Good day ladies and gentlemen, and welcome to the Weyco Group Second Quarter 2016 Earnings Release Conference Call. My name is David, I’ll be your operator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference [Operator Instructions] And now, I would like to turn the call over to Mr. John Wittkowske, Chief Financial Officer. Please proceed sir.

Thank you David. Good morning everyone and welcome to Weyco Group’s second quarter conference call. On this call with me today are Tom Florsheim Jr., our Chairman and CEO; and John Florsheim, our President and COO. Before we begin to discuss the results for the quarter, I will read a brief disclaimer. During the course of 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 such statements are just predictions and that actual events or results may differ materially. We refer you to Weyco Group’s most recent Form 10-K that’s filed with the Securities and Exchange Commission. The form 10-K identifies important factors and risks that could cause the company’s actual results to differ materially from our projections. Additionally, some comparisons may refer to non-GAAP measures. Our SEC filings may contain additional information about these non-GAAP measures and why we use them. Our net sales for the second quarter of 2016 were $56.9 million, down 11% as compared with 2015 sales of $63.9 million. Operating earnings were $1.6 million for the quarter versus $3.3 million in 2015. Net earnings attributable to Weyco Group were $1 million this quarter as compared to $2 million in 2015. Diluted earnings per share were $0.09 in 2016 versus $0.19 in 2015. In the North American wholesale segment, net sales for the second quarter of 2016 were $41.5 million, down 14% as compared with $48.1 million in 2015. Sales were down across all of our brands. Our Stacy Adams, Nunn Bush, and Florsheim brands were all impacted by soft consumer spending in the footwear and apparel segments. Our BOGS brand has a large winter boot component and due to last year's mild winter…

Thanks, John and good morning. As John mentioned, sales in our North American wholesale segment were down 14% for the quarter. It was a tough quarter across the board for our brands. With our BOGS brand the loss resulted from a carryover of inventory by a retail accounts as a byproduct of last year's mild winter. Overall however, the retail environment was soft for two primary reasons, first consumer spending average cycled away from footwear and apparel and towards durables such automobiles and home goods, as well as increased expenditures and entertainment and travel. Second, the shift toward the e-commerce trade channel continues to accelerate creating an uncertain landscape for many of our brick and mortar retail partners. We see the fall from both phenomenon as temporary. Retail cycles come and go and eventually people go out and invest in a new pair of shoes, while the shift in consumer buying patterns gas longer-term implications, we believe we are well positioned to grow our brands in whichever channel consumer choose to purchase footwear. After eight consecutive quarters, with strong quarter-over-quarter increases Stacy Adams had not ordered. Sales decreased 5% compared to last year, with the loss coming mainly from the apartment store and off-price channels. From a sell through perspective Stacy Adams remains one of the top performing brands in the men's non-athletic industry and we are confident that Stacy Adams will get back on a growth track in the near-term. Nunn Bush sales were down 17% compared to the second quarter year with large decrease in sales to department store and the off-price channel. Nunn Bush does a significant share of its business in the mid-tier department store channel, which is been hard hit with the rapid shift toward e-commerce sales. Department stores have reacted by lowering inventory model,…

[Operator Instructions] this comes from the line of Mitch Kummetz at B. Riley. Go ahead please.

Yes thanks for taking my questions. I have got like a handful so let me begin, I think in the press release you had mentioned that you are now expecting BOGS sales to be down 25% for the year, which implies a similar decline in the back half. And I know you just made some comments about your outlook around core inventory and being well positioned throughout ones orders assuming normal weather. I’m just curious in that outlook for BOGS, what are you assuming for weather, I’m guessing you are not assuming normal weather and any big at once business in the fourth quarter, but maybe you could help me out with that?

Hi thanks for your question its John.. We are conservative in terms of how we look at the back half, our backlog is down in terms of our open orders with customers, but we think there is a bit of an overreaction in the market. You get any type of normal weather, probably are going to be looking for boots. When you look at the projections out there, there is a buzz around [indiscernible] which should result in over weather and increased participation, but you can’t count on that. And so I think that there are some upside in our numbers, but it is weather dependant. So I think you are seeing the industry other numbers from other companies and the weather boot category is definitely due to softer first half this year, but we believe that it’s kind of temporary phenomenon and then it bounces back when you get a little bit of weather. There is a overreaction on the down side and there is some time an overreaction in the upside too.

Got it, and then in terms of retail inventory levels, clearly it seems like there are some excess inventory kind of coming through the second quarter retail and it impacted all of our brands, but it sounds like with your comments that you expect some improvement in your legacy brands going forward. I mean do you feel like inventory levels have improved kind of coming out of Q2 versus what they were in the quarter to give a little bit of confidence that there should be some modest improvement in the legacy business or how are you thinking about that?

I think that, what we saw in the second quarter was that one thing that retailers could control is their inventory levels. And because business was soft in second quarter, a lot of major retailers were very determined to come in on their plans at the end of their quarter and we saw people making pretty substantial adjustments, which cuts off the flow of the weekly EDI orders that we get or reduces those orders. We believe that as we move in, well we are into the third quarter, in the third and fourth quarter that’s going to be much more normalized, because those adjustments to the levels have taken place already. So now, things are going to be more business as usual. The caveat to that is some of the retailers have lower their plans slightly but that will not have the same impact as what we saw in the second quarter.

The other things just to add to that for whatever reason this year was the year of the e-commerce guys. If the e-commerce accounts decided they were going to focus a little bit more on turn and if previous years they said well we are going to have this huge increase, we are going to bring in inventory and you are ready for this increase. Now there is much more focus among the big e-commerce players up on turn. So if they broke it down their inventory, we experienced that in the first half to some degree. And so now if sales come through and they react just in time we are well positioned for that. So we should pick up, some pretty high sales I think in the back half in the e-commerce sector based upon what they did in there models in the first half.

Got it, may be two ask questions on your retails store, I know that in prior quarter you have talked about some challenging tourist traffic. Just kind of curious where that stands now, particularly as it relates to Brexit and kind what that’s done to some currencies particularly the pound and even the Euro?

Yes. I think that we’ve seen tourist traffic stabilize to some degree and a lot of our business, we have a concentration of stores in the Miami area and lot of that business is actually more Central and South American and then European and those currencies have come back a little bit this year which I think is helping. And so I would say in general, we've seen that stabilized we have not experienced any kind of like major affect from Brexit, I mean mostly that would affect our [Madison Avenue] (Ph) store I think and we really have yet not seen that.

Okay and then last question. I know that the Florsheim Australia gross margins have been challenged because of currency and we have seen some improvement in the Australian dollar. I think that from a year-over-year standpoint, some of the comparison there start to look more favorable as soon as this third quarter, does that help the margins in that business right away or does it take a while for that to flow through. Can you just kind of walk into that?

Mitch I think you are right and we have actually in our minds thought that same thing that in the second half of the year both in Canada and Australia, particularly Canada I think the comparisons are going to be - there won’t be the impact on year-over-year basis on the margin. On a competitive basis, it is what it is. There isn’t going to be that it was lower this year or higher last year. And I think that’s going to be the case in Australia as well, so I do think there will be a little bit of favorable - vis-à-vis the first quarter where we said these are Canada margins really dragged us down, because of the exchange rate, which they did. That won't be the case really in the third and fourth quarter on a straight comparison. But one late benefit we had last year that we don’t have this year is we did do some hedging last year in Canada and we had some favorable hedges, because the year prior had gone out. So we won't get the benefit of those which will have a slight impact on the margins in second half. But on a straight peer forget the hedging standpoint, yes I think they will be comparable year-over-year without exchange impact.

Got it, okay. All right that’s all I had. I appreciate you guys time and good luck on the quarter.

Thank you.

Thank you.

[Operator Instructions] there are no further questions coming through. So I would now like to turn the call back to Mr. John Wittkowske for closing remarks.

Just want to thank you for joining us on our conference call and we will talk to you at the third quarter. Have a great day.

Thank you for your participation in today's conference call. This concludes the presentation and you may now disconnect. Good day.