“Consumer demand for our brands remains healthy, and our gross margins are up significantly year-over-year despite some industry headwinds that are pressuring our top line. We experienced positive sell-through with many of our key accounts during the first quarter. Unfortunately, our Wholesale performance didn't translate into increased sell-in as many of our retail partners are in the process of working down elevated inventory levels and have recently adopted a more cautious approach to reorders due to the current economic backdrop”, commented Jason Brooks, Chairman, President and Chief Executive Officer.

First Quarter Results

In the first quarter of fiscal 2023, Rocky Brands posted a net sales decrease of 33.9% to 110.4 million US dollars from the same period last year.

By segment, the company's wholesale sales were down by 40.2% in the first three months of the year, totalling 80.1 million US dollars, while its retail sales increased by 3.1%, amounting to 29.5 million US dollars, on a comparable basis to the same months of 2022. Contract manufacturing sales also declined in this period to 0.9 million US dollars, as compared to 4.4 million US dollars in the prior year period; this was due to the expiration of certain contracts with the US military.

Rocky Brands' first quarter gross margin increased by 200 basis points to 39.6%, as compared to the gross margin of 37.6% recorded in a similar quarter of the previous year, thanks “to the realization of pricing actions taken in 2022, as well as decreases in in-bound logistics costs”.

In the quarter that ended on the 31^st of March, the company posted a net loss of 0.4 million US dollars, or minus 0.05 US dollars per diluted share, on a comparable basis to the net income of 7.3 million US dollars, or 0.99 US dollars per diluted share, registered in the same period of 2022.

Accordingly, its adjusted net loss was 0.8 million US dollars, or minus 0.12 US dollars per diluted share, as compared to an adjusted net income of 8.2 million US dollars, or 1.10 US dollars per diluted share, recorded in the first quarter last year.