Rocky Brands (RCKY) investor relations material

Executive summary

• Q3 net sales rose 13.3% YoY to $138.8M, the second consecutive quarter of double-digit growth; results exceeded expectations.

• Broad brand demand and strong DTC performance supported growth; tariff-related gains boosted reported profitability.

Financial highlights

• Wholesale sales rose 11.8% to $99.6M; retail sales increased 20.0% to $35.4M; contract manufacturing fell 3.1% to $3.8M.

• Gross profit was $62.5M and reported gross margin was 45.0%, versus $49.3M and 40.2%; gross margin excluding tariff and free-trade-zone gains was 40.7%.

• Operating income was $18.2M, or 13.1% of sales, versus $11.7M, or 9.6%; adjusted operating income was $18.9M versus $12.4M.

• GAAP net income was $12.8M, or $1.69 per diluted share, versus $7.2M, or $0.96; adjusted net income was $13.4M and adjusted diluted EPS was $1.76 versus $7.8M and $1.03.

Outlook and guidance

• FY 2026 revenue growth guidance increased to ~10.5% from 8.5%; Q4 sales growth implied by guidance is ~8%.

• FY 2026 gross margin is projected at ~41% normalized for tariff and free-trade-zone impacts; reported EPS guidance rose to ~$5.30 from ~$5, while net EPS remains ~$4.

• Operating expenses as a percentage of sales are expected to increase slightly YoY, reflecting higher Q4 performance-based compensation.

• Q4 retail is expected to grow faster than wholesale; contract manufacturing sales are expected to decline by a couple million dollars as military contracts wind down.

• Management cited holiday-season momentum and expects a strong finish to 2026; the long-term gross-margin target remains 40%, with FY 2027 guidance planned for the next earnings call.