Rocky Brands Inc. reported earnings on an adjusted basis grew 33.4 percent in the third quarter, boosted by healthy full-price selling, pricing actions and a 7 percent revenue gain. Revenue gains were led by Xtratuf but solid performances were also seen by other work and outdoor brands, including Georgia Boot, The Original Muck Boot Company and Rocky.

Third Quarter 2025 Overview

  • Net sales increased 7.0 percent to $122.5 million versus the year-ago quarter
  • Gross margin increased 210-basis points to 40.2 percent of net sales compared to 38.1 percent of net sales in the year-ago quarter
  • Income from operations increased 16.5 percent to $11.7 million compared to $10.1 million in the year-ago quarter
  • Net income increased 36.6 percent to $7.2 million, or $0.96 per diluted share, as compared to net income of $5.3 million, or $0.70 per diluted share, in the year-ago quarter
  • Adjusted net income increased 33.4 percent to $7.8 million, or $1.03 per diluted share, as compared to $5.8 million, or $0.77 per diluted share, in the year-ago quarter
  • Inventories as of September 30, 2025 increased 12.7 percent compared to September 30, 2024
  • Total debt as of September 30, 2025, decreased 7.5 percent compared with September 30, 2024

“We delivered another quarter of solid results amidst a challenging operating environment,” said Jason Brooks, chairman, president and chief executive officer. “The improvement in our top-line was led by Xtratuf as demand for the brand remains strong across our wholesale and e-commerce channels, combined with solid growth in our other work and outdoor brands including Georgia Boot, The Original Muck Boot company and Rocky. At the same time, strong full price selling, select price increases implemented year-to-date and favorable brand and channel mix contributed to over 200 basis points of gross margin improvement in the third quarter of 2025. Looking ahead, we believe the actions we have taken, namely raising prices and diversifying our sourcing, including leveraging our manufacturing facilities in the Dominican Republic and Puerto Rico will help to offset some of the impact from the higher tariffs that will pressure margins over the next few quarters. We are confident that the strength of our brand portfolio and our enhanced supply chain will allow us to fully capture the growth opportunities we believe exist in 2026 and beyond.”

Third Quarter 2025 Review
Third quarter net sales increased 7.0 percent to $122.5 million compared with $114.6 million in the third quarter of 2024. Wholesale net sales for the third quarter increased 6.1 percent to $89.1 million compared to $84.0 million in the third quarter of 2024. Retail net sales for the third quarter increased 10.3 percent to $29.5 million compared to $26.8 million in the third quarter of 2024. Contract Manufacturing net sales for the third quarter increased 4.1 percent to $3.9 million compared to $3.8 million in the third quarter of 2024.

Gross margin in the third quarter of 2025 was $49.3 million, or 40.2 percent of net sales, compared to $43.6 million, or 38.1 percent of net sales, for the same period last year. The increase in gross margin as a percentage of net sales was attributable to an increase in both Wholesale and Retail gross margin, partially offset by a decrease in Contract Manufacturing gross margin.

Operating expenses were $37.6 million, or 30.6 percent of net sales, for the third quarter of 2025 compared to $33.6 million, or 29.3 percent of net sales, for the same period a year ago. Excluding $0.7 million of acquisition-related amortization in the third quarter of 2025 and 2024, adjusted operating expenses were $36.8 million in the current year period and $32.9 million in the year-ago period. As a percentage of net sales, adjusted operating expenses were 30.1 percent in the third quarter of 2025 compared with 28.7 percent in the year ago period. The increase in operating expenses was driven by higher outbound logistics costs, higher selling costs associated with the increase in our direct-to-consumer business, as well as an increase in its marketing investments compared with the year ago period.

Income from operations for the third quarter of 2025 was $11.7 million, or 9.6 percent of net sales, compared to $10.1 million, or 8.8 percent of net sales, for the same period a year ago. Adjusted income from operations for the third quarter of 2025 was $12.4 million, or 10.1 percent of net sales, compared to adjusted income from operations of $10.8 million, or 9.4 percent of net sales, a year ago.

Interest expense for the third quarter of 2025 was $2.6 million compared with $3.3 million for the prior year period. The decrease in interest expense was driven by lower debt levels as well as lower interest rates.

The company reported third quarter net income of $7.2 million, or $0.96 per diluted share, compared to $5.3 million, or $0.70 per diluted share, in the third quarter of 2024. Adjusted net income for the third quarter of 2025 was $7.8 million, or $1.03 per diluted share, compared to $5.8 million, or $0.77 per diluted share, in the year ago period.

Balance Sheet Review
Cash and cash equivalents were $3.3 million as of September 30, 2025 compared to $3.7 million at September 30, 2024 and December 31, 2024.

As of September 30, 2025, total debt, net of unamortized debt issuance costs of $1.9 million, was $139.0 million, consisting of a $28.9 million senior term loan and $112.0 million of borrowings under the company’s senior secured asset-backed credit facility. As of September 30, 2025, total debt, net of unamortized debt issuance costs was down 7.5 percent from September 30, 2024, and was up 8.0 percent compared to December 31, 2024. The increase in debt at September 30, 2025 compared to December 31, 2024 was a result of the seasonal fluctuations of its business, with additional borrowings used to fund inventory purchases.

Inventories as of September 30, 2025, were $193.6 million, up 12.7 percent compared to $171.8 million on the same date a year ago and up 16.1 percent compared to $166.7 million as of December 31, 2024. The increase in inventories compared with one year ago and at December 31, 2024 was primarily driven by increased tariff costs.

Image courtesy Rocky Brands/Xtratuf