Rocky Brands NASDAQ: RCKY reported first-quarter 2026 results that management said extended the sales momentum seen in the back half of last year, with growth across several of its footwear brands and continued strength in direct-to-consumer channels. The company also reiterated its full-year 2026 guidance, while detailing the impact of higher tariffs on first-quarter profitability and expectations for margin recovery in the second half of the year.
Sales rose 9% as retail outpaced wholesale
Chief Executive Officer Jason Brooks said the company delivered “a solid start to 2026,” noting first-quarter sales increased 9% following a 9% increase in the fourth quarter of 2025. Brooks attributed the performance to legacy styles, new product introductions, “robust D2C growth,” and “improving wholesale trends.” He added that extended winter weather across much of the Eastern U.S. supported demand for cold weather offerings, while spring collections gained traction later in the quarter.
Chief Operating and Chief Financial Officer Tom Robertson said reported net sales increased 9.1% year-over-year to $124.4 million, which he said was in line with expectations. By segment:
- Wholesale sales increased 4.8% to $78.4 million.
- Retail sales increased 16.5% to $42.7 million.
- Contract manufacturing sales were $3.3 million.
Brooks emphasized what he described as “the quality of our growth,” citing “consistent full price selling” with brick-and-mortar accounts, digital partners, and the company’s own branded websites.
Tariffs weighed on margins and earnings
Profitability declined year-over-year as higher tariffs flowed through the quarter. Robertson said first-quarter gross profit was $45.4 million, or 36.5% of sales, compared with $47.0 million, or 41.2% of sales, a year ago. He attributed the 470-basis-point decline primarily to “a little over $7 million in higher tariffs” versus the prior-year period, with a smaller impact from increased sales of discontinued styles. He said the tariff pressure was partially offset by strong full-price selling, a more favorable mix toward higher retail sales, and the benefit of price increases implemented in the second quarter of 2025.
Segment gross margins also fell year-over-year, reflecting tariff pressure, with wholesale margins at 34.4% versus 40.3% and retail margins at 42.6% versus 45.7%. Contract manufacturing margins improved to 9.2% from 5.8%.
Operating expenses were $41.8 million, flat at 33.6% of net sales compared with the prior year. Excluding acquisition-related amortization, adjusted operating expenses were $41.1 million versus $37.6 million last year, with Robertson citing higher logistics costs tied to increased retail sales.
Income from operations was $3.6 million, or 2.9% of sales, compared with $8.7 million, or 7.6% of sales, a year ago. On a GAAP basis, Rocky Brands reported net income of $1.3 million, or $0.17 per diluted share, compared with $4.9 million, or $0.66 per diluted share, in the first quarter of 2025. Adjusted net income was $1.8 million, or $0.24 per diluted share, compared with $5.5 million, or $0.73 per diluted share, a year ago.
Brand updates: XTRATUF and Muck led growth
Brooks highlighted broad-based momentum across the portfolio, led by the company’s rubber brands. He said XTRATUF delivered “high teen growth” year-over-year, with all channels contributing. U.S. wholesale increased low double digits, e-commerce posted “substantial growth,” and marketplace sales improved throughout the quarter. He cited continued strength in core products such as the 15-inch legacy boot and ankle deck boot styles, along with spring 2026 introductions including the brown ADB Sport and men’s black Deep Storm ADB, as well as the Kid’s Tuff Cruisers collection. Brooks also pointed to “broad-based” distribution gains across big box sporting goods retailers, outdoor-focused accounts, specialty independents, and “Western-focused partners,” along with solid performance in the marine channel.
Muck posted what Brooks called its best first quarter in more than three years, with “high teen growth” across wholesale, e-commerce, marketplace, and international. He said extended winter weather drove strong demand for Arctic collections, and noted the company’s marketing efforts used social media and digital advertising to capitalize on those conditions. Brooks also cited strong inventory positions in core chore and chore steel styles, early delivery of the new Rainscape spring collection, significant growth in the hardware channel due to partnership expansion with a national hardware retailer, and “meaningful improvements” in sporting goods as Muck regained shelf space for legacy Arctic styles.
Other brand commentary included:
- Durango: Single-digit growth, with Brooks noting strong performance in Texas where the Hispanic market segment improved with double-digit increases, plus double-digit gains in Florida and Georgia. He said a major Western retailer grew more than 30% on exclusive styles and expansion into categories such as Shyloh and women’s Crush fashion.
- Georgia Boot: Slight single-digit decline due to timing, as “meaningful wholesale orders booked in late March carried into April,” according to Brooks. He said e-commerce and marketplace sales increased healthy double digits, and cited strength in the Carbon Flex Wedge collection and a fast-ramping BOA-equipped version. He also pointed to the new Core 37 Farm and Ranch assortment beginning to ship during the quarter.
- Rocky Work/Outdoor/Western: Brooks said wholesale trends improved with greater in-line sales versus last year’s off-price focus. He highlighted growth in Outdoor programs with upper Midwest retailers and renewed activity with a Midwest online retailer, plus traction from new spring deliveries and Western replenishment orders, including the Ride LTE series introduced late in the fourth quarter.
- Commercial, Military, and Public Service: Low single-digit growth, with Brooks citing high single-digit growth in Commercial Military driven by strong double-digit gains with Army & Air Force Exchange Service and growth at the Navy Exchange aided by S2V steel toe boots.
- Lehigh: Brooks said the B2B business grew high single digits, driven by new customer acquisition tied to sales force structural changes and improving trends in subsidy utilization and average subsidy dollars. He also said the Bollé Eyewear partnership is contributing incremental sales through prescription safety eyewear tied to managed PPE programs.
Outlook reiterated; margin recovery expected as tariffs ease
Robertson said the company reiterated full-year 2026 guidance first provided on its fourth-quarter call, with revenue expected to increase approximately 6% over 2025 and retail growing faster than wholesale. He said gross margins are expected to be down modestly from the 40.9% reported in 2025, reflecting roughly $10 million in higher tariffs hitting the first half of the year, now expected to be split roughly 70/30 between the first and second quarters (versus a prior view of 80/20). He also said SG&A is expected to rise in dollars due to increased marketing spend, while leveraging about 80 basis points as a percentage of revenue. Interest expense is expected to decrease again in 2026 due to lower debt levels, though the reduction will be more modest than in 2025, translating into EPS growth in the low teen range.
For the second quarter, Robertson said gross margins should improve from first-quarter levels but “to a lesser degree than initially thought,” due to about $1 million more in tariffs expected to flow into the second-quarter P&L from timing shifts. As a result, he said the company expects second-quarter EPS to be down “somewhere in the neighborhood of $0.20” versus the prior year.
Brooks said the company expects the tariff headwind to lessen starting in the second quarter and described a “clear line of sight” to returning gross margins to the 40% range and delivering “meaningful earnings growth” in the second half.
Q&A: Demand, freight surcharges, and tariff refunds
Asked about the demand environment, Brooks said management feels “pretty positive,” highlighting momentum in XTRATUF, a “turn” in Muck, and positive trends in Rocky and Durango, while noting commercial military has not seen U.S. government contracts. Robertson added that first-quarter and April “at-once trends” were up year-over-year and said the company’s order book looks “very strong” for the rest of the year, with retailers potentially restocking after recent sell-through.
On costs, Robertson said the company saw higher freight fuel surcharges at the end of the first quarter that continued into early second quarter, contributing to higher logistics costs. He also said management is monitoring oil-based input costs used in outsoles and rubber compounds, noting the company has seen slight increases and has been warned of larger ones if conditions do not stabilize.
On tariff-related refunds, Robertson said the company has begun the refund request process after the ACE Portal opened, and that the full-year guidance assumes no refunds are captured, which would be “all upside.” He said the total refund request Rocky Brands is seeking is about $20.5 million, though timing of payment is uncertain and the system is “not working perfectly.” He also said the company’s guidance forecasts future Section 122 tariffs at 10%, while it is monitoring potential Section 301 developments later in the summer.
On the balance sheet, Robertson said cash and cash equivalents were $1.7 million at quarter end, and debt totaled $122.2 million, down 5% versus March 31 of the prior year. Inventories were $172.6 million, down 1.6% year-over-year and down 4.7% from year-end 2025, which Robertson said reflected effective inventory management while navigating tariffs and supporting growth.
About Rocky Brands NASDAQ: RCKY
Rocky Brands, Inc is a designer, manufacturer and marketer of premium footwear, apparel and accessories for a diverse range of end-users. The company serves outdoor enthusiasts, hardworking professionals and military personnel under a family of brands that includes Rocky, Georgia Boot, Durango and Xtratuf. Products span hunting and hiking boots, work and safety footwear, western and lifestyle boots, as well as performance socks and outerwear.
Rocky Brands operates multiple production and distribution facilities in North America, with its corporate headquarters located in Nelsonville, Ohio.
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