Rocky Brands (RCKY) investor relations material

Executive summary

• Q1 2026 net sales rose 9.1% year-over-year to $124.4 million, driven by strong retail, online, and wholesale demand, with notable contributions from XTRATUF and Muck brands.

• Growth was supported by legacy styles, new product introductions, and robust D2C and wholesale trends.

• Profitability declined due to $7.1 million in higher tariffs, partially offset by price increases and sourcing diversification.

• Net income dropped to $1.3 million ($0.17/share), down from $4.9 million ($0.66/share) last year; adjusted net income was $1.8 million ($0.24/share).

• All major brands contributed, with channel and geographic strength, and extended winter weather plus effective inventory management supported strong sell-in and sell-through.

Financial highlights

• Gross profit was $45.4 million (36.5% margin), down from $47 million (41.2%) last year, mainly due to higher tariffs.

• Operating income was $3.6 million (2.9% margin), down from $8.7 million (7.6%) last year; adjusted operating income was $4.3 million.

• Retail sales grew 16.5% to $42.7 million; wholesale up 4.8% to $78.4 million; contract manufacturing $3.3 million, up 25%.

• Inventory at quarter-end was $172.6 million, down 1.6% year-over-year; total debt decreased 5% to $122.2 million.

• Cash and cash equivalents were $1.7 million at quarter end; interest expense declined to $2.1 million.

Outlook and guidance

• Full-year 2026 revenue expected to grow ~6% over 2025, with retail outpacing wholesale.

• Gross margins forecasted to be modestly down from 2025’s 40.9%, reflecting ~$10M in higher tariffs, mostly in H1; margins expected to rebound above 40% in H2 as tariff headwinds subside.

• EPS growth projected in the low teens for 2026; Q2 EPS expected to be down ~$0.20 year-over-year due to tariff timing.

• Management expects continued volatility in tariffs and global trade policy, with ongoing mitigation strategies including price adjustments and sourcing shifts.

• Sufficient liquidity is anticipated to fund operations and obligations for the next twelve months and beyond.