Good day, and thank you for standing by. Welcome to the Weyco Group Second Quarter 2023 Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Judy Anderson. Please go ahead.

Good morning, everyone, and welcome to Weyco Group's conference call to discuss second quarter 2023 results. On the call with me today are Tom Florsheim, Jr., our 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 2023 were $67 million, down 10% compared to record sales of $74.4 million in 2022. Consolidated gross earnings increased 43.3% of net sales -- increased to 43.3% of net sales compared to 40% of net sales in last year's second quarter, due mainly to higher gross margins in our North American wholesale segment. Earnings from operations rose 18% to $6.7 million from $5.7 million in the second quarter of 2022. Net earnings were a second quarter record of $4.9 million or $0.50 per diluted share, up 8% over our previous record of $4.5 million or $0.47 per diluted share, last year. Net sales in…

Thanks, Judy, and good morning, everyone. After an outstanding 2022 during which our sales were lifted to record levels by a combination of post-pandemic retailer pipeline fill as well as strong consumer demand, 2023 represents a return to the footwear industry's normal cyclical challenges. We are seeing consumer discretionary purchases shift away for products like footwear and apparel and more towards exponential expenditures like travel and dining out. As such, previously elevated footwear sales returned to historical norms and our accounts have become much more cautious as far as their inventory levels. This trend is reflected in our shipments in the second quarter across all our major brands. In terms of our legacy business, Florsheim sales were down 11%, Stacy Adams was down 17% and Nunn Bush was down 1%. All three brands were up against significant increases in the second quarter of 2022, and the shipment decrease is indicative of the overall slowdown in the industry. We believe our legacy business remains healthy. Sell-throughs for Florsheim, Stacy Adams and Nunn Bush are tracking slightly above levels seen prior to the pandemic and we feel good about the strong position we have in the refined footwear market. Our focus for our legacy brands is threefold. First, maintain our leadership position in the dress footwear market through superior product and value. Second, continue to develop new products that fit evolving consumer preferences, while we have benefited from renewed interest in dress footwear over the last two years, we are well aware that we need to continue to diversify our product assortment. Florsheim, and especially Nunn Bush, have made good progress in terms of increasing the percent of casual sales. Meanwhile, all three brands have been growing hybrid footwear as an important part of their mix. Our third and final area of…

I'd just like to say thank you everyone for joining us, and have a good day.

The conference is now over. You may now disconnect.