After reporting a loss during its second quarter, Rocky Brands’ net sales rebounded 4.3% during Q3 to $73.2 million, up from $70 million during the same period last year.
Despite this, income was down compared to the year prior, with the work boot manufacturer reporting net income of $400,000, or 6 cents per diluted share, compared to $1.8 million (24 cents per share) in 2015.
Sales from wholesale decreased 3.2% to $52.9 million compared to $54.7 million for the same period last year. Rocky Chairman and Interim CEO Mike Brooks called the result in its wholesale business a “stabilization” after a “difficult 12-month period” in its work, western and hunting boot categories.
But the company’s retail performance was hardly any more encouraging, remaining flat at $10.3 million from last year.
In response, Rocky announced it had “adjusted” its operating structure in an effort to boost profits, resulting in a reduction of its US workforce. Though the company didn’t specify how many jobs that entailed, Brooks said the reduction will translate into an annual savings of approximately $3.6 million.
Rocky is hoping for a better 2017, by which point it expects less pressure on its gross margins. The pressure is largely the result of additional investments needed to support a ramp-up in military footwear production at the company’s Puerto Rico facility.
Rocky recently announced it had signed a new contract with the US government to produce boots for the military. The military category continued to be a bright spot for the company, up to $10.1 million from $5.1 million a year ago.
“While we are disappointed in our recent performance, we remain confident that our ongoing efforts to reduce our dependence on optimal weather along with the recent rightsizing of our organization and improved manufacturing efficiencies should contribute to more profitable growth and greater shareholder value,” said Brooks.