Rocky Brands, a leading manufacturer of outdoor, work, western, duty, and military footwear, has reported a 25 per cent decrease in net sales to $461.8 million in fiscal 2023 (FY23) compared to $615.5 million in FY22. The adjusted net sales also saw a 24.3 per cent decrease.

In FY23, the wholesale segment experienced a 30.5 per cent decrease in sales, dropping to $337.0 million from $484.8 million in FY22. However, the retail segment reported a slight increase of 1.4 per cent, reaching $117.0 million up from $115.4 million. The contract manufacturing segment, including military contracts and private label programs, saw a significant decrease of 48.4 per cent to $7.9 million from $15.3 million, the company said in a press release.

Gross margin for FY23 improved to $178.6 million, or 38.7 per cent of net sales, up from 36.6 per cent in FY22. Adjusted gross margins also saw an increase to 38.9 per cent. Operating expenses decreased to $143.2 million, or 31.0 per cent of net sales, from $181.2 million or 29.4 per cent of net sales in FY22. Income from operations increased to 7.7 per cent of net sales compared to 7.2 per cent in the previous year.

Net income for FY23 was reported at $10.4 million, or $1.41 per diluted share, a decrease from $20.5 million, or $2.78 per diluted share in FY22. Adjusted net income also saw a decrease to $14.3 million, or $1.93 per diluted share, from $24.1 million, or $3.27 per diluted share.

The fourth quarter of FY23 also saw a decrease in net sales by 9.3 per cent to $126.0 million from $138.9 million in Q4 FY22. The wholesale segment's sales decreased by 13.3 per cent, while retail segment sales increased by 1.5 per cent. Contract Manufacturing segment sales decreased by 14.9 per cent.

Despite the sales downturn, gross margin for Q4 FY23 was $50.7 million, or 40.3 per cent of net sales, with income from operations at $14.7 million, or 11.7 per cent of net sales. The fourth quarter net income stood at $6.7 million, or $0.91 per diluted share, slightly higher than the previous year's $6.5 million, or $0.89 per diluted share.

"We are encouraged with our fourth quarter performance as we navigated top-line headwinds and delivered operating income that was ahead of our expectations," said Jason Brooks, chairman, president and chief executive officer. "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."

Fibre2Fashion News Desk (DP)

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