US' Rocky Brands posts net sales of $125.6 mn in Q3 FY23

The company's wholesale segment, which makes up a substantial part of its business, saw a significant decline of 17.4 per cent to $99.7 million, from $120.7 million in the prior year. Conversely, the retail segment posted a growth of 4.7 per cent, with sales reaching $24.5 million up from $23.4 million in the previous year's comparison. Sales in the contract manufacturing segment, including military contracts and private label programmes, fell sharply to $1.4 million from $3.3 million, primarily due to the conclusion of contracts with the US military, the company said in a press release.

Despite the sales downturn, Rocky Brands experienced a gross margin increase to $46.5 million, or 37 per cent of net sales, up from 35.2 per cent in the same quarter last year. This improvement was accompanied by a decrease in operating expenses, which were $32.3 million, or 25.7 per cent of net sales, compared to $40.3 million or 27.3 per cent of net sales in the third quarter of FY22. Adjusted operating expenses saw a 290-basis-point improvement as a percentage of adjusted net sales.

Operationally, income from operations rose to $14.3 million, or 11.4 per cent of net sales, a boost from the $11.6 million, or 7.9 per cent of net sales reported in the same period last year. Adjusted operating income was at $15.8 million, or 12.6 per cent of adjusted net sales, compared to $11.3 million or 7.9 per cent a year ago.

Net income for the quarter stood at $6.8 million, or $0.93 per diluted share, an increase from the third quarter of FY22's net income of $5.7 million, or $0.77 per diluted share. Adjusted net income showed a substantial rise to $8 million, or $1.09 per diluted share, up from $5.5 million, or $0.74 per diluted share in the same quarter of the previous year.

Rocky Brands highlighted a significant year-over-year reduction in inventories, which decreased by 26.5 per cent.

“Our quarterly performance saw meaningful improvement on a sequential basis as demand for our product improved, resulting in further reduced channel inventory levels and an acceleration in at-once orders from many of our key wholesale partners. Despite the difficult start to 2023, we were confident that our results for the first half of 2023 reflected macroeconomic headwinds and industry dynamics more than the strength and desirability of our brand portfolio. While current market conditions remain challenging, the pace of our sales picked up in the third quarter driven by improved retailer inventory positions and ongoing consumer demand for our durable, innovative and accessibly priced work, western and outdoor footwear,” said Jason Brooks, chairman, president and chief executive officer.

Fibre2Fashion News Desk (DP)