Rocky Brands, Inc. posted a 2.2 percent increase in net sales in the first quarter to $112.9 million, but the company improved even more when looking at like-for-like, or organic sales, which increased 7.6 percent for the period when excluding the divested Servus brand from the year-ago period.

The company manages and markets the Rocky, Georgia Boot, Durango, Lehigh, The Original Muck Boot Company, Xtratuf, and Ranger brands.

  • Wholesale sales for the first quarter were $79.8 million compared to $80.1 million for the 2023 Q1 period. Excluding the Servus brand, which the company divested in March 2023, Wholesale sales increased 7.0 percent.
  • Retail sales for the first quarter increased 3.0 percent year-over-year to $30.4 million, compared to $29.5 million for the comparative period in 2023.
  • Contract Manufacturing sales, which include contract military sales and private label programs, were $2.7 million in Q1, compared to $0.9 million in the prior-year Q1 period.

Gross margin in the first quarter was 39.1 percent of net sales, compared to 39.6 percent of net sales for the year-ago quarter. The 2023 quarter included a tariff refund with a net impact of approximately $1.3 million. Excluding the refund, the gross margin increased by 70 basis points year-over-year, driven by the sale of the Servus brand, which had lower margins than the company’s current product portfolio.

Operating expenses were $36.2 million, or 32.0 percent of net sales, for the first quarter of 2024 compared to $39.6 million, or 35.9 percent of net sales, for last year’s comp period. Excluding $0.7 million of acquisition-related amortization in the first quarter of 2024, and $0.8 million in acquisition-related amortization in the first quarter of 2023, adjusted operating expenses were $35.5 million in the current-year period and $38.8 million in the year-ago period.

  • As a percentage of net sales, adjusted operating expense was 31.4 percent in the first quarter of 2024 compared with 35.2 percent in the year-ago period. The decrease in operating expenses was primarily attributable to cost-saving reviews and operational efficiencies achieved through strategic restructuring initiatives implemented in 2023.

Income from operations for the first quarter of 2024 was $8.0 million, or 7.1 percent of net sales, compared to $4.2 million, or 3.8 percent of net sales, for the comparative period last year.

  • Adjusted operating income for Q1 2024 was $8.7 million, or 7.7 percent of net sales, compared to Adjusted operating income of $4.9 million, or 4.5 percent of net sales, in the 2023 Q1 period.

Interest expense for Q1 was $4.5 million, compared with $6.0 million in the prior-year period. The decrease was driven by lower debt levels in the first quarter of 2024 compared with the first quarter of 2023.

RCKY reported first-quarter net income of $2.6 million, or 34 cents per diluted share, compared to a net loss of $0.4 million, or 5 cents per diluted share, in the first quarter of 2023.

  • Adjusted net income for the first quarter was $3.1 million, or 41 cents per diluted share, compared to a net loss of $0.8 million, or 12 cents per diluted share, in the year-ago period.

Balance Sheet
Cash and cash equivalents were $3.1 million at quarter-end, compared to $4.9 million at the end of Q1 last year.

Inventories at quarter-end were $165.1 million, down 26.3 percent compared to $224.1 million on the quarter-end date last year and down 2.4 percent compared with $169.2 million at December 31, 2023.

Total debt, net of unamortized debt issuance costs at March 31, 2024, was $156.0 million, consisting of a $74.3 million senior term loan and $83.3 million of borrowings under the company’s senior secured asset-backed credit facility. Total debt at quarter-end was down 29.0 percent versus the prior-year quarter-end and down 9.9 percent versus the total debt at year-end.

Image courtesy Rocky Brands, Inc./Xtratuf