Rocky Brands, Inc. reported a significant increase in financial performance for the second quarter and first half of 2026, as detailed in its latest 10-Q filing. For the three months ended June 30, 2026, the company achieved net sales of $118.4 million, a 12.0% increase from $105.6 million in the same period of 2025. The gross margin also improved, reaching $60.8 million or 51.4% of net sales, compared to $43.3 million or 41.0% in the prior year. For the first half of 2026, net sales totaled $242.8 million, up 10.5% from $219.7 million in the first half of 2025, with a gross margin of $106.2 million, representing 43.8% of net sales.
The company's profitability metrics also showed marked improvement. Net income for the second quarter was $13.9 million, or $1.83 per diluted share, compared to $3.6 million, or $0.48 per diluted share, in the prior year. For the first half, net income rose to $15.1 million, or $1.99 per diluted share, from $8.6 million, or $1.14 per diluted share, in the same period of 2025. The increase in profitability was attributed to higher sales across all segments, particularly in Retail, which experienced double-digit growth driven by enhanced digital marketing efforts and an expanded customer base.
Operationally, Rocky Brands reported a decrease in inventory levels, which fell by 7.1% to $173.5 million as of June 30, 2026, compared to $186.8 million a year earlier. This reduction was part of the company's strategy to optimize inventory by reducing discontinued product levels. The company also noted a decline in total debt, which decreased by 7.6% to $122.4 million, reflecting ongoing debt repayments and improved cash flow from operations, which amounted to $9.7 million for the first half of 2026, up from $2.0 million in the prior year.
Strategically, Rocky Brands has been proactive in navigating the evolving macroeconomic landscape, particularly concerning tariffs. The company recognized a benefit of $18.0 million from expected refunds related to IEEPA tariffs, which positively impacted its cost of goods sold. This recognition contributed to the improved gross margins reported for both the second quarter and first half of 2026. The company continues to monitor changes in trade policies and has implemented various strategies to mitigate potential impacts, including adjusting product pricing and sourcing strategies.
Looking ahead, Rocky Brands remains optimistic about its growth trajectory, supported by its strong brand portfolio and strategic initiatives. The company plans to continue leveraging its digital platforms and expanding its market presence while maintaining a focus on operational efficiency. The management expressed confidence in the company's ability to sustain its financial performance and navigate the challenges posed by the current economic environment.
About ROCKY BRANDS, INC.
Rocky Brands, Inc. designs, manufactures, and markets premium footwear and apparel under brands like Muck, Rocky, Georgia Boot, Durango, Lehigh, XTRATUF, Ranger, and licensed Michelin. Serving work, outdoor, western, military, and duty markets, it distributes products globally through wholesale, retail, and contract manufacturing channels. The company emphasizes brand strength, product innovation, and diverse sourcing to deliver durable, high-quality products to a broad customer base.
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