“We continue to effectively navigate an unpredictable consumer environment thanks to our diversified brand portfolio and recently deployed cost saving initiatives. Strong double-digit gains in sales for our Durango and XTRATUF brands in both our wholesale and e-commerce channels helped offset softness in other areas of our business and generated low-single digit year-over-year recurring sales growth (…). We are encouraged with our recent results and look forward to delivering further growth over the near and long-term”, commented Jason Brooks, Chairman, President and Chief Executive Officer of Rocky Brands.

Second Quarter Results

In the second quarter of fiscal 2024, Rocky Brands reported net sales of 98.3 million US dollars, a decrease of 1.6% on a comparable basis to the same period of last year. However, excluding certain one-time sales in the prior year quarter, net sales increased by 6.1% over the second quarter of 2023.

The wholesale segment contributed 68.3 million US dollars to the company’s net sales in the period, a decrease of 4.5%, as compared to the same period last year, or an increase of 2.3% excluding the aforementioned one-time sales. Net sales from the retail segment generated 25.1 million US dollars, an increase of 4.1%, or 6.1% excluding the non-recurring sales related to the change in the Canada distribution model.

Meanwhile, contract manufacturing net sales reached 3.9 million US dollars, as compared to 3.3 million US dollars in the same period last year, or an increase of 2.6 million US dollars excluding the referred one-time sales.

In the second quarter of the current fiscal year, Rocky Brands’ gross margin increased by 110 basis points to 38.7% from 37.6% in the same quarter of the previous fiscal year, mainly “due to an increase of 200-basis points in wholesale gross margins” and “a higher percentage of retail net sales”, which have higher gross margins the other segments.

The company’s operating income in the second quarter more than doubled to 4.5 million US dollars, on a comparable basis to 2.2 million US dollars in the same period a year ago. However, adjusted operating income decreased to 5.2 million US dollars from 5.7 million US dollars in the second quarter of 2023.

In the three months ended in June, Rocky Brands recorded a net loss of 1.2 million US dollars, or a loss of 0.17 US dollars per diluted share, as compared to a net loss of 2.7 million US dollars, or a loss of 0.37 US dollars per diluted share, in the same period of 2023. Adjusted net income totalled 1.3 million US dollars, or 0.17 US dollars per diluted share, as compared to 0.0 million US dollars, or 0.00 US dollars per diluted share, in the same quarter of last year.

The US-based company also highlighted that inventories decreased by 20.0% and total debt decreased by 31.3% year-on-year.