Rocky Brands records loss in Q2, military segment thrives
Rocky Brands reported its second quarter 2016 results on Thursday, which was a difficult period for the company.
Retail sales and wholesale sales decreased 2% and 23% respectively, and net sales dropped to $62.6 million from $68.6 million in the previous second quarter. Military segment sales increased 139% to $10.7 million compared to $4.5 million in the prior year.
Elevated inventories negatively impacted the company’s wholesale business, according to David Sharp, President and Chief Executive Officer of Rocky Brands. He added, “Softening of local economies, especially those where oil and gas exploration had been significant, and weak store traffic across retail contributed to our poor performance.”
The Military segment offset the wholesale sales decline, but the increase in military footwear production to meet demand added costs.
The company recorded a net loss of $1.8 million, or $0.23 per diluted share compared to net income of $2.0 million, or $0.26 per diluted share in 2015.
SG&A expenses decreased $0.6 million to $18.8 million due primarily to lower variable expenses associated with the decrease in wholesale sales. Gross margin was $16.3 million, or 26% of sales, compared to $22.6 million, or 33% of sales, in the prior comparable period.
Rocky Brands’ funded debt decreased 34% to $23.5 million versus $35.6 million in the prior year.
Sharp closed saying, “While we are disappointed in our recent results, we continue to be confident that the strategic course we’ve set for the company will lead to improved profitability and greater shareholder value over the long-term.”
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