Rocky Brands (NASDAQ:RCKY) capped fiscal 2025 with what management called its “highest quarterly growth rate of the year,” driven by surging direct-to-consumer demand during the holiday season and continued strength in key brands including XTRATUF and Muck. On the company’s fourth-quarter 2025 earnings call, CEO Jason Brooks and Chief Operating and Chief Financial Officer Tom Robertson highlighted a 9% increase in quarterly net sales and reiterated that supply chain flexibility and in-house manufacturing helped offset a meaningful portion of higher tariff costs.
Fourth-quarter sales rise 9% as retail jumps more than 30%
Rocky Brands reported fourth-quarter net sales of $139.7 million, up 9.1% year-over-year, which Robertson said was both the company’s highest growth rate of the year and its highest quarterly growth rate in more than three years.
Brooks said the company went into the quarter “pretty confident” in its seasonal positioning and marketing plans, but ultimately saw sales come in “significantly higher” than expected, with XTRATUF and Muck outperforming internal expectations. Management also noted weather as a supportive factor in the quarter.
Brand and channel highlights: XTRATUF and Muck lead, e-commerce stands out
In his prepared remarks, Brooks detailed performance across brands and channels, repeatedly pointing to strength in e-commerce—particularly the company’s owned branded websites.
- XTRATUF: Management called it the company’s fastest-growing brand, with strength across channels led by e-commerce growth that was “almost triple digits.” Wholesale grew on demand from big box, outdoor specialty, and regional partners in the Southeast and Pacific Northwest. Brooks highlighted strong sales in core Ankle Deck Boots, momentum in a new cold weather collection featuring fleece-lined versions of the Ankle Deck Boot, and a well-received Sesame Street licensed launch that added to growth in the kids business.
- Muck: Sales increased in the “low 20% range.” Growth was driven by the brand’s website (up “mid-double digits”) and marketplace volumes that “more than doubled,” aided in part by two “Good Morning America” deals-and-steals events. Management also cited a stronger inventory position versus 2024, execution around National Muck Day in early October, favorable weather in early December, and continued demand. Women’s product performed well, led by the Arctic Sport II series and the women’s original series, with strength also noted in men’s Arctic products and kids offerings.
- Durango: Brooks said the brand saw good performance in December, particularly in farm and ranch accounts, supported by wet and snowy weather. However, softness in the key account base year-over-year was tied to bulk buy timing and carryover inventory impacts on wholesale sell-in. Durango.com increased “low double digits,” with demand for legacy collections and new Shyloh series styles. Management said new men’s and women’s square toe series at key price points are being added for spring.
- Georgia Boot: The quarter was also described as “a tale of two channels,” with weaker wholesale results partially offset by strong double-digit e-commerce gains. Brooks cited strong offerings featuring the BOA lacing system, including the Carbon Flex Wedge, LTX Logger, and DuraBlend styles, and said the BOA Carbon Flex Wedge will be “prominently featured” at a major customer beginning in the first quarter of 2026.
- Rocky Work, Outdoor, and Western: The company benefited from “favorable boot weather” that supported insulated and waterproof product sales across brick-and-mortar and e-commerce. Brooks said the category finished full-year 2025 positively, reversing recent trends, with rugged outdoor up low double digits and work product up high single digits, supported by national e-commerce, rockyboots.com, and a mix of retailers.
- Commercial, military, and duty: Fourth-quarter sales were nearly in line with the prior year despite challenges from a 43-day government shutdown that affected military pay periods and Defense Logistics Agency operations. Brooks highlighted another double-digit sales increase for the Rocky Code Red Wildlands 77 fire boot.
Brooks said overall retail sales grew more than 30% in the quarter, fueled by branded websites, and noted that the B2B Lehigh business grew mid-single digits year-over-year. He also pointed to continued incremental growth from a partnership with Bollé Eyewear within the company’s prescription safety eyewear offering.
Margins: tariff headwinds offset by retail mix and retail margin gains
Gross profit in the fourth quarter was $57.7 million, or 41.3% of net sales, versus $53.2 million, or 41.5%, in the year-ago period. Robertson attributed the 20 basis-point decline in gross margin to $8.3 million in tariffs and sourcing variances, which he said mostly impacted wholesale margins. He also noted the amount was modestly below forecast because some of the headwind shifted into 2026 based on sales timing.
The tariff impact was “nearly offset” by higher retail segment gross margins and a higher mix of retail revenue. Segment gross margins were:
- Wholesale: 36.3% (down 220 basis points)
- Retail: 50.9% (up 170 basis points)
Contract manufacturing margins were slightly negative, which management tied to reduced economies of scale at the Puerto Rican manufacturing facility earlier in 2025; Robertson said margins are expected to normalize in 2026.
Earnings, expenses, and balance sheet
Operating expenses were $48.1 million, or 34.5% of net sales, compared with $44.7 million, or 34.9%, a year ago. On an adjusted basis, operating expenses rose to $47.4 million from $40.0 million, with the increase attributed to higher logistics costs from greater retail volume, increased marketing investments, and incentive compensation.
Income from operations was $9.6 million, or 6.9% of sales, compared to $8.5 million, or 6.6%, in the prior-year quarter. Adjusted operating income was $10.3 million (7.4% margin), down from $13.2 million (10.3% margin) a year ago.
Net income on a GAAP basis was $6.5 million, or $0.86 per diluted share, compared with $4.8 million, or $0.64, in the prior-year period. Adjusted net income was $7.2 million, or $0.94 per diluted share, compared with $8.9 million, or $1.19. Interest expense declined to $2.5 million from $3.0 million on lower debt levels and lower rates, while the quarterly tax rate was 6.3%, down from 12.1% due primarily to changes in state and local taxes and other discrete benefits recognized in 2025.
For the full year, net sales increased 6.2% to $482.0 million, with wholesale up 1%, retail up 20.5%, and contract manufacturing down 7.7%. Gross margin expanded 150 basis points to 40.9% even as the company absorbed about $10.9 million in IEEPA tariffs. Adjusted operating income increased 5.6% to $40.0 million (8.3% margin), and adjusted net income rose 29.4% to $24.5 million, with adjusted EPS up 28.3% to $3.26.
At year-end 2025, cash and cash equivalents were $2.9 million and debt totaled $122.6 million (net of amortized issuance costs), down 4.7% from the end of 2024. The company also returned $4.6 million to shareholders through quarterly dividends during 2025.
2026 outlook: about 6% revenue growth, tariffs to pressure first half
Looking to 2026, Robertson said the company entered the year with “good momentum” and expects revenue to increase approximately 6% over 2025, with retail growing faster than wholesale. Gross margins are forecast to be similar to 2025, but management expects tariff impacts to be concentrated early in the year, including roughly $10 million in IEEPA tariffs hitting the P&L in the first half, with 80% of that occurring in the first quarter.
SG&A is expected to rise in dollars as marketing investment increases, though management expects approximately 80 basis points of leverage as a percentage of revenue. Interest expense is expected to decline again, but more modestly than in 2025. With an estimated 2026 tax rate of 21.5%, Robertson said the outlook implies EPS percentage growth in the low teens, with earnings growth expected to be weighted to the second half—“primarily the fourth quarter”—due to the front-loaded tariff pressure.
In Q&A, management said early 2026 momentum has continued, with weather also supportive, and noted that the spring 2026 order book was up “pretty much across the board” with positive feedback on product. Robertson added that the company has modeled its margin outlook based on updated tariff assumptions discussed over a recent weekend, while noting uncertainty and ongoing monitoring, including continued efforts to optimize sourcing and leverage internal manufacturing as a competitive advantage.
About Rocky Brands (NASDAQ:RCKY)
Rocky Brands, Inc is a designer, manufacturer and marketer of premium footwear, apparel and accessories for a diverse range of end-users. The company serves outdoor enthusiasts, hardworking professionals and military personnel under a family of brands that includes Rocky, Georgia Boot, Durango and Xtratuf. Products span hunting and hiking boots, work and safety footwear, western and lifestyle boots, as well as performance socks and outerwear.
Rocky Brands operates multiple production and distribution facilities in North America, with its corporate headquarters located in Nelsonville, Ohio.
