Rocky Brands (RCKY) Q4 2025 earnings summary

Executive summary

• Q4 2025 net sales rose 9.1% year-over-year to $139.7 million, with retail sales up 30.8% and wholesale down 2.1%, driven by strong direct-to-consumer demand and robust holiday season performance.

• Full-year 2025 net sales increased 6.2% to $482.0 million, with gross margin expansion of 150 basis points and net income up 95.6% to $22.3 million.

• Adjusted net income for 2025 was $24.5 million, or $3.26 per diluted share, up from $19.0 million, or $2.54 per diluted share, in 2024.

• Operational agility in supply chain and diversified sourcing offset tariff impacts, positioning for future margin tailwinds and growth.

• Board authorized a new $7.5 million share repurchase program, replacing the previous plan.

Financial highlights

• Q4 gross margin: 41.3% of net sales, down 20 bps year-over-year due to $8.3 million in tariffs and sourcing variances.

• Q4 operating expenses: $48.1 million (34.5% of net sales); adjusted operating expenses: $47.4 million (34.0% of net sales).

• Q4 GAAP net income: $6.5 million ($0.86 per diluted share); adjusted net income: $7.2 million ($0.94 per diluted share).

• Full-year gross margin improved to 40.9% of net sales, driven by higher wholesale margins and retail mix.

• Interest expense for 2025 was $10.0 million, down from $17.0 million in 2024, reflecting lower rates and debt.

Outlook and guidance

• 2026 revenue expected to grow ~6%, with retail segment outpacing wholesale and gross margins forecasted to remain similar to 2025 despite ~$10 million in tariffs, mostly impacting H1 2026.

• SG&A to rise in dollars due to increased marketing, but expected to leverage by 80 bps as a percentage of revenue.

• Interest expense to decline modestly; estimated tax rate of 21.5%; EPS growth projected in the low teens percentage.

• All earnings growth expected in H2 2026, primarily Q4, due to front-loaded tariff impact.

• Management expects to capitalize on growth opportunities in 2026, citing strong brand momentum and diversified sourcing to offset tariffs.