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What were the key takeaways from Rocky Brands's earnings call?

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- **Revenue & Profit Growth**: 7% revenue rise to $122.5M, adjusted EPS up 34% to $1.03, driven by XTRATUF and Muck brand strength.
- **Gross Margin Expansion**: 210bps improvement to 40.2%, supported by price hikes and in-house production shift.
- **Tariff Mitigation Progress**: 50% in-house manufacturing target for 2026, reducing China reliance to 10%. Q4 2025 will bear peak tariff impact.
- **Key Brand Momentum**: XTRATUF e-commerce up double digits, Muck受益于Bone Collector合作，Durango面临延迟交货但Q4有望改善。
- **2026 Outlook**: Gross margins to recover to 39-40% in H2, with XTRATUF cold weather collection and Sesame Street collaboration driving growth.

**CEO Summary Section**
- **Revenue Growth**: Q3 2025 net sales increased 7% to $122.5 million, driven by double-digit growth in XTRATUF and Muck brands. Adjusted diluted EPS rose 34% to $1.03.
- **Gross Margin Expansion**: Gross margin improved 210 basis points to 40.2%, benefiting from brand mix, price increases, and higher retail sales (46.8% margin).
- **Tariff Mitigation**: Shifted 50% of production to in-house facilities (Dominican Republic, Puerto Rico) and diversified suppliers to Vietnam, Cambodia, and India, reducing China reliance to 10%.
- **Key Brand Momentum**: XTRATUF saw double-digit U.S. wholesale and e-commerce growth, while Muck benefited from Bone Collector collaboration and GMA feature. Durango faced delayed shipments due to Q2 price increase anticipation.

**CFO Financial Commentary**
- **Top Line**: Wholesale (+6.1%), Retail (+10.3%), and Contract Manufacturing (+4.1%) all expanded, with retail driving margin strength.
- **Expense Management**: Operating expenses rose 7.5% to $37.6 million, driven by logistics and marketing costs. Interest expense decreased 21% due to lower debt levels.
- **Balance Sheet**: Cash of $3.3 million and debt of $139 million. Inventories grew 12.7% to $193.6 million, with $17 million tied to tariffs. $10 million tariff impact expected in Q4, with remaining in 2026H1.
- **2025 Guidance**: Revenue up 4-5%, gross margins down 70bps to 38-39%, EPS up 10% to $2.80.

**Q&A Highlights**
- **Consumer Sentiment**: Cautious spending but strong sell-through in e-commerce and key accounts. Q3 e-commerce rebounded post-platform transition.
- **Supply Chain Delays**: $2-3 million in delayed shipments due to new supplier ramp-up. 2026 in-house production target: 50% vs. 2025's 30%.
- **Tariff Impact**: Q4 2025 will be most impacted, with 2026H2 gross margins expected to recover to 39-40% as tariffs flow through.
- **XTRATUF Outlook**: Cold weather collection launch and Sesame Street collaboration poised for Q4 success. Inland market expansion underway.
- **Durango Challenges**: Hispanic retail softness and sourcing delays, but improving in September.


Rocky Brands, Inc. (RCKY) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

RCKY

RCKY fundamentals

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