WEYCO GROUP INC Revenue Disclosure

Revenue Recognition – Our revenue contracts contain a single performance obligation to deliver our products to our customers. Revenue is recorded at the point in time at which control of the product is transferred to the customer in an amount that reflects the consideration we expect to receive in exchange for our products. Wholesale revenue is generally recognized upon shipment of the product, as that is when the customer obtains control of the promised goods. Shipping and handling activities that occur after control of the product transfers to the customer are treated as fulfillment activities, not as a separate performance obligation. Retail revenue is generated primarily from the sale of footwear to customers through our websites and at retail locations.  For sales made through our websites, revenue is recognized upon shipment to the customer.  For in-store sales, we recognize revenue at point of sale. Sales taxes collected from website or retail sales are excluded from our reported net sales. Revenue from third-party licensing agreements is recognized at the point in time when the licensee sells the related products to end customers. Licensing revenues were $1.7 million in 2025 and $2.0 million in 2024. See Note 17.

All revenue is recorded net of estimated allowances for returns and discounts; these revenue offsets are accrued for at the time of sale. Our estimates of allowances for returns and discounts are based on such factors as specific customer situations, historical experience, and current and expected economic conditions. We also provide cooperative advertising allowances to certain customers. In 2025, these amounts were recorded as a reduction of revenue when the related sales occurred. We regularly evaluate sales reserves and our estimation processes and adjust when appropriate.

Generally, payments from Wholesale customers are received within 90 days following the sale. Payments from Retail customers are received at the point of sale. Our contracts with customers do not have significant financing components or significant prepayment terms, and there is no non-cash consideration. We do not have unbilled revenue or contract assets, and contract liabilities are immaterial.