Cost cuts and double-digit sales growth helped Rocky Brands cut losses in half for the first quarter ended March 31. Management for the footwear manufacturer noted that strong sales from the Wholesale and Military segments drove consolidated results above internal projections.
The net loss was $600,000, or 10 cents per diluted share, for the period, versus a net loss of $1.1 million, or 20 cents per diluted share, a year ago.
Total sales for Rocky improved 12.0% to $56.1 million from $50.1 million a year ago despite weakness from the companys Retail business, which slipped 5.7% to $12.9 million from $13.7 million in Q1 last year on a company-wide shift to focus more on Internet transactions and the decision to remove a portion of its Lehigh mobile stores from operations.
Still, results for the Retail segment were more than offset by the aforementioned strength from the Wholesale and Military segments.
For the Wholesale segment, sales improved 5.2% to $37.9 million from $36.0 million in the year-ago period on strength from the Work category, which benefitted from solid results generated by the Georgia Boot and Rocky brands. The Dickies brand, for which Rocky recently ended its licensing contract, fell 20.6% while the Western category increased 13.7% and the Hunting category saw a modest increase.
Military segment sales surge to $5.2 million from $300,000 a year ago.
Gross margin in the first quarter was 33.4% of sales compared to 40.1% of sales for the comp period last year. Management said the decrease in margins was a result of lower wholesale margins due to increased manufacturing costs and increased in the Military segment, which carries lower margins compared to the Retail and Wholesales businesses. SG&A decreased 9.6% to $18.0 million on reductions in salaries and benefits, bad debt expense and Lehigh mobile store expenses.
