third quarter 2026
Filed Oct 27, 2026Net Sales Increased 13.3% to $138.8 Million; Net Income Per Diluted Share of $1.69; Adjusted Net Income Per Diluted Share Increased 70.9% to $1.76
Third-quarter sales increased across Wholesale and Retail, gross margin expanded 480 basis points, and GAAP and adjusted profitability increased substantially. The margin result included IEEPA tariff refunds and a temporary free-trade-zone inventory benefit.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, three months ended September 30GAAP | $138.8M | – | 13.3% |
| Cost of goods sold, three months ended September 30GAAP | $76.32M | – | – |
| Gross margin, three months ended September 30GAAP | $62.5 million, or 45.0% of net sales | – | increased 480 basis points |
| Operating expenses, three months ended September 30GAAP | $44.3 million, or 31.9% of net sales | – | – |
| Adjusted operating expenses, three months ended September 30non-GAAP | $43.6 million, or 31.4% of net sales | – | – |
| Income from operations, three months ended September 30GAAP | $18.2 million, or 13.1% of net sales | – | increased |
| Adjusted income from operations, three months ended September 30non-GAAP | $18.9 million, or 13.6% of net sales | – | – |
| Interest expense and other, net, three months ended September 30GAAP | −$1.80M | – | – |
| Income before income tax expense, three months ended September 30GAAP | $16.36M | – | – |
| Income tax expense, three months ended September 30GAAP | $3.52M | – | – |
| Net income, three months ended September 30GAAP | $12.8M | – | increased |
| Diluted income per share, three months ended September 30GAAP | $1.69 | – | – |
| Basic income per share, three months ended September 30GAAP | $1.71 | – | – |
| Adjusted net income, three months ended September 30non-GAAP | $13.4M | – | increased |
| Adjusted diluted net income per share, three months ended September 30non-GAAP | $1.76 | – | increased 70.9% |
| Adjusted basic net income per share, three months ended September 30non-GAAP | $1.78 | – | – |
| Net sales, nine months ended September 30GAAP | $381.6M | – | – |
| Cost of goods sold, nine months ended September 30GAAP | $212.8M | – | – |
| Gross margin, nine months ended September 30GAAP | $168.7M | – | – |
| Operating expenses, nine months ended September 30GAAP | $127.2M | – | – |
| Income from operations, nine months ended September 30GAAP | $41.49M | – | – |
| Net income, nine months ended September 30GAAP | $27.99M | – | – |
| Diluted income per share, nine months ended September 30GAAP | $3.68 | – | – |
| Adjusted net income, nine months ended September 30non-GAAP | $29.62M | – | – |
| Adjusted diluted net income per share, nine months ended September 30non-GAAP | $3.89 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Wholesale segment net sales, third quarterDemand was broad based, with Durango, Muck, XTRATUF and Lehigh CustomFit cited as sales-growth leaders. | $99.6M | – | increased 11.8% |
| Retail segment net sales, third quarterHigher Retail segment sales were associated with higher outbound logistics costs. | $35.4M | – | increased 20.0% |
| Contract Manufacturing segment net sales, third quarterNo specific driver was disclosed. | $3.8M | – | decreased 3.1% |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
What drove it
- Demand was broad based, with several brands achieving double-digit sales gains led by Durango, Muck, XTRATUF and Lehigh CustomFit.
- Gross-margin expansion was primarily due to $2.5 million of IEEPA tariff refunds and a temporary $3.5 million benefit from sales of free-trade-zone inventory that carried no incremental tariffs, partially offset by sourcing variances.
- The increase in operating expenses was partially due to higher outbound logistics costs associated with Retail segment sales growth, increased digital advertising spend, and higher performance-based compensation.
- Lower debt levels drove lower interest expense.
Concerns
- The reported gross-margin improvement included IEEPA tariff refunds and a temporary benefit from free-trade-zone inventory sales.
- Operating expenses increased to 31.9% of net sales from 30.6% of net sales.
- Contract Manufacturing segment net sales decreased 3.1%.
- Other receivables increased primarily due to the IEEPA tariff refund receivable.
What to watch
- Whether broad-based demand across Durango, Muck, XTRATUF and Lehigh CustomFit continues into the holiday season.
- The sustainability of gross margin after the $2.5 million IEEPA tariff refunds and temporary $3.5 million free-trade-zone inventory benefit.
- Retail growth relative to associated outbound logistics and digital advertising costs.
- Progress in debt reduction and the collection of the IEEPA tariff refund receivable.
Balance sheet and cash flow
- Cash and cash equivalents were $2.3 million as of September 30, 2026 compared to $3.3 million as of September 30, 2025 and $2.9 million as of December 31, 2025.
- Other receivables were $11.2 million as of September 30, 2026 compared to $0.1 million as of September 30, 2025 and $5.0 million as of December 31, 2025.
- Inventories were $189.7 million as of September 30, 2026, down 2.0% compared to $193.6 million on the same date a year ago and up 4.7% compared to $181.1 million as of December 31, 2025.
- Total debt, net of unamortized debt issuance costs of $1.3 million, was $116.0 million as of September 30, 2026, consisting of a $20.5 million senior term loan and $96.8 million of borrowings under the senior secured asset-backed credit facility.
- Total debt was down 16.6% from September 30, 2025 and down 5.4% compared to December 31, 2025.
Analysis
Rocky Brands reported a strong third quarter, with net sales increasing 13.3% to $138.8 million. Both principal selling channels expanded, as Wholesale segment net sales increased 11.8% to $99.6 million and Retail segment net sales increased 20.0% to $35.4 million. Contract Manufacturing segment net sales decreased 3.1% to $3.8 million. Management described demand as broad based and identified Durango, Muck, XTRATUF and Lehigh CustomFit as growth leaders.
Gross margin increased to $62.5 million, or 45.0% of net sales, from $49.3 million, or 40.2% of net sales. The 480-basis-point increase was primarily driven by $2.5 million of IEEPA tariff refunds and a temporary $3.5 million benefit from free-trade-zone inventory that carried no incremental tariffs, partially offset by sourcing variances. Management also cited strong full-price selling excluding the net benefit from IEEPA tariff refunds.
Operating expenses increased to $44.3 million, or 31.9% of net sales, from $37.5 million, or 30.6% of net sales. Higher Retail-related outbound logistics, digital advertising and performance-based compensation contributed to the increase. Still, GAAP income from operations rose to $18.2 million, or 13.1% of net sales, while adjusted income from operations rose to $18.9 million, or 13.6% of net sales. Lower debt levels reduced interest expense to $2.0 million from $2.6 million.
GAAP net income increased to $12.8 million, or $1.69 per diluted share, from $7.2 million, or $0.96 per diluted share. Adjusted net income increased to $13.4 million, or $1.76 per diluted share, from $7.8 million, or $1.03 per diluted share. For the nine months ended September 30, net sales were $381,583 (In thousands), GAAP net income was $27,988 (In thousands), and adjusted net income was $29,618 (In thousands).
The balance sheet showed $2.3 million of cash and cash equivalents, $189.7 million of inventories and $116.0 million of total debt, net of unamortized debt issuance costs. Inventory was down 2.0% from September 30, 2025, while total debt was down 16.6% from that date. The company did not provide quantified forward guidance, but management said it was encouraged by momentum heading into the holiday season and believed it was well positioned to deliver a strong finish to 2026.
Management, verbatim
We delivered strong third quarter results highlighted by our second consecutive quarter of double-digit top-line growth.
Jason Brooks, Chairman, President and Chief Executive Officer
Demand was broad based with several of our brands achieving double-digit sales gains led by Durango, Muck and XTRATUF, as well as our Lehigh CustomFit business.
Jason Brooks, Chairman, President and Chief Executive Officer
Excluding the net benefit from IEEPA tariff refunds, gross margins reflect strong full price selling which helped drive third quarter profitability higher than expected.
Jason Brooks, Chairman, President and Chief Executive Officer
Not in the filing
stated, not guessed- Quantified forward revenue, gross-margin, operating-expense, tax-rate, earnings or other financial guidance was not provided.
- Previous-release outlook was not provided, so comparison with prior guidance is unavailable.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Share repurchases and dividends were not reported.
- Third-quarter prior-quarter comparative figures were not reported for the reported earnings metrics.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.