ROCKY BRANDS (RCKY)

• Rocky Brands is on track to deliver its 2025 guidance of 4%-5% revenue growth and approximately 10% earnings growth, despite a $12 million tariff impact in the second half of the year.
• The company anticipates achieving gross margins greater than pre-tariff levels in the second half of 2026, driven by lower costs, a favorable brand mix from high-margin brands like XTRATUF and Muck, and growth in online and Lehigh sales.
• Growth in 2026 is expected to be higher than the historical mid-single-digit range, primarily fueled by the expanding XTRATUF brand, increased e-commerce, and the consistently growing Lehigh business, which is also venturing into prescription safety glasses.
• Rocky Brands plans to make incremental investments in digital marketing to support brand growth and aims to reduce inventory units by $10 million-$15 million in 2026 while continuing to pay down debt.

Rocky Brands (RCKY) provided an update on its performance and outlook at the 28th Annual ICR Conference 2026.

• Rocky Brands is on track to deliver its guided results for FY 2025, including revenue growth of 4%-5% and approximately 10% earnings growth.
• The company navigated significant tariff impacts in 2025, with a $2 million impact in Q3 and a guided $10 million impact in Q4, and approximately $20 million in tariffs on the balance sheet at the end of Q3. Mitigation strategies included pricing increases and resourcing products.
• Management expects gross margins in the last half of 2026 to exceed pre-tariff levels, driven by lower costs, a favorable brand mix from high-margin brands like XTRATUF and Muck, and growth in e-commerce and the capital-light Lehigh business.
• Due to strong growth in XTRATUF, the e-commerce business, and Lehigh, the company anticipates increasing its historical mid-single-digit annual growth model for 2026.

• Rocky Brands is on track to meet its 2025 guidance of 4%-5% revenue growth and approximately 10% earnings growth.
• To mitigate 2025 tariff impacts (which were $2 million in Q3 and guided $10 million in Q4), the company implemented pricing increases and shifted production to facilities in the Dominican Republic and Puerto Rico.
• Management expects gross margins in the second half of 2026 to surpass pre-tariff levels, driven by lower costs, a favorable brand mix (with XTRATUF and Muck having the highest margins), and growth in higher-margin e-commerce and Lehigh segments.
• Key growth drivers include the rapidly expanding XTRATUF and Muck brands, and the Lehigh business, which has achieved low double-digit growth over the past five years and is expanding into prescription safety glasses in 2026.
• The company anticipates raising its annual growth model in 2026 beyond its historical mid-single-digit range, fueled by the performance of XTRATUF, e-commerce, and Lehigh.

• Rocky Brands reported strong Q3 2025 results with net sales increasing 7% to $122.5 million and adjusted diluted EPS rising 34% to $1.03 compared to the prior year. Gross profit was $49.3 million, or 40.2% of net sales, an improvement of 210 basis points.
• The company reiterated its full-year 2025 guidance, expecting revenue to increase 4% to 5% and EPS to increase approximately 10% over last year's $2.54.
• Rocky Brands is actively diversifying its sourcing base and increasing in-house production to mitigate the impact of higher tariffs, projecting 50% of inventory needs manufactured in-house by 2026.
• Higher tariffs are expected to significantly pressure gross margins in Q4 2025, with approximately $10 million flowing through the P&L, but gross margins are anticipated to return to the high 30s/low 40s % range in the second half of 2026.

• Rocky Brands reported strong Q3 2025 results with net sales increasing 7% to $122.5 million and adjusted diluted EPS rising 34% to $1.03.
• Gross margins improved by 210 basis points to 40.2% of net sales, despite 160 basis points of pressure from higher tariffs.
• The company is actively diversifying its sourcing, projecting 50% of 2026 inventory needs to be manufactured in-house (up from 30% in 2025), to abate tariff headwinds by mid-2026.
• Management expects Q4 2025 to be the "worst quarter from a tariff perspective," with approximately $10 million in incremental tariffs impacting the P&L, but anticipates gross margins to recover to the high 30s/low 40s % range in the second half of 2026.
• Full-year 2025 guidance was reiterated, projecting revenue growth of 4% to 5% and EPS growth of approximately 10% over 2024's $2.54.

• Rocky Brands reported a 7% increase in net sales to $122.5 million and adjusted diluted EPS of $1.03, a 34% increase, for Q3 2025. Gross margins improved by 210 basis points to 40.2% of net sales.
• The company is actively diversifying its sourcing base, including increasing in-house production to 50% of inventory needs in 2026 (up from 30% in 2025), and shifting third-party manufacturing away from China and Vietnam to mitigate higher tariffs. These actions are expected to help gross margins return to the high 30s, low 40s% range in the second half of 2026.
• Inventories at the end of Q3 2025 were $193.6 million, up 12.7% year-over-year, with approximately $17 million of the increase attributed to higher tariffs. $10 million of this tariff impact is expected to flow through the P&L in Q4 2025, with the remainder in the first half of 2026.
• For the full year 2025, Rocky Brands reiterated its guidance, expecting revenue to increase between 4% to 5% compared to 2024 levels, and EPS to increase approximately 10% over last year's $2.54. Full-year gross margins are projected to be down approximately 70 basis points to between 38% and 39%.
• Brand performance was strong for XTRATUF and Muck, with Georgia Boot and Rocky Work/Outdoor also showing solid growth, while Durango sales were down year-over-year in Q3 due to pulled-forward orders.

• Rocky Brands, Inc. reported net sales of $122.5 million for Q3 2025, an increase of 7.0% compared to the prior year quarter.
• Net income for Q3 2025 increased 36.6% to $7.2 million, or $0.96 per diluted share, compared to $5.3 million, or $0.70 per diluted share, in Q3 2024.
• Adjusted net income rose 33.4% to $7.8 million, or $1.03 per diluted share, in Q3 2025, up from $5.8 million, or $0.77 per diluted share, in the year-ago period.
• Gross margin improved by 210-basis points to 40.2% of net sales in Q3 2025.
• Total debt as of September 30, 2025, was $139.0 million, representing a 7.5% decrease compared to September 30, 2024.

• Rocky Brands, Inc. reported net sales of $122.5 million for the third quarter ended September 30, 2025, an increase of 7.0% compared to the year-ago quarter.
• Net income for Q3 2025 increased 36.6% to $7.2 million, or $0.96 per diluted share, compared to $5.3 million, or $0.70 per diluted share, in the third quarter of 2024.
• Adjusted net income for Q3 2025 rose 33.4% to $7.8 million, or $1.03 per diluted share, compared to $5.8 million, or $0.77 per diluted share, in the year-ago period.
• Gross margin improved by 210-basis points to 40.2% of net sales in Q3 2025, up from 38.1% in the prior year.
• Total debt as of September 30, 2025, was $139.0 million (net of unamortized debt issuance costs), representing a 7.5% decrease compared to September 30, 2024.