Rocky Shoes & Boots, Inc. got a nice boost in the third quarter from its January 2005 acquisition of EJ Footwear Group. Consolidated net sales for Q3 increased 88.0% to $94.1 million from $50.1 million in the year-ago period. Sale would have been up about only slightly when excluding approximately $43.8 million in sales attributed to the EJ business in the most recent quarter. Gross margins improved 420 basis points to 36.2% of sales, due primarily to sales of EJ Footwear product which carry a higher gross margin than Rocky products. Net income for the period was up 33.2% to $6.5 million, or $1.15 per diluted share, compared to $4.9 million, or 98 cents per diluted share, in the year-ago period.
The diluted EPS number came in at the high end of the companys revised guidance issues two weeks ago, when Rocky management issued a warning that it would disappoint for the quarter and the year. The results for the quarter and the revised guidance fell far short of analysts original estimates of $1.34 per share on $100.6 million in sales for the quarter.
RCKY chairman and CEO Mike Brooks said sales of outdoor footwear were “weaker than expected,” partially offset by strength in the work and western categories.