Rocky Shoes & Boots is riding a two-tiered wave made up of increased military sales and aggressive expansion strategies among several key retail customers. RCKY third quarter sales increased 21.0% to $50.1 million in sales, with roughly 10%, or $5.1 million, of that coming from military sales. Nearly all of the military sales were new business. Gross margin rose 40 basis points to 32.0% of net sales for the third quarter from 31.6% a year ago.
Net income increased 40.9% to $4.9 million, or 98 cents per diluted share, compared to $3.5 million, or 77 cents per diluted share, in Q3 2003.
The Military impact, combined with the IPO-funded expansions of Gander Mountain and Cabelas, is boosting Rocky into a level the company has not experienced before, surpassing $50 million in quarterly sales for the first time.
The company has also launched several new product lines, and has seen some solid growth in their apparel category, which has “richer” margins than their footwear. Last year, Rocky apparel sales were roughly $3.0 million and this year they more than doubled to $6.5 million.
The Gates glove division was the sole sore spot for the company this quarter, with sales flat at $2.3 million. Rocky will continue with its plans to sell both Gates and Rocky branded gloves going forward. The slower than anticipated sales were said to be caused by delivery problems from Rockys sourcing companies.
