US' Rocky Brands net sales at $99.8 mn in Q2 FY23

In the wholesale segment, sales took a substantial hit, falling 45.5 per cent to $71.5 million from $131.2 million in 2022's corresponding quarter. Similarly, retail segment sales decreased by a smaller margin of 3.6 per cent, totalling $25.1 million compared to $26 million last year.

Sales in the contract manufacturing segment also declined to $3.3 million, down from $4.9 million. This reduction was due to the expiration of certain contracts with the US military, Rocky Brands said in a press release.

However, Rocky Brands' gross margin for Q2 FY23 was $37.6 million or 37.6 per cent of net sales, a significant increase from last year's $53.8 million or 33.2 per cent. The 440-basis-point rise was attributed to higher wholesale segment gross margins as a result of pricing actions implemented in the second half of 2022, as well as decreases in inbound logistics costs and an increase in retail segment sales, which traditionally carry higher gross margins.

Operating expenses amounted to $35.4 million or 35.4 per cent of net sales in Q2 FY23, compared to $48.2 million or 29.7 per cent last year. Income from operations was $2.2 million, or 2.2 per cent of net sales, a decrease from $5.6 million or 3.5 per cent in the previous year.

Rocky Brands reported a net loss of $2.7 million, or $0.37 per diluted share in Q2 FY23, in stark contrast to the net income of $0.9 million, or $0.12 per diluted share, in Q2 FY22.

Jason Brooks, chairman, president and chief executive officer, said: “For the second quarter in a row, our sell-through performance at several of our major wholesale accounts outpaced sell-in as retailers continue to work on aligning overall inventory levels with the current market environment. Consumer response to our brand portfolio remains solid with strong full price selling and recent price increases helping drive a 440-basis-point improvement in gross margin.

“While our year-to-date results were more challenging than anticipated due in part to ongoing industry headwinds, we believe our business is positioned for improvement over the remainder of 2023 based on consumer demand for our products, our current order book and recent conversations with key wholesale partners about their plans for the second half of the year."

Fibre2Fashion News Desk (DP)