Good day, and thank you for standing by. Welcome to the Weyco second quarter 2024 earnings 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 one one on your telephone, and then you will hear an automated message advising 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. Judy? Good morning, and welcome to Weyco Group's conference call to discuss second quarter 2024 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 for the second quarter of 2024 were $63.9 million, down 5% compared to sales of $67 million in 2023. Consolidated gross earnings increased to 43.9% of net sales, compared to 43.3% of net sales in last year's second quarter, due mainly to higher gross margins in our North American wholesale segment. Earnings from operations were flat at $6.7 million in both the second quarters of 2024 and 2023. Net earnings were a second quarter record of $5.6 million, or $0.59 per diluted share, up 15% over our previous record of $4.9 million, or $0.50 per diluted share last year. Net sales in our North American wholesale segment were $50.2 million, down 2% from $51.5 million in the second quarter of 2023. The decrease was due to lower sales of our Bogs and Stacy Adams brands, partially offset by higher sales of our Nunn Bush and Florsheim brands. Wholesale gross earnings were 38.2% of net sales in the second quarter of 2024, compared to 37% of net sales last year. Gross margins improved as a result of lower inventory costs. Wholesale selling and administrative expenses totaled $13.4 million for the quarter, compared to $13.7 million last year, which constituted 27% of net sales in both periods. Wholesale operating earnings totaled $5.8 million for the quarter, up 8% from $5.4 million in 2023, primarily due to the impact of higher gross margins. Net sales in our retail segment were flat at $7.6 million in both the second quarters of 2024 and 2023. Retail gross earnings as a percent of net sales were 67.5% and 66.2% in the second quarters of 2024 and 2023, respectively. Retail operating earnings were $700,000, down from $1.1 million in last year's second quarter. The decrease was due to higher retail selling and administrative expenses this year, primarily web advertising and freight costs. Web advertising expenses in the second quarter of 2024 increased compared to last year's second quarter, due to the reallocation of certain expenditures historically charged in our wholesale segment that primarily benefit our websites. 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 the Asia Pacific region in 2023 and are in the final stages of winding down that business. As a result, the 2024 operating results of the other category primarily reflect that of Australia and South Africa. Net sales of Florsheim Australia were $6.1 million, down 23% from $7.9 million in the second quarter of 2023. Florsheim Australia's gross earnings were 62% of net sales for the quarter, compared to 62.4% of net sales last year. Its operating earnings totaled $200,000 for the period, down from $300,000 last year as a result of lower sales. Interest income totaled $1 million in the second quarter of 2024, compared to $200,000 in last year's second quarter. This year included interest earned on higher cash balances in the U.S. and Canada. At June 30, 2024, our cash and marketable securities totaled $84.8 million, and we had no debt outstanding on our $40 million revolving line of credit. During the first six months of 2024, we generated $17.7 million of cash from operations and used funds to pay $7.2 million in dividends. We also repurchased $500,000 of company stock and had $300,000 of capital expenditures. We estimate that 2024 annual capital expenditures will be between $1 million and $3 million. On August 6, 2024, our board of directors declared a cash dividend of $0.26 per share to all shareholders of record on August 19, 2024, payable September 30, 2024. I would now like to turn the call over to Tom Florsheim Jr., Chairman and CEO. Thanks, Judy, and good morning, everyone. We are pleased with our wholesale performance, especially given the challenging economic environment for discretionary purchases like footwear. While total branded shipments were down 2% for the quarter, we were able to deliver higher wholesale operating earnings, driven by improved gross margins, and we registered solid increases with two of our brands. As we enter the back half of the year, many retailers remain conservative in their approach to future order bookings. However, we are encouraged by the strength of our at-once business, and we believe we are well-positioned with the right inventory to leverage an uptick in consumer demand. Our legacy wholesale business increased slightly in the second quarter, with Florsheim and Nunn Bush up 3% and 8% respectively, and Stacy Adams down 10%. The increase for Nunn Bush was partially due to a timing shift of shipments to a large retailer from third to second quarter. Our legacy brands face the challenge of maintaining a strong position in refined footwear while expanding their presence in the casual segment. The traditional dress and dress casual footwear categories comprise a meaningful but shrinking market. We have done well over the years, with all three legacy brands picking up market share by offering great product value in fresh, relevant designs that resonate with consumers. While we remain committed to maximizing our leadership position in refined footwear, growth over the medium to long term is dependent on each brand's ability to navigate the casual lifestyle aesthetic that accelerated during the pandemic. From a product perspective, we are focused on introducing more hybrid and athleisure styles that appeal to today's consumer, who places a premium on versatility and comfort. Our success in these categories is most evident on our websites. Nunn Bush and Florsheim now derive more than half of their direct-to-consumer sales volume from true casual and hybrid footwear. Stacy Adams, our most dress-oriented brand, has also started to make inroads selling hybrid footwear. As we move forward, we expect all three brands to benefit from a more balanced product offering. Our Bogs business experienced a 33% decline for the quarter. As noted in previous quarters, the outdoor weather boot market has been affected by oversaturation of inventory and two relatively mild winters. Retailers have spent the last 18 months working to normalize their inventory levels, and we are now seeing early signs of renewed wholesale demand in the U.S. as retailers evaluate their upcoming inventory needs. We remain cautiously optimistic as we approach the key fall selling season. Our current focus for Bogs is to enhance the brand's presence in the work footwear category, which is a more year-round business. We're introducing lighter, insulated boots with seamless construction, suitable for use from September through May. These seamless construction boots offer more than twice the durability of traditional vulcanized boots and should serve as a significant differentiator as we expand our footprint in the farm and ag channel. Retail sales, which are generated mainly by our websites, were flat for the quarter. We are encountering a more price-sensitive, competitive environment. Nunn Bush and Stacy Adams experienced slight declines for the quarter, while Bogs and Florsheim had low single-digit increases. We continue to invest in our online platform and believe that there is considerable room for future growth in e-commerce sales. Sales at Florsheim Australia were down 23% for the quarter. Approximately half of the decrease was attributable to the closing of our Asia-Pacific business in late 2023. Australia's results were also impacted by the loss of a sizable wholesale customer, three fewer stores operating in the quarter compared to the same period last year, and a challenging environment at retail. Like their counterparts in the U.S., Australian consumers are facing inflationary pressures for basic, everyday necessities and housing, leading to reduced spending on discretionary items such as footwear and apparel. We are focused on controlling our costs while working to turn around both our Australian retail and wholesale businesses. Our overall inventory as of June 30, 2024, was $67.9 million, up from $62 million at March 31, 2024. As discussed in our last conference call, we are in the process of bringing up inventories to meet our fall needs and to support our at-once business. Our inventory is currently at a good level, and we are forecasting it to be slightly higher at the end of the third quarter. Our overall gross margins were 43.9% for the quarter, up from 43.3% last year. We feel our margins are 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. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will 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 compile the Q&A roster. Our first question comes from the line of David Wright of Henry Investment Trust. Your line is now open. Tom and Judy, good morning. Good morning. Good morning. Hey, congratulations on another great quarter. You continue to chug along, you know, and deliver, you know, results better than might be expected, given what you hear about the overall economy. So congratulations. Thank you. We appreciate it. Also, you know, thanks for having the call and the obvious effort that you put into, you know, drawing up the script and the information that you share. It is really appreciated. Well, we feel that it's something that we need to do for shareholders, but thanks for acknowledging it. I wanted to ask, it's kind of obvious on its face, but just so I'm not confused, what is at-once business? At-once business is business that comes in without having orders ahead from retailers. So most of the large retailers will give us orders for the future. So right now, we're out booking spring 2025, so we're getting orders for next spring. And then once we get into the season, retailers will give us their fill into their inventory if they haven't forecasted enough when they give us their orders. And especially in an environment like right now, where retailers still have in their memory the situation that they ran into in 2023, when they had quite a bit too much inventory, which was caused by all the supply chain issues. And so because of that, they're being very conservative when it comes to giving us future bookings. And so what that does is it means there's going to be more at-once business than there used to be. You know, it's kind of a trend, actually, where the retailers are... You know, we hope that trend doesn't go on forever, but right now, that is the trend, where retailers want us to have the inventory when they need it, instead of committing to it in the future. So what we mean by at-once business is just business that comes in without having orders ahead from retailers. This is John. Just want to add to that. A great example would be Bogs, where a lot of retailers kind of sit back and see what the weather's gonna do. And then if there's a lot of precipitation or, you know, or early winter, you get at-once business. And, you know, every fall, we get a fair amount of at-once business with Bogs, but we're more dependent on it than in previous years right now because the retail trade is being so conservative based on the last two mild winters. Okay, so it's sort of on-demand business, and you're trying to game how much might be coming in so that you can meet it just right? Exactly. And we have been pretty good at forecasting the needs of these retailers that are buying at once. And what we do is, it's kind of the 80/20 rule, where we do a lot of business on our twenty-- the 20% of best styles. And so what we do is we stock in extra inventory on those styles that we know we're gonna be able to use the inventory. It's not perishable, like some of the seasonal goods. And so that we're in a position to take advantage of this at-once business. And you know, the retailers really count on us to do that today. All right. In wholesale, you call out lower inventory costs, and I recall during the pandemic, freight was a big issue and was putting the cost of things up. You do mention freight costs in retail, but I wonder generally, is freight really still an issue? Freight costs have definitely come back down from their peak that was in 2022, was when we experienced the very high freight costs. However, in 2023, we were still experiencing those higher freight costs as we worked through the inventory that kinda had those higher freight costs attached. So, we're still anniversaring right now, when we look at 2024 compared to 2023, some higher freight costs last year that were kind of this hangover from 2022. But, freight costs normalized in by late 2023, so we should be starting to, you know, we're kind of down at this more normalized level, and it's been stable for some time. It's just when it kind of flows through our inventory. So you're working off the last of that, we'll call it, higher priced inventory? We worked it off last year, and now we're into the lower. Well, actually, you're correct. You're correct. We'll be anniversaring the higher cost inventory still until about October of this year. It really is impressive, these last few quarters. You just, you know, continue to be able to squeeze out a little better margin when one might be thinking that, you know, everything that could be done has been done. So, I hope you can keep finding some extra places to squeeze. My last question is gonna be on Bogs. And Tom, you mentioned obviously the mild winters, but I wonder, do you look at your Bogs sales historically, you know, for geographic? Has there been geographic concentration in where you are making most of the sales, and then you try to, like, correlate those geographies with what the weather was in the winter versus what the weather is in the winter? Obviously, up where you are, you know you're gonna get winter every year, but some other places, like the Mid-Atlantic, they sort of stop getting winter. You know, the Mid-Atlantic, the last few years, gets virtually no snow at all. So I'm curious geographically, how you look at Bogs. Yeah, no, we definitely look at it geographically. In the areas where we do the best in our high season, which is fall, are the areas that get more weather. Even last year in the Midwest, our snowfall was very light, and the temperatures were warm. So it's just the reality of the situation is we need to build product that's going to sell and be less dependent on the weather. That's why we're really focused on the farm and ag channel right now, which is a big channel and one that we're not that penetrated in, that sells footwear like Bogs that is used by people in a more functional way than, say, in a city where people are buying boots only when it snows. So you really wanna get that business that is more functional. What we're also trying to do is build lighter, insulated footwear so that it just is more appropriate in these milder winters. You know, we kind of have to assume that we're gonna see this continue because it's really been the pattern. You know, if you look over the last five or 10 years, we've had a lot of mild winters, and so we're trying to build product that will be appropriate and that will sell in those milder temperatures. Okay. Well, thanks so much for taking my questions, and continued good luck. Thanks for all your questions. Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. One moment for our next question. I am showing no further questions at this time. I would now like to turn the call over to Judy Anderson, Chief Financial Officer, for closing remarks. We just wanted to say thank you, everyone, for joining us today, and we hope you have a great day. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.