Rocky Brands (RCKY) investor relations material

Executive summary

• Achieved 12% year-over-year sales growth in Q2 2026 to $118.4 million, the highest since 2022, with broad-based strength across brands and channels.

• XTRATUF led growth, becoming the largest brand for the quarter, with strong wholesale and e-commerce performance and expanded distribution.

• Gross margin improved to 51.4% of net sales, up from 41.0% in the prior year, aided by IEEPA tariff refunds.

• Net income increased to $13.9 million ($1.83 per diluted share), with adjusted net income at $14.4 million ($1.90 per diluted share), both significantly higher than last year.

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

Financial highlights

• Net sales rose 12% year-over-year to $118.4 million in Q2 2026.

• Gross profit was $60.8 million (51.4% of sales), up from $43.3 million (41.0%) last year; excluding tariffs, gross margin was 38.7%.

• 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.

• Interest expense decreased to $2.1 million due to lower debt levels.

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.

• SG&A as a percentage of sales expected to rise slightly due to higher freight, logistics, and digital advertising investments.

• Strong bookings in Q2 are expected to provide momentum for the wholesale segment in the second half of 2026.