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MILWAUKEE--Weyco Group, Inc. today announced financial results for the quarter ended June 30, 2010.

Net sales for the second quarter were $48.7 million, a decrease of 3 percent from second quarter 2009 sales of $50.1 million. Net earnings for the quarter were $1.3 million, down from $2.2 million in 2009. Net earnings included a decrease of $0.8 million resulting from exchange gains and losses on intercompany loans between the U.S. and Florsheim Australia. These amounts are included in other income and expense on the statement of earnings. Diluted earnings per share were $.11 per share in 2010 as compared with $.19 per share in the second quarter of 2009.

Net sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, were $35.3 million for the second quarter of 2010, compared with $35.9 million in the same period in 2009. Wholesale sales were $34.8 million in the second quarter of 2010, down from $35.4 million in 2009. Licensing revenues were $470,000 in 2010 and $552,000 in 2009. Wholesale net sales of Stacy Adams footwear were up 2 percent, while sales of the Nunn Bush brand were flat and Florsheim were down 7 percent.

Net sales in the North American retail segment, which include sales from the company's 35 Florsheim retail stores in the U.S. and its Internet business, were $5.3 million in the second quarter of 2010, compared with $5.4 million in the second quarter of 2009. One retail store closed during the second quarter 2010. Same store sales were down 1 percent.

Other net sales, which include wholesale and retail sales in Europe, Australia, Asia and South Africa, were $8.1 million in the second quarter of 2010, compared to $8.7 million in 2009. The majority of the decrease occurred in the Australian wholesale business.

Operating earnings for the second quarter of 2010 were $1.7 million, down from $2.2 million in 2009. As a percent of sales, operating earnings were 3.5 percent in 2010 and 4.4 percent in 2009. The decrease in operating earnings for the second quarter was primarily due to decreased sales volume.

Earnings before tax were $1.9 million for the second quarter of 2010 compared to $3.7 million last year. This decrease is caused by the $500,000 decrease in operating earnings and a decrease in other income and expense of $1.3 million, resulting from a $1.2 million ($0.8 million after tax) decrease in the exchange gains and losses recognized on intercompany loans between the U.S. and Florsheim Australia. In the second quarter of 2010, a loss of $344,000 was incurred versus a gain of $870,000 in 2009.

"The retail environment continues to be challenging," stated Tom Florsheim, Jr., chairman and CEO of Weyco Group. "After an initial uptick in demand in the first quarter, consumers have once again returned to a more cautious approach to discretionary spending. In addition, retailers continue to closely monitor their inventory levels. We are looking forward to the fall when we have a number of different product launches being delivered. We continue to invest in our brands and work with our retail partners to build our businesses."

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