Good day, and thank you for standing by. Welcome to the Weyco Group third quarter 2023 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'll need to press star one one on your telephone. You'll then hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Judy Anderson, Chief Financial Officer. Thank you. Good morning, and welcome to Weyco Group's conference call to discuss third quarter 2023 results. On the 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. 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. 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 U.S. or Australian economies. Overall, net sales were $84.2 million, down 13% compared to record third quarter sales of $97 million in 2022. Consolidated gross earnings increased to 43% of net sales, compared to 40.6% of net sales in last year's third quarter, due mainly to higher gross margins in our North American wholesale segment. Quarterly earnings from operations were $12.4 million, down 12% compared to record operating earnings of $14.2 million in 2022. Quarterly net earnings totaled $9.3 million, or $0.98 per diluted share, compared to record net earnings of $10.8 million or $1.12 per diluted share last year. Net sales in our North American wholesale segment were $69.5 million, down 15% compared to record sales of $81.6 million in 2022. The decrease was primarily due to a 42% decline in Bogs sales compared to record sales for the brand last year. This quarter, our wholesale sales were negatively impacted by reduced consumer demand following record growth last year. Looking ahead to the fourth quarter, we anticipate that our sales will continue to fall short of 2022. Not only are we going up against a strong fourth quarter last year, but retail market conditions remain challenging as the pace of consumer spending in the footwear category has slowed, which we believe will continue to impact our business at least the remainder of the year. Wholesale segment gross earnings were 38.6% of net sales in the third quarter of 2023, compared to 36.3% of net sales last year. Gross margins improved as a result of lower inventory costs compared to last year, primarily related to inbound freight costs. Wholesale segment selling and administrative expenses were $15.6 million for the quarter, compared to $16.7 million last year. The decrease was primarily due to lower employee costs, mainly commission-based compensation. As a percent of net sales, selling and administrative expenses were 22% and 21% of net sales in the third quarters of 2023 and 2022, respectively. Wholesale operating earnings totaled $11.3 million for the quarter, down 13% from $12.9 million last year, due primarily to lower sales. Net sales in our North American retail segment were a third quarter record of $7.6 million, up 6% over our previous record of $7.1 million last year. The increase was due to higher sales across all our domestic e-commerce websites, with the largest increases at Bogs and Florsheim. Retail segment gross earnings as a percent of net sales were 65.4% and 66.3% in the third quarters of 2023 and 2022, respectively. Selling and administrative expenses for the retail segment totaled $4 million, or 53% of net sales for the quarter, compared to $3.9 million, or 55% of net sales last year. Third quarter retail operating earnings rose to $926,000, up 12% compared to $825,000 last year... mainly due to the increase in web sales. Our other operations consist of our retail and wholesale businesses in Australia, South Africa, and Asia Pacific, collectively referred to as Florsheim Australia. Net sales of Florsheim Australia totaled $7.1 million, down 14% compared to $8.2 million in the third quarter of 2022. In local currency, its net sales were down 10%, primarily in its wholesale businesses. Florsheim Australia's gross earnings were 61.6% of net sales, compared to 61.4% of net sales in last year's third quarter. Its operating earnings were $256,000 for the quarter versus $476,000 last year. The decrease was primarily due to lower earnings in Australia's wholesale businesses as a result of lower sales. At September 30th, 2023 09/30/2023, our cash, short-term investments and marketable securities totaled $41 million, and we had no debt outstanding on our $40 million revolving line of credit. During the first nine months of 2023, we generated $62.9 million of cash from operations, due mainly to reductions in inventory levels. We used funds to pay off $31.1 million on our line of credit, to pay $9.3 million in dividends, and to repurchase $3.4 million of our common stock during the nine-month period. We also had $2.6 million of capital expenditures. We estimate that 2023 annual capital expenditures will be between $3 million and $4 million. On November 7th, 2023, our board of directors declared a cash dividend of $0.25 per share to all shareholders of record on November 27th, 2023, payable January 2nd, 2024. I would now like to turn the call over to Tom Florsheim Jr., our Chairman and CEO. Thanks, Judy, and good morning, everyone. Sales in our North American wholesale business were down 15% for the quarter. While we are never pleased with the decrease, the comparison was against a record third quarter last year. Wholesale sales in 2022 reflected strong demand, but also significant pipeline fill, as many accounts were replenishing stock depleted due to pandemic-related supply chain delays. To provide some context, taking out 2022, this year's third quarter would have been our most profitable third quarter in wholesale operating earnings. This year, the retail environment is more challenging due to macroeconomic pressures and consumers are being cautious in terms of expenditures on footwear and apparel. With demand softening, retailers are being conservative with at-once and future orders at the wholesale level. The change in retail dynamics is most apparent in the outdoor market. Given the spike in demand in 2021 and the first half of last year, retailers placed heavy orders with the expectation of strong consumer sell-throughs. Sales did not keep pace in the back half of last year, and the outdoor trade channel entered 2023 with an inventory glut. The situation has been exacerbated by unseasonably warm weather in early fall. As a result, Bogs shipments declined 42% compared to record sales for the brand last year, with retailers placing fewer orders due to the current saturation of product in the market. The Bogs brand has enjoyed very strong performance over the last few years, and we see the current decline as a category issue. While the majority of our Bogs inventory is in core product that remains valid from year to year, we are also taking steps to reduce inventory of slower-moving styles. We believe the situation is manageable, but anticipate that the inventory backlog in the outdoor footwear category will not normalize until the back half of 2024. While the market is challenging, we are not standing still and are optimistic about the brand's long-term growth prospects, given Bogs' strong consumer loyalty. We continue to develop exciting new Bogs product with special focus on less insulated footwear with a longer selling season. In terms of our legacy business, Florsheim net sales were down 7% compared to record sales for the brand in last year's third quarter. Sales of Stacy Adams were down 1%, and sales of the Nunn Bush brand were up 11%, with the increase driven in part by incremental sales in the casual and hybrid categories and new programs to a few large retailers. The performance of our legacy business was respectable, given each brand was up against strong sales in 2022. In addition, retail feedback indicates that our brands are among the most productive within their respective categories in a difficult environment. While Florsheim, Stacy Adams, and Nunn Bush are positioned differently from a fashion and price perspective, there are common threads across our legacy business. We believe that Florsheim, Nunn Bush, and Stacy Adams all reflect outstanding value and trend-right design within their respective categories. As such... All three brands maintained solid retail sell-throughs despite a general slowdown in the more refined footwear category. We are also encouraged by our progress in selling hybrid footwear that is more casual in nature, but can be worn across a variety of settings from office to social occasions. Consumers are gravitating towards this category of footwear, and we see this as an important growth area for our legacy business. From a product development perspective, we are expanding our range of hybrid footwear while selectively adding to our true casual and refined assortment. Retail sales were up 6% for the quarter, with increase driven primarily by our E-commerce business. Footwear industry statistics indicate the E-commerce sales channel is down year-to-date, so it is encouraging that we continue to grow our E-commerce platform in a very competitive environment. Sales at Florsheim Australia were down 14%, and in local currency, were down 10%. As mentioned in our second quarter conference call, the Australian market is facing some of the same challenges as in the U.S. regarding softness in the footwear and apparel category. We also lost a sizable wholesale account that impacted our wholesale shipments for the quarter. Going forward, we believe that we'll make up some of this deficit in the Australian market through other accounts, as well as the transfer of the Asia Pacific wholesale business to the Florsheim Australia office. Our inventory level was $79.6 million as of September 30, 2023, compared to $128 million at December 31st, 2022. We feel that our inventory is now at a good level overall, but continue to focus on any areas where we have slow-moving product. Our overall gross margin was 43%, compared to 40.6% last year. We have worked hard to offset increased costs, and our margins are now at a healthy level. 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. Thank you. As a reminder, to ask a question, you'll need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we check our Q&A roster. Our first question comes from the line of John Deysher with Pinnacle. Your line is now open. Good morning, everyone. Good morning, John. Good morning. Good, good progress on the inventories. Glad to see the debt paid off. Just curious what the plans are for the cash going forward. I know you raised your dividend recently, and I think you bought back, what? 2.4 million shares year to date. Is there anything remaining on the share repurchase at this point? Yes. Judy, can you give me that number? What's remaining? 903,000 shares. Is remaining? Did you hear it? Yeah. So we have plenty, plenty remaining. Good. Yeah, so I mean- I was just gonna say, what was the average on the 2- Go ahead. What was the average on the $2.4 million buyback? 25-43. Yes. $25.43. Is that number right, the 2,000,004? I thought it was a little higher. Total cost of our shares purchased through October 31st is about $4,094,000. Yeah. So it's about $3.8 million, John. Mm-hmm. 3.8 million shares at $25- No, no, dollars, dollars. Dollars. No, no. Wait. $3.8 million. 3.8, and the average cost is $25.43. Right. So we can give you the number of shares. How many shares was that, John? $149,000. Yeah, 140. 149,000, John. Oh, okay. Sorry, my mistake. Sorry, Tom, I cut you off. What were you gonna say as to the future uses? Well, we're gonna continue to probably build some cash. I mean, a lot of that cash that we built is from... We spent a lot of money building up our inventories because our inventories were depleted due to all the supply chain issues. And also coming out of COVID, our inventory basically evaporated, and then we had to rebuild those inventories. And because the demand was so high, we built them up to a fairly high level. And so now that we've brought them down to what we consider a good level, we're not gonna see as much cash pour in as you've seen over the last nine months. And so, you know, we're gonna watch it, and we're gonna continue to do stock buybacks. We had a record of increasing our dividend for years, and our plan, I think, is that we're gonna continue to try to increase our dividend on an annual basis. Okay. Oh, that's, that's helpful. Would you consider a special dividend? I don't think you've done that historically, but is that, I don't, I don't think we've done that either, but if our cash continues to go up, it's definitely something that we might consider. ... Okay, good. That's helpful. What's the status of Forsake? You know, you bought that over a year ago. I'm just wondering where we are with that, and, you know, is that brand really adding, adding value to the portfolio? And if not, you know, what are the plans? Yeah, no, first of all, I wanna state that the Forsake brand represents roughly 1% of our total annual sales. So it, when we bought it, it was very small, it remains small. And part of the reason, a big part of the reason it remains small, is because our timing definitely could have been better, you know, buying an outdoor brand when the market for, in that category is just totally saturated. And so what we've done, John, the last year and a half, is retool the brand. And so, fall of 2023 is really the first season that we started to get new product out there, and we have new product that's planned for spring of 2024 and fall of 2024. And John and I just came back from our sales meeting. We had a sales meeting for Bogs and for Forsake out in Portland, and we actually are encouraged about the brand. I mean, I'm not making any promises, but we feel that it has unique positioning. We have a really good guy running the brand. The product looks good. We have put together a national sales force of agents, which the brand never had before. And so we wanna give it a chance. And again, it's less than 1% of our business, so it's not hurting us. And we have a very talented office out in Portland that's running Bogs, and so there's quite a lot of efficiency there because we have the same design people doing both brands. And so we're gonna... We wanna give it a little bit of time, you know, let the market clear up from this inventory glut and see what happens. We're hoping that the inventory glut clears next year, and so that the back half is better, and we'll see what, we'll see what happens. But it just has not had a fair chance, and so, you know, we wanna give it that. Okay. All right, fine. So you've got the pieces in place. You just need to execute at this point. Exactly. Exactly. Okay, good. Fair enough. Congrats on a pretty good quarter. Thanks. Thanks, John. We appreciate your questions. Thank you, John. We're showing no further questions at this time, and I would now like to turn it back to Judy Anderson for closing remarks. Just like to thank everybody for joining us today, and wish you a great back half of your week, this week. Thank you. Yes, thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.