Rocky Brands Inc. said fall pre-books for its outdoor and hunting boots are running 5 percent ahead of a year ago despite the mild winter season thanks to new product offerings such as the athletic-inspired Rocky Athletic Mobility product line.
“That targets a younger demographic and has led to increased shelf space with retailers like Bass Pro Shops, Gander Mountain and Academy Sports,” said Rocky Brands President and CEO David Sharp.
Sharp disclosed the information during a conference call focusing on the company’s first quarter results. RCKY reported net income reached $700,000 in the quarter ended March 31, compared to $200,000 in the year earlier quarter, while diluted earnings per share increased 42.9 percent to 10 cents a share. First quarter net sales improved slightly to $53.3 million versus net sales of $52.3 million a year ago.
Wholesale sales for the first quarter rose 6.5 percent to $42.4 million compared to $39.8 million for the same period in 2011. The company said bookings for its western style Durango brand were up 120 percent, thanks in part to a 23 percent jump in shipments to Zappos.com; the opening of doors with DSW.com, Title Nine and Famous Footwear; and growing orders from Shoe Show and Shoe Carnival. Those gains were partially offset by a 50 percent drop in sales by the company’s Military segment and a 10.3 percent drop in by its Retail segment.
Web direct sales grew 24 percent from a year earlier and now make up 60 percent of RCKY’s retail sales, compared to 42 percent a year ago. Much of that growth is being fueled by arrangements that enable employees of industrial companies to order customer boots online. RCKY is now working to expand that program with hospitals and other healthcare providers.
Gross margin reached $18.0 million, or 33.8 percent of sales, down 300 basis points from the same period last year. The decrease driven primarily by lower initial mark ups associated with the rollout of a broader selection of Georgia work boots from 700 Tractor Supply stores to all 1,119.
Selling, general and administrative (SG&A) expenses decreased 8.2 percent to $16.7 million or 31.4 percent of net sales, down 250 basis points from a year ago. The $1.5 million decrease is primarily due to lower compensation expense and operating costs at the company’s retail business.
Income from operations was $1.3 million, or 2.4 percent of net sales, compared to $1.0 million, or 2.0 percent of net sales, in the prior year period. Rocky ended the quarter with inventory of $64.1 million, down 4.0 percent from a year ago. The increase in inventory was the result of an increase in cost per unit partially offset by a decrease in units of footwear.
