Rocky Brands (RCKY) Q2 2025 earnings summary

Executive summary

• Net sales rose 7.5% year-over-year to $105.6 million in Q2 2025, driven by strong brand performance, high single-digit revenue growth, and full-price selling, with Retail and Wholesale segments leading gains.

• Adjusted EPS more than tripled year-over-year to $0.55 per diluted share, with net income reaching $3.6 million, reversing a $1.2 million loss in the prior year quarter.

• Gross margin improved by 230 basis points to 41.0% of net sales, reflecting favorable product mix, pricing actions, and supply chain agility.

• Outdoor brands XTRATUF and Muck led growth, with XTRATUF as the fastest-growing brand and Muck posting its best quarter-to-quarter comparison since 2023.

• Strategic partnerships, new product launches, and expanded distribution contributed to performance across all major brands.

Financial highlights

• Gross profit was $43.3 million (41.0% of net sales), up from $38.0 million (38.7%) year-over-year, with a 230 basis point gross margin improvement.

• Operating income grew 58.7% to $7.2 million (6.8% of net sales); adjusted operating income was $7.8 million (7.4%).

• Interest expense dropped to $2.5 million from $6.1 million last year, reflecting lower rates and debt.

• Cash and cash equivalents stood at $2.8 million as of June 30, 2025; inventories increased 6.8% year-over-year to $186.8 million.

• Total debt decreased 13.1% year-over-year to $132.5 million.

Outlook and guidance

• 2025 revenue guidance raised to 4–5% growth over 2024, up from prior low single-digit expectations.

• 2025 EPS now expected to increase ~10% over last year’s $2.54, reversing prior guidance for a slight decline.

• Gross margins forecasted to decline ~70 basis points from 2024 due to $11 million in tariff headwinds, partially offset by pricing actions.

• U.S. Wholesale bookings for the second half of 2025 are up solidly year-over-year.

• Management expects sufficient liquidity to fund operations and obligations for the next twelve months and beyond.