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Mar 31, 2023
Rocky Brands Q1 2023 Earnings Report
Net sales decreased due to wholesale performance, while gross margins increased due to pricing actions and decreased logistics costs.
Key Takeaways
Rocky Brands reported a decrease in net sales by 33.9% to $110.4 million, primarily due to a decline in wholesale sales. However, gross margin increased by 200 basis points to 39.6%. The company experienced a net loss of $0.4 million, or $(0.05) per diluted share, compared to a net income of $7.3 million, or $0.99 per diluted share in the same quarter last year.
Net sales decreased 33.9% to $110.4 million.
Wholesale segment sales decreased 40.2%.
Gross margin increased 200 basis points to 39.6%.
Operating income was $4.2 million, or $4.9 million on an adjusted basis.
Revenue by Segment
Forward Guidance
The company is taking actions to reduce expenses and protect profitability in response to challenging market conditions. They expect to begin fulfilling orders for a three-year contract to produce combat boots for the U.S. Military in the fourth quarter of 2023.
Positive Outlook
- Consumer demand for brands remains healthy.
- Gross margins are up significantly year-over-year.
- Positive sell-through with key accounts during the first quarter.
- Generated over $2 million in annualized interest expense savings.
- Strength of brand portfolio positions the company to accelerate growth once the operating environment improves.
Challenges Ahead
- Wholesale performance didn’t translate into increased sell-in.
- Retail partners are working down elevated inventory levels.
- Retail partners have adopted a more cautious approach to reorders.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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