Q2 2024 Rocky Brands Inc Earnings Call Transcript
Key Points
- Rocky Brands Inc (RCKY) exceeded expectations for the second quarter, driven by strong performance from Durango and Extra Tuff brands.
- The company achieved higher gross margins and lower operating expenses, contributing to improved earnings.
- Refinancing of debt and simplification of capital structure are projected to generate $4.4 million in annualized interest expense savings starting in 2025.
- Positive double-digit revenue gains were observed in the company's branded e-commerce sites, particularly for Extra Tuff, Durango, Georgia, and Rocky.
- The company reported a decrease in total debt by 12% since December 31st and 31.3% since June 30th of last year, indicating improved financial health.
- Net sales for the second quarter were down 1.6% compared to the same period last year.
- The work category, including the Georgia and Rocky Work brands, faced pressure due to over-inventory and conservative purchasing by smaller accounts.
- The unfavorable spring weather patterns led to slower retail turns for the Muck brand, impacting restocks late in the quarter.
- Rising ocean freight rates are expected to negatively impact gross margins for the remainder of the year.
- The commercial military duty segment experienced a decline, partly due to the delay in the military budget release for 2024.
Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Rocky Brands second quarter 2024 earnings conference call. (Operator Instructions) I would like to remind everyone that this conference call is being recorded.
And I will now turn the conference over to Cody McAlester of ICR.
Thank you, and thanks to everyone for joining us today. Before we begin, please note that a session, including the Q&A period, may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995.
Such statements are based on information and assumptions available at this time and are subject to changes risks and uncertainties, which may cause actual results to differ materially, and we assume no obligation to update such statements.
For a complete discussion of the risks and uncertainties, please refer in today's press release and our reports filed with the Securities and Exchange Commission, including our 10 K for the year ended December 31st, 2023.
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