John Wittkowske - Senior Vice President, Chief Financial Officer and Secretary Thomas Florsheim - Chairman and Chief Executive Officer

Welcome to the Second Quarter 2018 Earnings Release Conference Call. My name is James, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Also note this conference is being recorded. I now like to turn our call over to John Wittkowske, Chief Financial Officer. John, you may begin.

Thank you. Good morning, everyone. 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 Chief Operating Officer. 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 as filed with the Securities and Exchange Commission. The 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 decided to use them. Our net sales for the second quarter of 2018 were $60.9 million, up 6% compared to 2017 net sales of $57.5 million. Operating earnings were flat at $1.9 million in both second quarters of 2018 and 2017. Net earnings attributable to Weyco Group are $1.6 million for the quarter, up 29% from $1.3 million. Net earnings were positively impacted by the lower U.S. federal tax rate of 21% in 2018, compared to 35% in 2017. Diluted earnings per share were $0.15 this quarter and $0.12 per share last year. In the North American wholesale segment, net sales for the quarter were $45.6 million, up 8% compared to $42.3 million in 2017. Licensing revenues were $472,000 this quarter and $591,000 last year. Wholesale gross earnings were 33.3% of net sales in the second quarter of 2018…

Thanks and good morning, everyone. As John mentioned, sales in our North American wholesale segment grew up 8% for the quarter. We feel very good about the performance of our wholesale business. While the retail market in apparel and footwear is stabilizing comparison to same period last year. Growth in this sector has been largely confined to the product segment. Given that context, our 8% growth reflects a nice pickup in market share in the men's dress casual and dress footwear segments. Sales of Florsheim were up 30% this quarter. Florsheim accomplish this growth by having a range of compelling new products at retail that appeal to both the basic customer and the customer who seeks to be more on trend. Our retail partners increasingly see Florsheim is not only a ready solution to cover their needs in the dress shoe market, but also as an evolving brand that is creatively tapping into the consumer's desire to have versatile footwear that can be worn across a variety of occasions. We believe this momentum has given Florsheim the credibility to move the brand more casual, which is an important long term goal. Nunn Bush sales were up 4%. We're pleased to get back on our growth path with Nunn Bush's brand sales have been impacted by the decline in the mid-tier department store sales. The increase was driven largely by growth in the e-commerce segment, but we also saw a slight increase with department stores, reflecting a stabilization of the Nunn Bush business in that channel. We believe we have a strong new product story in Nunn Bush as we head into fall and are focused on achieving sales growth for the back half of 2018. BOGS sales are up 6% for the quarter. The second quarter is a small vibe…

[Operator Instructions] And it looks like we have no questions. : :

All right, we thank everybody for listening and we will talk to you next quarter. Have a great day.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.