Rocky Brands Inc. is moving quickly to mitigate the impact from tariffs.<\/p>\n
\u201cWhile the situation is very fluid and the outcome of ongoing negotiations is uncertain, we moved quickly to mitigate the impact of the higher tariffs and believe we have a sound plan in place to protect our gross profit dollars under multiple scenarios,\u201d Jason S. Brooks, chairman, president and CEO, told investors in a first quarter earnings conference call Tuesday. \u201cBased on current tariff rates, we expect to implement price increases on the majority of our footwear styles in early June and will maintain flexibility to adjust prices accordingly based on any future changes as they are announced.\u201d<\/p>\n
He said the company is also \u201caccelerating\u201d its efforts to reduce the amount of products sourced from China. \u201cThis includes more footwear from partners in Vietnam, Cambodia, India, and as well, shifting production to our manufacturing facilities in the Dominican Republic and Puerto Rico,\u201d Brooks said. <\/p>\n
As for the higher prices and impact on consumer spending, Brooks said: \u201cWhile we anticipate that higher prices will put some pressure on the consumer demand, we believe the strength of our brands and the functionality of our products, along with our diversified sourcing structure, has us well positioned to navigate [the] current situation and allow us to achieve our financial targets for the year.\u201d <\/p>\n
Brooks said the company \u201chasn\u2019t seen anything crazy from our retail partners\u201d regarding possible price increases, and he said that while odd, \u201cthe consumer doesn\u2019t seem to be freaking out about this right now.\u201d <\/p>\n
Thomas D. Robertson, chief operating and chief financial officer, said on the call that the company has about six or seven month, on average, of products to sell through in 2025.<\/p>\n
\u201cWe will be able to get through the majority of this year without feeling a lot of the pain from the tariffs yet. And it\u2019s also going to give us ample time to transition product out of China and into Vietnam, India, Cambodia, and then also to transition to our own manufacturing facilities in Dominican Republic and Puerto Rico,\u201d he said.<\/p>\n
Robertson said the total volume out of China is expected to be \u201cjust less than 20 percent by the end of this year,\u201d clarifying that some of the product lines from China will be leveraged for shipment to Rocky\u2019s international operations. <\/p>\n
He also said that the company isn\u2019t prepared to share information about the price increases, although there\u2019s been \u201ca lot of analysis on it,\u201d since it is still waiting to see what other actions might occur this week in regarding to China tariffs. \u201cSo, we certainly welcome a reduction in the Chinese tariffs, but we\u2019ll be announcing a price increase here \u2014 regardless of any changes with the Chinese tariffs over the next week or two \u2014 to go into effect in June,\u201d Robertson said.<\/p>\n
He added that the price increases are aimed at preserving gross profit dollars, and the plan is to cost average inventory on hand with inventory that will be coming in at a higher tariff, and take into account sourcing and manufacturing changes. That should result in a price increase \u201cthat\u2019s going to not slowdown retail very much,\u201d he said.<\/p>\n
Robertson also said the company is monitoring what its peers are doing, but said it seems many are waiting to see what happens<\/a> with tariffs and that many, \u201cincluding ourselves in some cases, [have] paused inventory coming from China.\u201d <\/p>\n Robertson also said the company is \u201ctrying to speculate\u201d about whether there will be a scarcity of product on the shelves later this year when less inventory is flowing at a time when it normally builds inventory for fall and for holiday. And while he said it will be interesting to see how that plays out, Robertson said its facility in the Dominican Republic, where it has been making boots for over 40 years, will allow it to ramp production there.<\/p>\n Net income for the first quarter ended March 31 rose 93.8 percent to $4.9 million, or 66 cents a diluted share, from $2.6 million, or 34 cents, in the same year-ago period. On an adjusted basis, net income was $5.5 million, or 73 cents a diluted share, versus $3.1 million, or 41 cents, a year ago. Net sales were up 1 percent to $114.1 million from $112.9 million.<\/p>\n Rocky\u2019s brands include the Western boot brand Durango<\/a>, as well as well as a number of rugged, workwear boot brands<\/a> that include Rocky, Georgia Boot The Original Muck Boot Co., Xtratuf, Ranger, Lehigh, Shoe Angel, and Slipgrips.<\/p>\n Describing 2024 as \u201cexceptional\u201d for the Durango brand, Brooks said the sell-in to wholesale moderated in the first quarter due in part to difficult comparisons and timing shifts, including some first quarter orders being delivered early in late 2024. \u201cWe did see some underlying strength, particularly online and with our at-once business, which was positive for the quarter,\u201d the CEO said, adding that \u201clarge volume orders in the back half of 2025\u201d are expected as retailers optimize their inventory levels. <\/p>\n Brooks said the longer winter season provided extended opportunities for the sale of insulated boots. The winter weather also helped its Muck brand, which saw an uptick in the brand\u2019s performance, with the CEO citing a double-digit increase in the quarter in its women\u2019s business. <\/p>\n The company said gross margin rose 210 basis points to 41.2 percent of net sales versus 39.1 percent a year ago. It noted that inventories rose 6.3 percent at quarter-end, while debt was down 17.5 percent from year-ago levels. Brooks said the company\u2019s refinancing in April last year resulted in a \u201csignificant reduction in interest expense\u201d as the company continues to pay down its debt.<\/p>\n","protected":false},"excerpt":{"rendered":" Rocky Brands Inc. is moving quickly to mitigate the impact from tariffs. \u201cWhile the situation is very fluid and the outcome of ongoing negotiations is uncertain, we moved quickly to mitigate the impact of the higher tariffs and believe we have a sound plan in place to protect our gross profit dollars under multiple scenarios,\u201d…<\/p>\n","protected":false},"author":1,"featured_media":488,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[14],"tags":[],"_links":{"self":[{"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/posts\/486"}],"collection":[{"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/comments?post=486"}],"version-history":[{"count":1,"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/posts\/486\/revisions"}],"predecessor-version":[{"id":487,"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/posts\/486\/revisions\/487"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/media\/488"}],"wp:attachment":[{"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/media?parent=486"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/categories?post=486"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/tags?post=486"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}