“We are encouraged with our fourth quarter performance, as we navigated top-line headwinds and delivered operating income that was ahead of our expectations. Despite market softness towards the end of December, the late arrival of certain materials that pushed back our manufacturing and shipment schedules, and the transition to a distributor model in Canada in early November, net sales improved from the third quarter with year-over-year declines moderating to their lowest levels in 2023”, commented Jason Brooks, Chairman, President and Chief Executive Officer.

Fourth Quarter Results

In the fourth quarter of fiscal 2023, Rocky Brands’ net sales totalled 126.0 million US dollars, decreasing by 9.3% on a comparable basis to the same period of the previous year.

In this period, the wholesale segment contributed 85.8 million US dollars to the company’s total sales, down by 13.3% year-over-year, while the retail segment added 37.8 million US dollars, up by 1.5% year-over-year. Additionally, the contract manufacturing segment recorded a sales decline of 14.9% year-over-year to 2.3 million US dollars, “due to the expiration of certain contracts with the US Military”.  

Rocky Brands’s last year’s fourth quarter gross margin slightly contracted to 40.3% from 40.8% in a similar period of fiscal 2022.

The US company reported a better-than-expected operating income of 14.7 million US dollars in the last quarter of 2023, as compared to 13.6 million US dollars in the same quarter of the previous year. Adjusted operating income rose to 15.5 million US dollars in this period from 15.3 million US dollars in the fourth quarter of 2022.

In the three months to the 31^st of December, Rocky Brands’ net income amounted to 6.7 million US dollars, or 0.91 US dollars per diluted share, on a comparable basis to a net income of 6.5 million US dollars, or 0.89 US dollars per diluted share in the same quarter of 2022.

Fourth quarter adjusted net income was 7.3 million US dollars, or 0.98 US dollars per diluted share, as compared to an adjusted net income of 7.9 million US dollars, or 1.08 US dollars per diluted share, in a similar period of the prior year.

Full Year Results

Rocky Brands posted a net sales decrease of 25.0% in 2023 to 461.8 million US dollars, on a comparable basis to the previous fiscal year. Adjusted net sales, instead, which exclude returns associated with a supplier-related dispute in the second quarter of 2023 and the sale of inventory related to the divestiture of the NEOS brand during the third quarter of 2022, were down by 24.3% year-on-year.

The company’s last fiscal year’s net income amounted to 10.4 million US dollars, or 1.41 US dollars per diluted share, as compared to a net income of 20.5 million US dollars, or 2.78 US dollars per diluted share in 2022. Adjusted net income in 2023 was 14.3 million US dollars, or 1.93 US dollars per diluted share, on a comparable basis to a net income of 24.1 million US dollars, or 3.27 US dollars per diluted share, in the prior year.