Rocky Brands (RCKY) investor relations material

Executive summary

• Net sales rose 12% year-over-year to $118.4 million in Q2 2026, the highest since 2022, with broad-based strength across brands and channels, led by XTRATUF and strong retail and e-commerce performance.

• Gross margin improved to 51.4% from 41.0% last year, driven by IEEPA tariff refunds, which reduced cost of goods sold and boosted profitability.

• Net income for Q2 2026 was $13.9 million ($1.83 per diluted share), up from $3.6 million ($0.48) last year; adjusted net income was $14.4 million ($1.90 per share).

• Direct-to-consumer and wholesale channels outperformed expectations, with significant new shelf space gains and strong bookings for the second half of the year.

• Retail segment led growth, driven by e-commerce and expanded product offerings.

Financial highlights

• Net sales rose 12% year-over-year to $118.4 million in Q2 2026; first half 2026 net sales increased 10.5% to $242.8 million.

• Gross profit was $60.8 million (51.4% of sales), up from $43.3 million (41.0%) last year; first half gross margin rose to 43.8%.

• Operating income reached $19.7 million (16.6% of sales), up from $7.2 million (6.8%) last year; adjusted operating income was $20.4 million.

• Debt decreased 7.6% year-over-year to $122.4 million; inventories down 7.1% to $173.5 million.

• Net cash provided by operating activities for the first half: $9.7 million.

Outlook and guidance

• Full-year 2026 revenue expected to increase approximately 8.5% over 2025, with Q4 growth outpacing Q3.

• Gross margins forecasted at approximately 40% (excluding tariff refund), with sequential improvement in Q3 and Q4.

• EPS guidance: around $4 per share excluding tariff refund, $5 on a reported basis.

• Management expects continued growth, supported by digital marketing, product expansion, and mitigation strategies for tariff impacts.

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