Rocky Brands reported first quarter net sales increased 7.2% to $61.7 million versus net sales of $57.5 million as gains in Work and Hunting categories were offset by declines in the Western business, again due to weakness on the fashion side.

For the first quarter, Rocky said on a conference call that its wholesale sales increased 9.7% to $44.6 million. Sales of its Work segment increased nearly 13% to $27.3 million. The Dickies licensed boot business was up nearly 60%. The Dickies brand recently signed up Kohl's for an 80-store test in California during the back half of 2007 and more recently reached a deal to expand distribution at Sears from 550 to 900 doors. Its Rocky and Georgia work brands will also be tested in 100 Sears stores this fall.

In its Western segment, first-quarter sales were $9.9 million versus $11 million a year ago with the decrease coming from the ongoing slowdown in its women's business. Sales of Durango were down approximately $1.7 million, but this was partially offset by a 22% increase in Rocky Western footwear, which management described as a “more core basic footwear and is a focus of our growth strategy in that category going forward.”

Hunting footwear posted its second consecutive quarter of positive gains after a difficult 18-month period for the category. Sales increased approximately $400,000 to $3.7 million.

In Outdoor and Work Apparel, sales grew to $1.4 million from $1.1 million a year ago, and has been benefiting from infusing the product with more technical innovation.

Rocky's retail division, which includes the Lehigh Retail on Wheels business and two concept stores, saw first-quarter sales increase to $17 million from $16 million the year before. Lastly, Rocky had approximately $100,000 of sales to the military in the first quarter compared to $900,000 in the prior year period.

Gross margins declined to 42.3% from 43.3%, primarily due to a decrease in sales of Western footwear, which carry higher gross margins, and an increase in closeout sales. SG&A was reduced to 36.2% from 36.7%. Net income declined to $765,900, or 14 cents a share, from $893,230, or 16 cents, a year ago.