On July 30, 2024, Rocky Brands Inc (RCKY, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. Rocky Brands Inc, a designer, manufacturer, and marketer of premium-quality footwear and apparel, operates through three business segments: Wholesale, Retail, and Contract, with the majority of revenue generated from the Wholesale segment.
Performance Overview
Rocky Brands Inc reported net sales of $98.3 million for Q2 2024, a slight decrease of 1.6% from $99.8 million in the same quarter last year. However, excluding non-recurring sales from the previous year, net sales increased by 6.1%. The company posted a net loss of $1.2 million, or $0.17 per diluted share, compared to a net loss of $2.7 million, or $0.37 per diluted share, in Q2 2023. Adjusted net income was $1.3 million, or $0.17 per diluted share, missing the analyst estimate of $0.22 per share.
Key Financial Achievements
Despite the challenges, Rocky Brands Inc achieved significant milestones:
- Operating income increased by 104.7% to $4.5 million from the year-ago quarter.
- Gross margin improved to 38.7% of net sales, up from 37.6% in Q2 2023.
- Inventories decreased by 20.0% year-over-year.
- Total debt decreased by 31.3% year-over-year.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $98.3 million | $99.8 million |
| Gross Margin | $38.0 million | $37.6 million |
| Operating Income | $4.5 million | $2.2 million |
| Net Loss | $(1.2) million | $(2.7) million |
| Adjusted Net Income | $1.3 million | $0.0 million |
Balance Sheet and Cash Flow
Rocky Brands Inc reported cash and cash equivalents of $4.1 million as of June 30, 2024, compared to $3.1 million a year ago. Inventories were $175.0 million, down from $218.3 million in the previous year. Total debt stood at $152.4 million, a significant reduction from $217.1 million a year ago.
Commentary and Analysis
Jason Brooks, Chairman, President, and Chief Executive Officer, commented, “We continue to effectively navigate an unpredictable consumer environment thanks to our diversified brand portfolio and recently deployed cost-saving initiatives. Strong double-digit gains in sales for our Durango and XTRATUF brands in both our wholesale and e-commerce channels helped offset softness in other areas of our business and generated low-single digit year-over-year recurring sales growth.”
The company's performance in Q2 2024 reflects its strategic efforts to streamline operations and reduce debt. The improvement in gross margin and operating income indicates effective cost management and operational efficiency. However, the slight decline in net sales and the net loss highlight ongoing challenges in the market environment.
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Explore the complete 8-K earnings release (here) from Rocky Brands Inc for further details.
