Too much inventory was to blame for Rocky Brands’ soft second quarter.
The Ohio-based maker of outdoor, work, western and military footwear reported a second-quarter loss of $1.8 million, or $0.23 per diluted share compared to net income of $2 million, or $0.26 per diluted share, in the same period last year. Second quarter net sales were $62.6 million, down from $68.6 million in the second quarter of 2015.
Rocky Brands President and CEO David Sharp attributed the company’s decline in sales to “elevated inventories” in its western, work, and hunting channels, which he said “negatively impacted sales and margins in [the] wholesale business.”
“The wholesale sales decline was partially offset by a significant gain in our military sales,” he noted. “However, our need to ramp up our internal production capabilities to meet the increase in military footwear demand resulted in additional costs, including labor and training that has temporarily pressured gross margins.”
Sharp said he was “disappointed” with the recent results, but vowed to continue on the company’s strategic course, “We continue to be confident that the strategic course we’ve set for the company will lead to improved profitability and greater shareholder value over the long-term.”