US' Rocky Brands Q2 profit hits $3.6 mn; bookings strong for H2

Gross margin expanded by 230 basis points to 41 per cent of net sales, compared to 38.7 per cent in the second quarter of 2024 (Q2 2024). The improvement was led by stronger margins in the wholesale segment and a favourable mix from higher-margin retail sales, Rocky Brands said in a release.

“We executed well during the second quarter, capitalising on the strength of our brand portfolio and the benefits of our diversified manufacturing and sourcing base to deliver results that well exceeded last year and expectations. The drivers of our top-line performance were broad based and led by XTRATUF, as demand for the brand in our Wholesale and e-commerce channels accelerated, along with Muck, which posted its strongest growth in several quarters. We were particularly pleased with the strong full-price selling we experienced, which, combined with our nimble supply chain and recent pricing actions, contributed to a 230-basis point increase in gross margins and significant improvement in profitability,” said Jason Brooks, chairman, president and chief executive officer.

Income from operations rose 58.7 per cent to $7.2 million, or 6.8 per cent of net sales, from $4.5 million a year ago. Adjusted operating income reached $7.8 million, or 7.4 per cent of net sales, compared to $5.2 million, or 5.3 per cent, in the prior-year quarter.

Interest expense fell to $2.5 million from $6.1 million in Q2 2024, which included a one-time $2.6 million loan extinguishment and reduced interest rates following the April 2024 refinancing contributed to the year-on-year (YoY) decline in finance costs. Excluding the one-time charge, interest expense was down from $3.5 million in the prior-year period.

Net income for the second quarter of 2025 stood at $3.6 million, or $0.48 per diluted share, marking a turnaround from a net loss of $1.2 million, or $0.17 per diluted share, in Q2 2024. Adjusted net income rose sharply to $4.1 million, or $0.55 per diluted share, compared to $1.3 million, or $0.17 per diluted share, a year ago.

Operating expenses totalled $36.1 million, or 34.2 per cent of net sales, slightly up from $33.5 million, or 34.1 per cent, in the year-ago quarter. On an adjusted basis—excluding $0.7 million in acquisition-related amortisation—operating expenses were 33.5 per cent of net sales, broadly in line with the prior-year’s 33.4 per cent. The increase was largely attributed to higher selling and marketing costs tied to the brand’s expanding direct-to-consumer operations.

Inventory levels as of June 30, 2025, rose 6.8 per cent compared to the same date last year. Total debt declined 13.1 per cent YoY.

“Looking ahead, we are approaching the remainder of 2025 with optimism about the momentum in our business coupled with the appropriate level of caution given the overall market uncertainty. Bookings for our US Wholesale business for the second half are up solidly year-over-year, and we’ve enacted plans including leveraging our manufacturing facilities in the Dominican Republic and Puerto Rico to mitigate the impact from higher tariffs. While visibility into consumer demand is currently more challenging, we believe we are well positioned to navigate the current macroeconomic backdrop and continue delivering value for our shareholders over the near and long-term,” Brooks continued.

ALCHEMPro News Desk (HU)