Rocky Brands, Inc, a leading designer, manufacturer, and marketer of premium quality footwear and apparel, has reported net sales of $110.4 million in the first quarter (Q1) of fiscal 2023 (FY23), a decline of 33.9 per cent compared to $167 million for the same period last year.

Wholesale sales also decreased in Q1 FY23, dropping by 40.2 per cent to $80.1 million from $134 million for the same period in FY22. However, the retail segment managed to grow by 3.1 per cent, with sales reaching $29.5 million compared to $28.6 million last year. Contract manufacturing sales were $0.9 million in the first quarter of FY23 compared to $4.4 million in the prior year period, the company said in a press release.

Despite the decline in net sales, Rocky Brands reported an improvement in gross margin. The company's gross margin for the first quarter of FY23 was $43.8 million, or 39.6 per cent of net sales, compared to $62.8 million, or 37.6 per cent of net sales, for the same period last year.

However, operating expenses increased as a percentage of net sales. Operating expenses were $39.6 million, or 35.9 per cent of net sales, for Q1 FY23 compared to $49.6 million, or 29.7 per cent of net sales, for Q1 FY22. Adjusted operating expenses were 35.2 per cent in Q1 FY23 compared with 29.1 per cent in the year-ago period.

The company's income from operations for Q1 FY23 was $4.2 million, or 3.8 per cent of net sales, compared to $13.2 million or 7.9 per cent of net sales for the same period a year ago. Adjusted operating income for Q1 FY23 was $4.9 million, or 4.5 per cent of net sales, compared to adjusted operating income of $14.2 million, or 8.5 per cent of net sales in Q1 FY22.

Rocky Brands reported a first-quarter net loss of $0.4 million, or $0.05 per diluted share compared to net income of $7.3 million, or $0.99 per diluted share in Q1 FY22. Adjusted net loss for the first quarter of FY23 was $0.8 million, or $0.12 per diluted share, compared to adjusted net income of $8.2 million, or $1.10 per diluted share in the year-ago period, the release added.

“Consumer demand for our brands remains healthy and our gross margins are up significantly year-over-year despite some industry headwinds that are pressuring our top-line,” said Jason Brooks, chairman, president, and chief executive officer. “We experienced positive sell-through with many of our key accounts during the first quarter. Unfortunately, our wholesale performance didn’t translate into increased sell-in as many of our retail partners are in the process of working down elevated inventory levels and have recently adopted a more cautious approach to reorders due to the current economic backdrop.”

Fibre2Fashion News Desk (DP)

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