Rocky Brands disappointed by fiscal year performance, posts $2.1 million net loss
Rocky Brands on Thursday reported its fourth quarter and full year 2016 results. Mike Brooks, Rocky Brands CEO, said the full year results were “disappointing”, decreasing 3.4% to $260.3 million from $269.3 million in the previous year. However, the company is taking steps to improve its earnings power, including “reorganizing our sales teams and reducing headcount in order to lower our expense structure," Brooks said.
“We also improved the efficiency of our expanded domestic manufacturing facility which allows us to more profitably capitalize on the growing demand for military footwear. In addition, we recently signed a licensing agreement for the Creative Recreation brand in Europe that will help enhance our overall margins," he added.
The company incurred a net loss of $2.1 million, or ($0.29) per diluted share for the year, compared to net income of $6.6 million, or $0.87 per diluted share, in the prior year.
Fourth quarter sales increased 2.6% to $67 million, benefitting from the military segment that increased 106.4% to $10.9 million from $5.3 million in the previous year. The company secured a one-year military contract for “Hot Weather” combat boots in the quarter, which tacked onto its previous contract from February 2013.
In addition, retail sales increased slightly to $13.7 million from $13.5 million in the previous year, and wholesale sales fell 8.9% to $42.4 million.
Gross margin fell 140 basis points driven by the higher percentage of military sales, which carry lower gross margins than wholesale and retail, and SG&A expenses fell 120 basis points to 29.8% of net sales.
Brooks concluded, “As 2017 gets underway, I’m confident that the changes we’ve made to our operating strategies and leadership team in response to the challenges of the past 12-months have made us a stronger organization and better positions Rocky Brands to return greater value to its shareholders over the long-term.”
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