Thank you for standing by. My name is Gayle, and I will be your operator for today. At this time, I would like to welcome each and every one of you to the Weyco Group, Inc First Quarter 2025 Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, kindly press star one again. It is now my pleasure to turn today's call over to Weyco Group CFO Judy Anderson. Please go ahead. Thank you. Good morning and welcome to Weyco Group's conference call to discuss first quarter 2025 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 impacts of U.S. trade and tariff policies, which remain highly dynamic and unpredictable. The 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 first quarter of 2025 were $68 million, down 5% compared to $71.6 million in the first quarter of 2024. In the first quarter of 2024, consolidated gross earnings were 44.6% of net sales for the quarter compared to 44.7% of net sales in last year's first quarter. Operating earnings totaled $7 million, down 15% from $8.3 million in the first quarter of 2024. Net earnings were $5.5 million, or $0.57 per diluted share, for the current quarter versus $6.7 million, or $0.69 per diluted share, in the first quarter of last year. In the North American wholesale segment, net sales were $54.3 million for the quarter, down 4% compared to $56.2 million last year. Higher sales of our Florsheim brand were more than offset by lower sales of our other major brands. Wholesale gross earnings were 39.4% of net sales compared to 39.6% of net sales in last year's first quarter. Wholesale selling and administrative expenses totaled $14.8 million for the quarter and $14.9 million last year. As a percent of net sales, wholesale selling and administrative expenses were flat at 27% in both 2025 and 2024. Wholesale operating earnings decreased 10% to $6.6 million for the quarter, from $7.4 million in 2024 due to lower sales. Net sales in our North American retail segment were $8.7 million for the quarter, down 12% from record sales of $9.8 million in 2024. The decrease resulted mainly from lower sales on the BOGS website due to reduced promotional activities in 2025 compared to strong BOGS website sales in the first quarter of last year. Retail gross earnings as a percent of net sales were 66.6% and 65.3% in the first quarters of 2025 and 2024, respectively. Retail operating earnings totaled $600,000 for the quarter, down 52% from $1.3 million last year. The decrease was primarily due to lower sales. Our other operations historically include 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 completed the wind-down of that business in 2024. Accordingly, first quarter 2025 results of the other category only reflect the operations of Australia and South Africa. Florsheim Australia's net sales were $5.1 million, down 7% from $5.5 million in the first quarter of 2024. The weaker Australian dollar relative to the U.S. dollar contributed to this decrease. In local currency, Florsheim Australia's net sales were down 3% due mainly to the closing of Asia-Pacific, partially offset by higher sales in Australia. Net sales in Australia were up 6% in local currency, with higher sales in both its wholesale and retail businesses. Florsheim Australia's gross earnings as a percent of net sales were 62.7% and 60.2% in the first quarters of 2025 and 2024, respectively. Florsheim Australia generated operating losses totaling $200,000 for the quarter and $400,000 last year. The improvement was due to higher sales in Australia. Over the last several weeks, the U.S. Government enacted a broad range of reciprocal and retaliatory tariffs, collectively referred to as incremental tariffs, on goods imported into the United States. Including these incremental tariffs, the current effective total tariff rate on goods sourced from China, which is where we source a majority of our products, is 161%, up from 16% in 2024. While the incremental tariffs did not impact our first quarter 2025 performance, unless withdrawn, these tariffs will significantly increase our cost of goods sold in future periods. To mitigate the impact of tariff cost increases, we have negotiated cost reductions with several of our Chinese suppliers and are planning to raise selling prices beginning in summer of 2025. We are also accelerating our efforts to diversify our sourcing. At December 31, 2025, our cash and marketable securities totaled $77.9 million, and we had no debt outstanding on our $40 million revolving line of credit. During the first three months of 2025, we generated $4.1 million of cash from operations. We used funds to pay $2.5 million in dividends and repurchased $700,000 of our common stock during the period. Additionally, pre-funded dividends of $21.6 million were paid to shareholders in January of 2025. We also had $400,000 of capital expenditures during the quarter. We estimate that 2025 annual capital expenditures will be between $1 million-$2 million. On May 6, 2025, our Board of Directors declared a cash dividend of $0.27 per share to all shareholders of record on May 16th, 2025, payable June 30th, 2025. This represents an increase of 4% above the previous quarterly dividend rate of $0.26. I would now like to turn the call over to Tom Florsheim Jr., Chairman and CEO. Thanks, Judy. Good morning, everyone. Our overall net sales were down 5% for the quarter. We began the year facing significant geopolitical and macroeconomic uncertainties, which include evolving U.S. trade policies, recession concerns, and market volatility. These factors have affected both consumer and retailer confidence, resulting in declines in our wholesale and direct-to-consumer businesses. BOGS sales declined 5% for the quarter. On a positive note, we saw more typical winter weather in January and February, with cold temperatures and precipitation across much of the country. This helped our BOGS retailers work through existing inventory, which we expect will create opportunities for new product in the second quarter and the second half of the year. As mentioned in previous calls, we remain very bullish on our innovative seamless construction, which is lighter and more durable than comparable vulcanized products currently in the market. We are also excited about new spring products like the Boga Clog, which has arrived at retail and is off to a solid start. Our combined legacy business was down 3% in the first quarter, with Florsheim up 7%, Stacy Adams down 7%, and Nunn Bush down 16%. The declines in Nunn Bush and Stacy Adams reflect the current softness in non-athletic footwear retail as consumers remain cautious with their discretionary spending. In tandem with this, many of our wholesale partners are maintaining conservative inventory positions, which has impacted our shipments. In light of this challenging environment, Florsheim's performance was particularly strong. The brand continues to gain market share with robust sales across a range of categories, including hybrid, refined casual footwear, which we view as a significant growth opportunity going forward. Net sales in our retail segment were down 12% for the quarter. Last year, we drove significant e-commerce volume through promotions, particularly with BOGS, due to elevated inventory levels. In 2025, our inventory is more aligned with demand, and we've scaled back promotional activity, which has contributed to the decline in sales. That said, we continue to invest in data-driven tools to position our e-commerce business for long-term growth. Florsheim Australia's net sales declined 7% for the quarter, or 3% in local currency. Similar to the U.S., Florsheim Australia's markets, which include South Africa, New Zealand, and the Pacific Rim, are facing economic headwinds. Despite the challenging environment, we are encouraged by the improvement in Florsheim Australia's first quarter operating results, as well as an 11% increase in same-store retail sales. We remain focused on managing expenses and identifying opportunities for profitable growth. Our overall inventory as of March 31st, 2025, was $68.2 million, compared to $74 million at the end of December 2024, and $62 million at March 31st, 2024. While our inventory levels are down from year-end, they are higher than normal for this time of year, as we were proactive in expediting a large amount of inventory before the incremental tariffs went into effect. This put us in a good inventory position such that we were able to temporarily halt our China imports during this tumultuous period as we evaluate plans to mitigate the anticipated future impact of the tariff cost increases. Our overall gross margins were 44.6% for the quarter and 44.7% last year. Excuse me. Given the uncertainty around tariffs, we cannot predict their impact on our margins. We are closely monitoring the situation and are also expecting to increase our prices. Despite the tariff-related uncertainties we face, we are confident in our abilities to successfully manage the situation. Our history of strong operational execution, particularly in the management of our supply chain and price-setting strategy, underscores our proven ability to withstand a turbulent environment. We are hopeful that in overcoming these challenges, we will be able to pick up additional market share in the long run. 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. this time, I would like to remind everyone that in order to ask a question, please press star, then the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Again, if you would like to ask a question, press star, then the number one on your telephone keypad. Okay, so your first question comes from the line of John Leister. Please go ahead. Hi, good morning. I just have a quick question on the pausing of the imports from China. I think China is like 75% of your imports, and I was just curious, how long can you keep that pause on before it starts to impact your inventories and ability to deliver for customers? Yeah, I think that's a good question. I think that we are covered through part of the third quarter, but we're going to start to run into inventory issues at that point. Meanwhile, what we're doing is we're continuing to manufacture in China, so we haven't stopped our manufacturing. What we're doing is we're shipping to—we have a distribution center in Montreal, and we're continuing to ship shoes from China to Montreal, where we're holding them. They are about a week away from our distribution center here in Milwaukee, Wisconsin. As soon as things thaw, which we're hoping—we don't know, obviously, but we hope it happens over the next couple of months—we're to be in a position to bring inventory into Milwaukee, our main distribution center, within a week. The other thing that we're doing is we have been working nonstop, really, since fall of last year to source our shoes in other countries. You're going to see over the next 12 months a pretty radical reorganizing of our supply chain so that we have much less exposure in China. You're going to see shoes this fall start to come in from some of these other places. We are really taking a very aggressive approach on reordering our supply chain. We're fortunate because we have experience in many of these other countries, such as Cambodia, Vietnam, and India. We feel that we can move fairly quickly, mindful of not sacrificing the quality of our product. That's a little bit of a long answer to your question, but hopefully that gives you what you're looking for. Okay. That's helpful, Tom. Back to Montreal. You're shipping to Montreal and holding inventory there and hoping that, what, tariffs come down on imports from Montreal or you can? No. No. No. Because the way this works is when you bring the footwear into Montreal, you pay the Canadian duty. If and when the tariffs come down between China and the U.S., we take those goods that are staged in Montreal, and we bring them into Milwaukee. At that time, we pay the prevailing tariff between China and the U.S. Say the tariffs go down to 30%, something a more reasonable level, we get the duty back from Canada. There is a mechanism called duty drawback where you get the duty back if you ship out of the country. We get the duty back that we have paid bringing in the goods to Canada, and then we will pay the additional 30% on top of the normal duties when we bring the goods into the U.S. At the current rate of + 145%, it is just totally unmanageable. There's a little bit of a bet there that the tariffs will come down in the short term. What we've done just to be safe is we're focusing on continuing to manufacture shoes that we know are styles that will be good for a year or longer. We're not continuing to manufacture seasonal-type goods or in-and-out-type goods. If this takes longer than we hope, we're going to still be able to bring the inventory either down in the U.S. or we have a fairly large business in Canada. We'll be able to sell it off in Canada. Okay. That's helpful. What's the duty going into Canada right now? It's 19%. They just have a flat 19% on all footwear. Their duty structure is actually much less complicated than the U.S., where you've got a lot of different duty categories. Bringing shoes out of the U.S., you've got leather shoes at one duty rate, one tariff rate. You've got PU upper shoes at a different one. You've got certain constructions of boots at another one. It is much more complicated in the U.S., but the main number to focus on is what the additional duty is, which is currently 145%. Right. Okay. All right. So you might have to carry additional inventory in Canada for a while until the Chinese duties come down. Exactly. Yeah. Okay. All right. Good. That's helpful. Appreciate that. All right. Thank you. Once again, I would like to remind everyone that if you would like to ask a question, press star one on your telephone keypad. All right. Thank you, everyone. That concludes our Q&A session for today. I will now turn the call over back to Judy Anderson for closing remarks. Thank you so much. Please go ahead. Thank you, everyone, for joining us today. Have a great day. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect. Have a nice day ahead.