk> focused on evolving our brand to fit a more relaxed lifestyle.
Thomas W. Florsheim: And continue to expand our offerings and true casual.
Speaker Change: And hi, Brite footwear.
Thomas W. Florsheim: This spring across all three brands, we introduced new product that is being well received by consumers.
Thomas W. Florsheim: Well there is uncertainty in the current retail environment due to a variety of factors, we feel confident about the long term.
Thomas W. Florsheim: However, our legacy brands.
Thomas W. Florsheim: And our outdoor division bogs sales were down 48% as the weather boot market remains under pressure.
Thomas W. Florsheim: As discussed during our fourth quarter conference call, we believe the indoor market will be challenging in 2024. Additionally, in this first quarter, BOG's decline in sales was driven by a tough comparison to last year's shipments. In early 2023, BOG shipped a large work boot program to a key account, which the brand did not anniversary in 2024. The loss of this program made up the majority of BOG's sales decline for the quarter.
Thomas W. Florsheim: As discussed during our fourth quarter conference call. We believe the market will be challenging in 2004.
Thomas W. Florsheim: Additionally, in this first quarter box decline in sales was driven by a tough comparison to last year's shipments in early 2023 barge shipped a large work boot program to our key account, which the brand did not anniversary.
Thomas W. Florsheim: 2020 for the loss of this program made up the majority of bogs sales declined for the quarter.
Thomas W. Florsheim: After multiple seasons of solid growth, the Boggs business lost momentum in the back half of 2023 due to the oversaturation of boots at retail in combination with very mild fall and winter weather. However, we believe the market is slowly normalizing as retailers work down their inventories. The hallmark of the BOGS brand is product innovation, and in the current environment, we are more committed than ever to introducing new products that separates BOGS from its competition. We are rolling out a wide range of boots that utilize BOG seamless construction, which is 30% lighter and over twice as durable than the standard vulcanized rubber boot.
Thomas W. Florsheim: After multiple seasons of solid growth the bogs business lost momentum in the back half of 2023.
Thomas W. Florsheim: Due to the oversea aspiration of boots at retail in combination with very mild fall and winter weather.
Thomas W. Florsheim: We believe the market is slowly normalizing as retailers work down their inventories.
Thomas W. Florsheim: The hallmark of the bogs brand is product innovation and in the current environment, we are more committed than ever to introducing new product that separates box from its competition.
Thomas W. Florsheim: We're rolling out a wide range of foods that utilized box seamless construction, which is 30% lighter and over twice as durable than the standard Vulcanize rubber boot. We believe the expansion of our seamless collection will be a difference maker.
Thomas W. Florsheim: We believe the expansion of our seamless collection will be a difference maker as the outdoor boot market resets with cleaner inventories this fall. Our retail segment was a bright spot in our first quarter with record sales and a 10% increase over last year. The increase was driven primarily by higher web sales for both Florsheim and Bach. The growth in our direct-to-consumer business reflects the strength of our brand portfolio, as well as the investment we have made in our e-commerce platform.
Thomas W. Florsheim: The outdoor boot market research with cleaner inventories this fall.
Thomas W. Florsheim: Our retail segment was a bright spot.
Thomas W. Florsheim: Our first quarter with record sales and a 10% increase over last year.
Thomas W. Florsheim: The increase was driven primarily by higher web sales for both florsheim and bogs.
Thomas W. Florsheim: The growth in our direct to consumer business reflects the strength of our brand portfolio as well as the investment we have made in our e-commerce platforms.
Thomas W. Florsheim: Our overseas business, which consists of Australia, New Zealand, Asia Pacific, and South Africa, collectively known as Florsheim Australia, had a sales decrease of 26% for the quarter. Sales were lower in part due to the closure of our Florsheim Asia retail locations at the end of last year and the loss of an important wholesale count in Australia. In addition, overall, retail and wholesale sales have been lackluster throughout much of the region, reflecting general macroeconomic pressures.
Thomas W. Florsheim: Our overseas business, which consists of Australia, New Zealand Asia Pacific and South Africa collectively known as portion of Australia had a sales decrease of 26% for the quarter.
Thomas W. Florsheim: Sales were lower in part due to the closure of our Florsheim Asia retail locations at the end of last year and the worst of it lasts up an important wholesale counter Australia.
Thomas W. Florsheim: In addition, overall retail and wholesale sales have been lackluster throughout much of the region, reflecting general macroeconomic pressures.
Thomas W. Florsheim: For the back half of the year, we are focused on expense management while we identify opportunities to get our overseas business back on a growth track. Changing Subjects. Our overall inventory as of March 31st, 2024, was 62 million, down from 74 million at December 31st, 2023. Our inventory is at a seasonal low point and will build up to approximately $75 million by the end of the second quarter. Our objective is to have inventory to support business at once on our core styles. Our overall gross margins were 44.7% for the quarter, up from 43.1% last year.
Thomas W. Florsheim: For the back half of the year, we are focused on expense management, while we identify opportunities to get our overseas business back on a growth track.
Thomas W. Florsheim: Changing subjects.
Thomas W. Florsheim: Our overall inventory as of March 31, 2024.
Thomas W. Florsheim: Were $62 million down from $74 million.
Thomas W. Florsheim: At December 31, 2023.
Thomas W. Florsheim: Our inventory is at a low seasonal low point and will build up to approximately 75 by the end of the second quarter.
Thomas W. Florsheim: Our objective is to have inventory to support at once business on our core styles.
Thomas W. Florsheim: Our overall gross margins were 44, 7% for the quarter up from 43, 1% last year.
Thomas W. Florsheim: As Judy mentioned, our wholesale margins benefited from lower inbound freight costs. Freight costs normalized in the first half of 2022. But because of the large buildup of inventories in 2022, it was not until late 2023 that we sold through inventory with higher freight costs and were able to begin realizing the full benefit of these lower freight costs. This concludes our formal remarks. Thank you for your interest in WEYCO Group. And I would now like to open the call to your questions.
Thomas W. Florsheim: As Judy mentioned, our wholesale margins benefited from lower inbound freight costs.
Thomas W. Florsheim: Freight costs normalized in the first half of 2022.
Thomas W. Florsheim: But because of the large buildup of inventories in 2022.
Thomas W. Florsheim: It was not until late 2023 that we sold through inventory with higher freight costs and we're able to begin realizing the full benefit of these lower freight costs.
Speaker Change: This concludes our formal remarks, thank you for your interest in <unk> group.
Speaker Change: And I would now like to open the call to your questions.
Thomas W. Florsheim: Thank you. At this time, we will conduct our question and answer session. As a reminder, to ask a question, simply press star 11 on your telephone. You will then hear an automated message advising that your hand is raised.
Speaker Change: Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question simply press star one one on your telephone.
Thomas W. Florsheim: Here, an automated message advising that your hand is raised.
Speaker Change: Draw. Your question. Please press star one one again, please standby, while we compile the Q&A roster.
Thomas W. Florsheim: Yeah.
Thomas W. Florsheim: Okay.
Thomas W. Florsheim: Okay.
Operator: To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Thank you. Our first question comes from the line of David Wright of Henry Partners. Your line is now open.
Thomas W. Florsheim: Thank you. Our first question comes from the line of David Wright of Henry Partners. Your line is now open.
David W. Wright: Good morning, everyone. Good morning, morning. Thanks again for having a conference call, Tom. Not every company does, and it's great that you do. So, thank you. And thanks also for the dividend increase. I appreciate it.
David W. Wright: Yes, good morning, everyone.
David W. Wright: Good morning, good morning.
David W. Wright: Thanks, again for having the conference call Tom.
David W. Wright: Not every company does.
David W. Wright: It's great that you do so thank you.
David W. Wright: Thanks also for for the dividend increase.
David W. Wright: Appreciate it.
David W. Wright: Okay.
Thomas W. Florsheim: A couple of questions that I have are: on the stock buyback, you bought back around $4 million in the last couple of years each year. And I noticed here in the first quarter that the stock buyback was de minimis, and I wondered if there was a reason for that. The reason is really just that we haven't, we haven't, we've been out there buying stock, I think, for the majority of the year. And, you know, we set a limit on the price, but the limit, actually, which I'm not at liberty to say is fairly high. And even given that, there have been enough buyers of our stock that we just haven't been able to get more. Well, I guess that's a happy problem to have. I agree; it is a happy problem.
David W. Wright: A couple of questions that I have are.
Thomas W. Florsheim: On stock buyback you bought back around $4 million the last couple of years each year.
Thomas W. Florsheim: And I noticed here in the first quarter that the.
Thomas W. Florsheim: The stock buyback was was de Minimis and I wondered if there was a reason for that.
Thomas W. Florsheim: The reason is really just.
Thomas W. Florsheim: We haven't we haven't we've been out there buying stock I think for the majority of the year.
Thomas W. Florsheim: We set a limit on the price, but the limit actually.
Thomas W. Florsheim: Not at Liberty to say is fairly high.
Thomas W. Florsheim: But even given that.
Thomas W. Florsheim: Theres been enough.
Thomas W. Florsheim: Buyers of our stock that we just haven't been able to get more.
Thomas W. Florsheim: I guess, that's a happy problem to have.
Thomas W. Florsheim: I agree it is a happy problem.
David W. Wright: You commented, you've done a great job working the inventory down from very high levels coming out of COVID and you talk about having to build it back up to 15 or so million dollars by the end of the quarter. What kind of free cash flow are you projecting for the full year? Judy, do you have... We don't have, we don't have an exact number.
Thomas W. Florsheim: Yes.
David W. Wright: Commented you've done a great job working inventory down from very high levels.
Speaker Change: Coming out of Covid and.
David W. Wright: You talked about having to build it back up 15 or so million bye.
Judy Anderson: By the end of the quarter.
David W. Wright: What kind of free cash flow are you projecting for the full year.
Judy Anderson: Judy do you have.
Judy Anderson: Idea of that.
Speaker Change: Uh huh.
Judy Anderson: I don't think it's going to affect, you know, our cash much. In fact, when you look at when, the reason that our inventory is a little bit low right now is that we still make a lot of products in China, and when they're closed for the Chinese New Year, we have a dry period.
David W. Wright: Yes.
Speaker Change: We don't have we don't have an exact number I don't think it's going to affect.
Judy Anderson: Our cash March in fact.
Judy Anderson: When you look at it.
Judy Anderson: The reason that our inventory is a little bit lower right. Now is we still make a lot of product in China.
Judy Anderson: And then when Theyre closed for Chinese new year, we have a dry period.
Judy Anderson: And now shoes for fall are starting to come in. So we'll build up the inventories, but we have, you know, lower, lower payables than we did a year ago and higher receivables. So, I mean, I don't see this as being a big dent in our cash at all. Right, it's kind of a normal seasonal variation.
Judy Anderson: And now shoes for far starting to come in so we're brought up the inventories, but we have.
Judy Anderson: Lower payables that we did a year ago at higher receivables. So I mean, I don't see this as being a big dent in our cash at all.
Judy Anderson: It's kind of a normal seasonal.
David W. Wright: Sure, sure. But it's like, I mean, I just wondered, because of the inventory drawdown, you, you're, your cash flow, your cash from operations last year was $98 million. It was a huge and.
Judy Anderson: Variation.
Speaker Change: Sure sure.
David W. Wright: I, just wonder if because of the inventory drawdown.
David W. Wright: Sure.
David W. Wright: Your cash flow your cash from operations last year was $98 million. It was a huge number.
David W. Wright: The whole business model is just so impressive. Yeah, well, I mean, she, you can see it, I know the company goes back a long way. But you know, you're paying a fair dividend, you're buying stock back, you're running a conservative balance sheet, and business is very profitable. You manage it so well through COVID. And coming out of it, I, you know, the work shows revenues. We're down quite a lot in the first quarter, but the margins are maintained, which shows a lot of efficiency.
David W. Wright: Sure.
Speaker Change: Thats great.
David W. Wright: <unk> business model is just so impressive.
David W. Wright: And then the way that it's run is actually kind of old school.
David W. Wright: And if it's successful it's really nice to see.
Speaker Change: So don't change anything.
Speaker Change: Thank you David Thank you for saying that.
David W. Wright: Yeah, well I mean.
David W. Wright: You can see it I know the company goes back a long ways.
David W. Wright: But.
David W. Wright: You are paying a fair dividend youre buying stock back Youre running a conservative balance sheet.
David W. Wright: The business is very profitable.
David W. Wright: Managed so well through Covid.
David W. Wright: And coming out of it.
David W. Wright: Yeah.
David W. Wright: Good work shows the revenues were down quite a lot in the first quarter, but.
David W. Wright: The margins maintained which shows a lot of efficiency, so I can't say enough good things.
David W. Wright: So, I can't say enough good things. All right, well, thank you very much. It's nice to start out the investor call with some nice comments like that. So thank you. And then just to close, Tom, a real quick question. You know, the consumer dynamics. Sometimes I ask about them. I wonder when you talk about shoes, like, shoes are sort of like, you know, your feet are your feet. And I just wondered, like, what's the return rate?
David W. Wright: Alright.
David W. Wright: Thank you very much it's nice to start out with.
David W. Wright: The investor call with.
David W. Wright: With having some nice comments like that so thank you.
David W. Wright: And then just to close a real quick question.
David W. Wright: The consumer dynamics, sometimes I ask about them.
David W. Wright: I Wonder when you talk about the.
David W. Wright: Higher higher sales from the websites.
David W. Wright: Like shoes, they're sort of like.
David W. Wright: Peter your feed and I, just wonder like what's sort of the return rates.
David W. Wright: from what I'm going to call mail order shoes because obviously, people can't try them on in the store. Yeah, you know, my brother, John, who runs the area of the businesses here, and he's going to answer that question. It varies a little bit by brand, but overall, we have 12 to 13%.
David W. Wright: But I'm going to call mail order shoes.
David W. Wright: Because obviously people can't try the bond in the store.
David W. Wright: Yes, My brother, John who runs that area of the business is here he's going to answer that question varies a little bit by brand, but overall, we averaged 12% to 13%.
John W. Florsheim: We get a lot of repeat customers. You're buying, buying, footwear from our different brands. And that 12 to 13% is very low compared to an industry standard.
John: When you get a lot of repeat customers.
Speaker Change: Bye bye.
John W. Florsheim: Footwear from our different brands and that 12% to 13% is very well from an industry standard perspective.
David W. Wright: Yeah, that surprises me. That is really great. So, more good news. Thanks for your time this morning. Thanks for taking my question. Thank you for your questions. Have a good day. [inaudible] Thank you for your question. At this time, I am showing no additional questions in the queue.
John: Yeah that that surprises me that is really great. So.
David W. Wright: More good news. Thanks for your time this morning, thanks for taking my questions.
David W. Wright: Thank you for your questions have a good day.
Speaker Change: Yes. Thank.
Judy Anderson: I would now like to turn the call back over to Judy Anderson, Chief Financial Officer, for some closing remarks. We just wanted to say thank you for listening to our call today and we hope you all have a great day. Thank you. This does conclude today's call. You may now disconnect. Thanks for watching!
David W. Wright: Thank you for your question.
Speaker Change: At this time I am showing no additional questions in the queue I would now like to turn the call back over to Judy and Anderson Chief Financial Officer for some closing remarks.
Judy Anderson: We just wanted to say thank you for listening to our call today and we hope you all have a great day.
Judy Anderson: Thank you. This does conclude today's call you may now disconnect.
Judy Anderson: Okay.
Judy Anderson: [music].
Judy Anderson: Okay.
Judy Anderson: Yes.
Judy Anderson: [music].
Judy Anderson: Okay.
Judy Anderson: [music].