Rocky Brands Q1 sales lift 9.6% on record $12m military segment sales
Rocky Brands on Thursday reported its first quarter results, which is described as a “solid start to 2017.”
Chairman and CEO Mike Brooks said that the company has taken steps in the past six months to be better positioned for profitable growth, including lowering the company’s expense structure (Brooks stated this in February, along with the fourth quarter and fiscal 2016 results).
Net sales for the quarter increased 9.6% to $63.1 million, contributed primarily by the growing military segment that increased 107% to a record $12 million. Rocky Brands began fulfilling orders of its one-year military contract for “Hot Weather” combat boots in the first quarter.
“We achieved approximately 10% top-line growth by more than doubling our military segment sales to a quarterly record $12 million,” said Brooks. “Importantly, we were able to fulfill this significant increase in military footwear demand at margins well above the last half of 2016 due to improved efficiencies at our company-operated production facility in Puerto Rico.”
Wholesale sales fell slightly from the previous first quarter to $39.2 million, but the segment has stabilized and improved year-over-year due to “a higher mix of full priced selling.”
Retail sales increased to $11.9 million from $11.5 million, partially offsetting the decrease in wholesale sales.
Net income also increased in the quarter to $1.5 million, or $0.20 per diluted share, compared to a net loss of $0.2 million in the previous first quarter.
Finally, Rocky Brands reduced its funded debt to $5.2 million from $21.6 million in the prior year, and income from operations was $2.4 million, or 3.8% of net sales. Gross margin increased to $19.7 million, or 31.3% of sales, and SG&A expenses decreased to $17.4 million, or 27.6% of net sales, partially due to workforce reductions.
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