“For the second quarter in a row, our sell-through performance at several of our major wholesale accounts outpaced sell-in as retailers continue to work on aligning overall inventory levels with the current market environment. Consumer response to our brand portfolio remains solid with strong full price selling and recent price increases helping drive a 440-basis point improvement in gross margin. While our year-to-date results were more challenging than anticipated due in part to ongoing industry headwinds, we believe our business is positioned for improvement over the remainder of 2023 based on consumer demand for our products, our current order book and recent conversations with key wholesale partners about their plans for the second half of the year”, commented Jason Brooks, Chairman, President and Chief Executive Officer of Rocky Brands.

Second Quarter Results

In the second quarter of the current fiscal year, the company's net sales fell by 38.4%, totalling 99.8 million US dollars, on a comparable basis to the same period of the previous year. This decline was mainly driven by the performance of the wholesale channel, whose net sales declined by 45.5% to 71.5 million US dollars, as compared to the same quarter of 2022.

Meanwhile, in the same period, Rocky Brands' retail sales decreased by 3.6%, year-over-year, amounting to 25.1 million US dollars, while its contract manufacturing segment sales declined to 3.3 million US dollars from 4.9 million US dollars in the same period of the prior year due to the expiration of some contracts with the US military.

The company’s second quarter gross margin grew by 440 basis points to 37.6%, on a comparable basis to a similar period of last year, thanks to the realization of price increases, lower logistic costs and a “higher mix of retail segment sales, which carry higher gross margins than the Wholesale and Contract Manufacturing segments”.

In the three months to the 30^th of June, Rocky Brands posted a net loss of 2.7 million US dollars, or 0.37 US dollars per diluted share, as compared to the net income of 0.9 million US dollars, or 0.12 US dollars per diluted share registered in the same period of 2022. 

Furthermore, its adjusted net income was 0.0 million US dollars, or 0.00 US dollars per diluted share, on a comparable basis to the adjusted net income of 2.5 million US dollars, or 0.34 US dollars per diluted share in the same year-ago period.