Rocky Brands, Inc.

Reported net sales increased 12% year over year to $118.4 million. Gross profit was $60.8 million, or 51.4% of sales, versus $43.3 million, or 41.0% a year ago. Reported GAAP net income was $13.9 million, or $1.83 per diluted share, versus $3.6 million, or $0.48 per diluted share last year; adjusted net income was $14.4 million, or $1.90 per share, versus $4.1 million, or $0.55 per share. Excluding the net tariff impact of $15 million, second-quarter gross margin was approximately 38.7%. Cash and cash equivalents were $2.6 million, debt net of unamortized issuance costs was $122.4 million, and inventories were $173.5 million, down 7.1% year over year. Management raised 2026 guidance to revenue growth of approximately 8.5% over 2025, with Q4 expected to grow modestly faster than Q3. Gross margin is now expected to be approximately 40% excluding the actual and expected tariff refund, with Q3 and Q4 improving sequentially into the low 40% range. EPS excluding the tariff refund is expected to be similar to last year’s $3.26, reported EPS is expected to be around $5, and net EPS excluding the refund and incremental tariffs is expected to be around $4.

Jason Brooks emphasized that the quarter reflected broad-based momentum across the portfolio, led by XTRATUF, Georgia, Rocky, and Lehigh. He pointed to strong direct-to-consumer performance, better wholesale sell-through, and unusually strong bookings for the second half, while also noting that the company is balancing optimism with caution because of tariff shifts and consumer uncertainty. He said Rocky is still pursuing more production in the Dominican Republic, but near-term demand has forced the company to source faster to meet orders.

Tom Robertson highlighted that Q2 sales growth of 12% was the strongest since 2022 and said gross margins reached a record level because of the IEEPA refund receivable. He quantified the tariff benefit as $15 million net in Q2, with $18 million of actual and expected refunds partially offset by about $3 million of tariff costs, and said the full-year gross benefit should be about $20 million, or $10 million net. He also cited a $1.1 million accounts receivable write-off tied to a customer bankruptcy, roughly 80 basis points of freight pressure as a percent of sales, inventories of $173.5 million, and debt of $122.4 million; the company repurchased about 54 thousand shares for $2 million and raised the quarterly dividend to $0.17.

Analysts focused on what was driving the acceleration, how much of the second-half outlook is backed by new doors versus existing accounts, and how much shelf-space gains required promotional spend or extra cost. Management said growth was broad-based across brands, bookings are up across all brands, and DTC investments are driving more volume and traffic than expected. On costs, they said freight, expedited shipping, and sourcing changes are pressuring margins, while new tariffs may not fully hit until late 2026 or early 2027, which is still being evaluated before deciding on 2027 pricing.