Thank you for standing by. At this time, I would like to welcome everyone to Weyco Group Third Quarter 2025 Earnings 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 this time, simply press star followed by the number one on your telephone keypad. I would now like to turn the conference over to Judy Anderson, Chief Financial Officer. You may begin. Thank you. Good morning and welcome to Weyco Group's conference call to discuss Third Quarter 2025 results. On the call with me today are Thomas 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 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 US T rade 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 slowdown or contraction in the U.S. or Australian economy. Overall net sales for the Third Quarter of 2025 were $73.1 million, down 2% compared to $74.3 million in the Third Quarter of 2024. Consolidated gross earnings were 40.7% of net sales compared to 44.3% of net sales in last year's Third Quarter. Earnings from operations were $8.1 million for the quarter, down 21% from $10.2 million in the Third Quarter of 2024. Net earnings totaled $6.6 million for the quarter, down 18% from $8.1 million last year. Diluted earnings per share were $0.69 per share in the Third Quarter of 2025 and $0.84 per share in last year's third quarter. Net sales in our North American wholesale segment totaled $60.2 million for the quarter, down 2% from $61.1 million last year. Sales volumes were down 7% for the quarter, but the selling price increase instituted on July 1st, 2025, helped mitigate the impact of the volume decline. The decrease in volume was primarily due to reduced business with a large wholesale customer who failed to timely adopt our new pricing structure, resulting in order cancellations during the period. This issue has since been resolved and is not expected to significantly impact the fourth quarter. Wholesale gross earnings as a percentage of net sales were 35.7% and 40.1% in the Third Quarters of 2025 and 2024, respectively. Gross margins were negatively impacted by the effects of Incremental Tariffs. Although selling price increases helped mitigate the effect of these tariffs, they did not fully offset the costs, leading to the margin erosion for the period. Wholesale selling and administrative expenses totaled $14 million for the quarter and $15.1 million last year. The decrease was primarily due to lower employee costs. As a percentage of net sales, wholesale selling and administrative expenses were 23% and 25% in the Third Quarters of 2025 and 2024, respectively. Wholesale operating earnings totaled $7.5 million for the quarter, down 20% from $9.4 million in 2024 due to lower sales volume and margin erosion. Earlier this year, the U.S. government enacted reciprocal and retaliatory tariffs, collectively referred to as Incremental Tariffs, on goods imported into the United States. The incremental tariff on goods sourced from China, where most of our products originate, remained at 30% throughout the Third Quarter of 2025. This tariff rate is set to be reevaluated on or before November 10th, 2025. The Incremental Tariffs on goods sourced from other countries, excluding China, ranged from 10%-50% throughout the Third Quarter of 2025. US Trade and Tariff Policies currently remain fluid and unpredictable, and the specific tariff rates applicable to goods imported by our companies continue to evolve. As such, there is significant ongoing uncertainty regarding the potential near-term impact of Incremental Tariffs on our gross margins. We have implemented various mitigation strategies and remain committed to adopting further strategies, including shifting our sourcing in alignment with evolving tariff policies, optimizing our pricing structure, and enhancing operational efficiencies as needed in response to future policy developments. Net sales in our North American Retail Segment were $7 million for the quarter, down 4% from $7.2 million in 2024. The decrease was primarily due to softer demand on the Florsheim and Stacy Adams websites amid the tepid retail environment. Retail gross earnings as a percentage of net sales were 66.4% and 66.9% in the Third Quarters of 2025 and 2024, respectively. Retail operating earnings totaled $600,000 for the quarter versus $800,000 in last year's Third Quarter. The decrease was primarily due to lower sales volume. Our other operations consist of our retail and wholesale businesses primarily based in Australia, with a limited presence in South Africa, collectively referred to as Florsheim Australia. Net sales of Florsheim Australia remained flat at $6 million in both the Third Quarters of 2025 and 2024. In local currency, Florsheim Australia's net sales were up 2% for the quarter, driven by growth in its retail businesses. Florsheim Australia's gross earnings as a percentage of net sales were 61% and 59.2% in the Third Quarters of 2025 and 2024, respectively. Florsheim Australia generated operating losses totaling $100,000 for the quarter and break-even results for the third quarter last year. At September 30, 2025, our cash and marketable securities totaled $78.5 million, and we had no debt outstanding on our $40 million Revolving Line of Credit. During the first nine months of 2025, we generated $13.2 million in cash from operations and used funds to pay $7.7 million in D ividends. We also repurchased $4.1 million of company stock and had $900,000 of capital expenditures. We estimate that 2025 annual capital expenditures will be between $1 million and $3 million. On November 4th, 2025, our Board of Directors declared a quarterly cash dividend of $0.27 per share to shareholders of record on November 17th, 2025, payable January 9th, 2026. Additionally, on November 4th, 2025, our Board of Directors declared a Special Cash Dividend of $2 per share to all shareholders of record on November 17th, 2025, payable January 9th, 2026. I would now like to turn the call over to Thomas Florsheim Jr., Chairman and CEO. Thanks, Judy, and good morning, everyone. Excuse me. Overall, company wholesale sales were down 2% in dollars and 7% in unit volume during the third quarter. We raised prices by 10% on July 1 to offset tariff increases. While shipments were down slightly, we were encouraged by the relative strength of our brands at retail following those price increases. In what remains a difficult market, our brands, especially our legacy business, performed well. Even so, the unsettled tariff environment, along with weak consumer sentiment and the cautious approach retailers are taking toward inventory investment, continues to create midterm challenges. We continue to diversify our factory base to reduce our manufacturing concentration in China while maintaining strong relationships with our longstanding partners there, who have been instrumental to Weyco's reputation for quality and value. Expanding our factory base is not a quick process, and we are very deliberate about partnering only with factories that share a commitment to quality and on-time delivery. As we navigate the uncertainties in this economic environment, we remain confident in the strength of our brands and the resilience of our business model. Sales of our combined legacy business were up 3% despite a 3% decline in unit volume. Florsheim was the standout brand, with sales up 8% for the quarter. Florsheim continues to be a bright spot in men's non-athletic footwear for two reasons. First, it has become the go-to brand for traditional dress and dress casual footwear priced under $150. While this segment has shrunk with the trend toward more casual lifestyles, it remains an important part of the market that retailers rely on to meet consumer demand for work and occasion-based styles. Florsheim is gaining shelf space as a bridged brand that offers premium quality at a reasonable price. Second, the brand has expanded its presence in hybrid footwear and dress sneakers with good success. The Florsheim DNA fits well in the refined casual category, which remains a key focus for growth. Our Nunn Bush business was up 1% and continued to show good momentum at retail. With pricing pressures across the industry, Nunn Bush is positioned as a branded value alternative in the comfort casual and traditional dress casual segments as competitors exit the under $80 price point. We continue to invest in comfort technology platforms that differentiate Nunn Bush from private label options and allow it to compete effectively against higher-priced brands. Stacy Adams was down 5% for the quarter. It remains the leader in accessible, elevated dress footwear with exceptional brand loyalty among style-driven consumers. We're focused on expanding its casual offerings that capture the same refined aesthetic. While we're seeing some success, we'll need to grow this segment further to get Stacy Adams back on a growth track. The Bogs business remains challenging, with a 17% decline for the quarter. The category became oversaturated after the pandemic, and mild winters in recent years have made many retailers more cautious, waiting to fund weather boot purchases closer to the season. As a result, Bogs is now more dependent on fourth quarter cold and precipitation to drive sales. Our focus is on innovation and diversifying away from the winter weather dependence. We believe our seamless construction, with its durability and lightweight feel, gives us a real competitive edge in the marketplace. While we're making progress with less insulated and non-insulated footwear, that diversification will take time to materially impact sales. During the quarter, we made the strategic decision to wind down operations of the Forsake brand due to a sustained lack of growth and profitability. This decision is part of our ongoing effort to optimize our brand portfolio and focus on those brands with the greatest potential for long-term success. The closure of Forsake is not expected to have a material impact on our consolidated financials. Net sales in our retail segment were down 4% for the quarter, driven by a decline in e-commerce sales. We've seen increased price sensitivity from consumers in comparison to last year as more consumers are choosing items at lower prices. We also believe we're losing some sales to our wholesale partners' e-commerce sites since our own sites are often priced at full MSRP, while some partners promote our brands more aggressively. The pricing gap widened when we raised retail price points by 10% on July 1st, while our wholesale customers phased in the increase more gradually. This situation should level out over time, but we recognize that consumers with limited discretionary spending will continue to shop around for the best prices across our brands. Florsheim Australia's net sales were flat for the quarter, but up 2% local currency. Our Florsheim Australia business, which includes the South African and Pacific Rim markets, remains a work in progress from a profitability standpoint. We're encouraged by the increase in same-store sales during the quarter, but we still need to grow our wholesale business to reach our Profitability Targets. Our overall inventory as of September 30th, 2025, was $67.2 million, compared to $74 million at December 31st, 2024. We are at a good inventory level as we move into the fourth quarter. Our overall gross margins were 40.7% for the quarter. Last year, they were 44.3%. Our wholesale margins were negatively impacted by the Incremental Tariffs. We took a conservative approach to price increases because we want to maintain our Market Share, and we do not know where the tariffs are going to land from China or India. While we are encouraged by recent trade talks between the U.S. and China, we still consider the situation to be volatile and uncertain. As we gain more clarity, we will continue to mitigate the impact of Incremental Tariffs by shifting our supply chain and assessing the need for additional price increases or the implementation of other strategies. As Judy mentioned, yesterday, our Board of Directors declared a Special Cash Dividend. Over the past few years, we've built up cash in excess of what we need to fund operations and capital expenditures. Looking to the future, we anticipate that our strong Balance Sheet and Liquidity will allow us to fund Organic Growth and pursue future Strategic Opportunities as they arise. Therefore, we are returning capital to our shareholders in the form of a Special Cash Dividend, alongside our other annual quarterly dividend. 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 will need to press star then the number one on your telephone keypad. If you would like to withdraw your question, press star one again. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of David Wright with Henry Investment Trust. Your line is open. Hi, David. David, your line is open. Can you hear me? Yeah, we can. No, we can hear you. Okay. Okay. I didn't know what the operator was doing for. Thanks for the special dividend. That's excellent. I applaud the continued efforts at capital management. Thomas, do you have any sense on, in the last quarter, how much of the margin deterioration is attributable to tariffs? Do you try to look at it that way? Yes. I would say, and I am going to have Judy voice it on this as well. It is 100%, basically, of our margin erosion. I mean, we raised prices 10%. But the incremental duties out of China have been at 30%. And it does not cover—we did not raise prices enough, I guess, to cover the cost of the Incremental Tariffs. We did that intentionally. Because, as we mentioned, we really want to maintain market share. We do not want to go too fast with price increases until we see where all these tariffs are going to land. India started out—now, the tariffs changed a lot, but I cannot remember where they started out—10% or 20%, and then the administration added an extra 50%. We had been moving product to India from China. David, it has been a pretty crazy six months. We are pleased with our results, with all of this going on. We think that we are doing the right things for the long-term health of the business as far as maintaining market share and reasonable profitability. We know that with the margin erosion, we are not going to be as profitable as we have been the last couple of years, but we think that we are better off kind of taking time and seeing where everything lands. Okay. There's been increasing commentary in the general business press lately about the upper end of the consumer carrying the economy and the lower end cutting back. I don't know if you dice your customer base to that extent, but if you do, do you have any sense of— Do you see one region or one wholesale customer, one demographic remaining stronger relative to another? This is John. It's hard to parse it. I mean, we see certain retailers that have more customers from the lower middle-income strata. I think those customers are challenged right now. Just in terms of seeing their performance. When you look at our brands, I think Florsheim attracts a slightly higher-income customer. Our business with Florsheim is very strong right now. Stacy Adams and Nunn Bush are more of a value customer. I think that we're seeing a bit of that drag on those two brands. Okay. So you're kind of seeing the same thing that other companies are commenting on, and I appreciate the answer there. Great. Those are my questions. I commend you for the continued great quarterly call. The comprehensive review that Judy gives, it's all good. Thank you very much. Thanks, David. Have a good day. Thanks.