Rocky Brands reported increased net sales and improved gross margins in Q3 2026 driven by growth in Wholesale and Retail segments and tariff refunds. Retail segment growth was supported by e-commerce and Lehigh CustomFit expansion. Operating expenses rose due to logistics and advertising investments. The company continues to manage tariff-related risks and supply chain sourcing.

• Rocky Brands reported third quarter 2026 net sales of $138.8 million, a 13.3% increase over Q3 2025, driven by growth in Wholesale and Retail segments [N3].
• Gross margin for Q3 2026 increased to 45.0% of net sales from 40.2% in Q3 2025, primarily due to tariff refunds and inventory benefits [N3].
• Retail segment net sales grew 20.0% in Q3 2026 to $35.4 million, supported by owned e-commerce, Lehigh CustomFit, and third-party marketplaces [N2].
• Wholesale segment net sales increased 11.8% to $99.6 million in Q3 2026, driven by key customer sales and new collections [N2].
• Operating expenses increased to 31.9% of net sales in Q3 2026 from 30.6% in Q3 2025, due to higher logistics costs, digital advertising, and incentive compensation [N2].
• Income from operations for Q3 2026 was $18.2 million or 13.1% of net sales, compared to $11.7 million or 9.6% in Q3 2025 [N1].
• The company recognized $20.5 million in tariff refunds related to invalidated IEEPA tariffs, with $8.3 million receivable as of September 30, 2026 [S2].
• Liquidity remains strong with a current ratio of 2.7 and cash and equivalents of $2.29 million as of September 30, 2026 [S2].

The company’s diversified brand portfolio and multi-channel distribution provide resilience and opportunities for growth across various footwear and apparel markets. Continued expansion of the Retail segment, particularly through e-commerce and Lehigh CustomFit business-to-business programs, supports revenue diversification. Tariff refunds recognized in 2026 have improved gross margins, and ongoing supply chain adjustments aim to mitigate tariff risks. Investments in digital advertising and product innovation may enhance brand visibility and consumer engagement. Operational efficiencies and debt reduction contribute to improved financial flexibility.

The business faces risks from evolving macroeconomic conditions including tariffs, taxes, and trade policies that remain uncertain and could impact costs and sourcing strategies. Increased operating expenses related to logistics, advertising, and incentive compensation may pressure margins if sales growth slows. Seasonal fluctuations create inventory management challenges. Dependence on key wholesale customers and retail partners exposes the company to channel concentration risks. Contract Manufacturing segment sales have shown slight declines, indicating potential volatility in that area. Competitive pressures in footwear and apparel markets require continuous innovation and marketing investment.

Rocky Brands benefits from a strong portfolio of well-established and recognized brands with reputations for quality, comfort, and durability across multiple footwear and apparel markets. The company’s diversified distribution channels, including extensive wholesale relationships and direct-to-consumer e-commerce platforms, provide broad market access. Its commitment to product innovation and technical features tailored to specific customer needs supports brand loyalty. The combination of owned manufacturing facilities and third-party sourcing enhances supply chain flexibility and cost management. Long-term retailer relationships and targeted sales force organization around brands, regions, and customer segments reinforce competitive positioning.

• Tariff and Trade Policy Risks: The company is exposed to changes in tariffs and trade policies, including the dynamic and unpredictable nature of tariffs under the International Emergency Economic Powers Act (IEEPA). Future tariff modifications or reinstatements could materially affect costs and profitability.
• Operating Expense Increases: Rising outbound logistics costs, digital advertising spend, and performance-based incentive compensation have increased operating expenses as a percentage of sales, which could pressure margins if not offset by sales growth.
• Seasonality and Inventory Management: Significant seasonal fluctuations in inventory and sales require effective inventory management to avoid excess or shortage, impacting working capital and sales fulfillment.
• Customer and Channel Concentration: Heavy reliance on key wholesale customers and retail partners may expose the company to risks if these relationships weaken or if market dynamics shift.
• Contract Manufacturing Segment Volatility: The Contract Manufacturing segment has experienced slight sales declines, indicating potential volatility and dependency on winning bids for military and private label contracts.

• Rocky Brands, Inc. is a designer, manufacturer, and marketer of premium quality footwear and apparel under well-recognized brands including Muck, XTRATUF, Rocky, Durango, Georgia Boot, Lehigh, Ranger, and the licensed brand Michelin.
• The company organizes its business into three reportable segments: Wholesale, Retail, and Contract Manufacturing.
• Products target six distinct markets: work, outdoor, western, commercial military, duty, and military.
• Wholesale distribution channels include sporting goods stores, outdoor retailers, independent shoe retailers, hardware stores, mass merchants, uniform stores, farm store chains, specialty safety stores, specialty retailers, and online retailers.
• Retail sales are conducted through business-to-business direct sales (Lehigh CustomFit), consumer e-commerce websites, third-party marketplaces, and the Rocky Outdoor Gear Store.
• The company operates its own manufacturing facilities and also sources products from third-party manufacturers.
• Rocky Brands experienced significant seasonal fluctuations with highest inventory in Q2 and Q3 and highest sales in Q4 and Q1.
• The company has been affected by tariffs under the International Emergency Economic Powers Act (IEEPA) but recognized a $20.5 million benefit due to tariff refunds as of September 30, 2026.
• As of September 30, 2026, cash and equivalents were $2.29 million, current assets $305.3 million, current liabilities $112.9 million, with a current ratio of 2.7 and cash ratio of 0.02.
• Net sales for Q3 2026 were $138.8 million, a 13.3% increase over Q3 2025, driven by growth in Wholesale and Retail segments.
• Gross margin for Q3 2026 was 45.0% of net sales, up from 40.2% in Q3 2025, primarily due to tariff refunds and inventory benefits.
• Operating expenses increased to 31.9% of net sales in Q3 2026 from 30.6% in Q3 2025, due to higher logistics costs, digital advertising, and incentive compensation.
• Income from operations for Q3 2026 was $18.2 million or 13.1% of net sales, compared to $11.7 million or 9.6% in Q3 2025.
• Year-to-date net sales for 2026 were $381.6 million, an 11.5% increase over 2025, with gross margin at 44.2% of net sales.
• The company’s Wholesale segment net sales increased 11.8% in Q3 2026 to $99.6 million, driven by key customer sales and new collections.
• Retail segment net sales increased 20.0% in Q3 2026 to $35.4 million, supported by owned e-commerce, Lehigh CustomFit, and third-party marketplaces.
• Contract Manufacturing net sales slightly declined by 3.1% in Q3 2026 to $3.8 million.
• Wholesale segment gross margin was 44.6% in Q3 2026, up from 39.5% in Q3 2025, due to tariff refunds and inventory benefits.
• Retail segment gross margin was 50.0% in Q3 2026, up from 46.8% in Q3 2025, aided by tariff refunds and a higher mix of e-commerce sales.
• Contract Manufacturing gross margin improved to 9.9% in Q3 2026 from 6.9% in Q3 2025 due to increased production and economies of scale at the Puerto Rico facility.
• Interest expense declined in Q3 2026 compared to Q3 2025 due to debt repayments and included interest income related to tariff refunds.
• The effective tax rate decreased slightly to 21.5% in Q3 2026 from 22.0% in Q3 2025 due to earnings mix between U.S. and international subsidiaries.