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1. Company Snapshot

1.a. Company Description

Rocky Brands, Inc.designs, manufactures, and markets footwear and apparel under the Rocky, Georgia Boot, Durango, Lehigh, Muck, XTRATUF, Servus, NEOS, Ranger, and licensed Michelin brand names in the United States, Canada, and internationally.It operates through Wholesale, Retail, and Contract Manufacturing segments.


The Wholesale segment offers products in approximately 10,000 retail locations through a range of distribution channels comprising sporting goods stores, outdoor retailers, independent shoe retailers, hardware stores, catalogs, mass merchants, uniform stores, farm store chains, specialty safety stores, and specialty and online retailers.The Retail segment sells its products directly to consumers through its e-commerce websites, including rockyboots.com, georgiaboot.com, durangoboot.com, lehighoutfitters.com, lehighsafetyshoes.com, slipgrips.com,muckbootcompany.com,xtratuf.com, and Rocky outlet store in Nelsonville, Ohio, and retail stores.The Contract Manufacturing segment include private label sales and any sales to customers which are contracted to manufacture a specific footwear product for a customer and include sales to the U.S. Military.


It serves industrial and construction workers, as well as workers in the hospitality industry, such as restaurants or hotels; farmers and ranchers; consumers enamored with western influenced fashion; commercial military personnel; hunting, fishing, camping, and hiking enthusiasts; law enforcement, security personnel, and postal employees; and for the U.S. military personnel.Rocky Brands, Inc.was founded in 1932 and is headquartered in Nelsonville, Ohio.

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1.b. Last Insights on RCKY

Rocky Brands, Inc.'s recent performance was negatively impacted by higher SG&A costs, which led to decreased margins in Q4 2024. The company's earnings growth of 8.8% year-over-year was overshadowed by increased expenses, including logistics costs and higher tariffs on Chinese imports, which are expected to affect EPS by $0.60 in FY 2025. Additionally, the company's Q3 results were marred by slow wholesale orders, inventory shortages, and dry weather, which have yet to fully recover.

1.c. Company Highlights

2. Rocky Brands' Q3 2025 Earnings: A Strong Performance Amidst a Challenging Environment

Rocky Brands reported a robust third quarter, with net sales increasing 7% to $122.5 million, gross profit margin expanding 210 basis points to 40.2%, and adjusted diluted EPS reaching $1.03, a 34% increase versus the previous year. The company's actual EPS significantly beat estimates of $0.485. The strong financial performance was driven by the team's efforts in navigating higher tariffs, diversifying sourcing, and leveraging its own facilities in the Dominican Republic and Puerto Rico.

Publication Date: Nov -25

📋 Highlights
  • Strong Financial Performance:: Q3 sales rose 7% to $122.5M, gross margins expanded 210 bps to 40.2%, and adjusted EPS surged 34% to $1.03.
  • Brand Growth & Challenges:: XTRATUF, Muck, and Georgia Boot delivered strong growth; Durango sales declined due to key accounts pulling orders forward.
  • Inventory & Manufacturing Shift:: Inventory increased 12.7% to $193.6M; plans to manufacture 50% of inventory in-house by 2026 (vs. 30% in 2025) to boost margins.
  • Guidance & Tariff Impact:: 2025 revenue growth guided at 4–5%, but Q4 gross margins expected to dip due to $10M in tariff-related inventory misses; full-year margin projected at 38–39%.
  • Supply Chain & Strategic Moves:: Diversified sourcing and in-house production in Dominican Republic/Puerto Rico improved flexibility; 2026 margin recovery expected to reach high-30s/low-40s.

Segment Performance

The company's brands performed well, with XTRATUF delivering strong growth, Muck continuing its positive trajectory, and Georgia Boot showing solid growth. Durango sales were down year-over-year due to some key accounts pulling forward orders, but the company saw consistent growth in Farm and Ranch accounts. The commercial military and duty business posted its second consecutive quarter of improved results.

Operational Improvements

The company made operational improvements to its custom fit website and launched a new partnership with Eyewear for prescription safety eyewear. Tom Robertson noted that diversifying sourcing would help margins in 2026, but the biggest driver would be bringing more product in-house, with the company projecting that it would manufacture approximately 50% of its inventory needs in-house in 2026, up from 30% in 2025.

Outlook and Guidance

The company reiterated its prior guidance for 2025, expecting revenue to increase between 4% to 5% compared to 2024 levels, with full-year gross margins down approximately 70 basis points to between 38% and 39%. For 2026, analysts estimate revenue growth at 4.3%. Jason Brooks expressed caution about the broader consumer environment and the anticipated impact on fourth-quarter gross margins from higher tariffs.

Valuation

With a P/E Ratio of 10.77 and an EV/EBITDA of 6.46, the company's valuation appears reasonable. The stock's ROE of 8.63% and ROIC of 7.26% indicate a decent return on equity and invested capital. The Net Debt / EBITDA ratio of 2.48 suggests a manageable debt burden. The Dividend Yield of 2.09% and Free Cash Flow Yield of 7.18% are also attractive.

3. NewsRoom

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Rocky Brands Is Still Performing, But Q4 Will Definitely Show Tariff Impacts

Oct -30

Source: seekingalpha.com

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Rocky Brands, Inc. (RCKY) Q3 2025 Earnings Call Transcript

Oct -28

Source: seekingalpha.com

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Rocky Brands, Inc. Announces Third Quarter 2025 Results

Oct -28

Source: businesswire.com

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Rocky Brands Is A Compelling Play

Oct -27

Source: seekingalpha.com

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Rocky Brands, Inc. to Report Third Quarter 2025 Results on October 28, 2025

Oct -21

Source: businesswire.com

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Canada Goose, VF Corp., Rocky Brands Surge as Baird Upgrades Stocks

Aug -26

Source: investopedia.com

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Rocky Brands Q2: Thriving In Tariff Turmoil

Jul -30

Source: seekingalpha.com

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Rocky Brands' Q2 Probably Saw The Benefits But Not The Costs Of The Tariffs

Jul -30

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.90%)

6. Segments

Wholesale

Expected Growth: 1.8%

Rocky Brands, Inc.'s wholesale segment growth of 1.8% is driven by increasing demand for outdoor and work footwear, expansion into new channels, and strategic partnerships. Additionally, the company's focus on innovative products, such as waterproof and insulated footwear, has contributed to the growth. Furthermore, the company's efforts to strengthen its distribution network and improve operational efficiency have also supported the segment's growth.

Retail

Expected Growth: 2.2%

Rocky Brands, Inc.'s 2.2% retail growth is driven by increasing demand for outdoor and work footwear, expansion of e-commerce channels, and strategic partnerships with key retailers. Additionally, the company's focus on innovative products, such as waterproof and insulated footwear, has contributed to its growth in the retail segment.

Contract Manufacturing

Expected Growth: 1.9%

Rocky Brands, Inc.'s 1.9% growth in Contract Manufacturing is driven by increasing demand for outdoor and work footwear, strategic partnerships, and capacity expansions. Additionally, the company's focus on operational efficiency, cost savings, and investments in technology have contributed to the growth. Furthermore, the trend towards outsourcing manufacturing to specialized partners has also boosted the segment's performance.

7. Detailed Products

Work Boots

High-quality, durable boots designed for workers in various industries such as construction, manufacturing, and outdoor occupations.

Outdoor Apparel

Waterproof and breathable clothing designed for outdoor enthusiasts, including jackets, pants, and shirts.

Military Boots

Tactical boots designed for military personnel, law enforcement, and first responders.

Western Boots

Handcrafted boots with a focus on style, comfort, and durability, inspired by traditional Western designs.

Hunting Boots

Waterproof and insulated boots designed for hunters and outdoor enthusiasts, providing warmth and protection in harsh environments.

Work Apparel

Durable and comfortable clothing designed for workers in various industries, including flame-resistant and high-visibility apparel.

8. Rocky Brands, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Rocky Brands, Inc. is medium due to the presence of alternative footwear and apparel brands in the market. However, the company's strong brand recognition and quality products help to mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low for Rocky Brands, Inc. due to the company's strong brand portfolio and wide distribution network, which reduces the dependence on individual customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for Rocky Brands, Inc. due to the presence of multiple suppliers in the market. However, the company's large scale of operations and long-term relationships with suppliers help to mitigate this threat.

Threat Of New Entrants

The threat of new entrants is low for Rocky Brands, Inc. due to the high barriers to entry in the footwear and apparel industry, including significant capital requirements and established distribution networks.

Intensity Of Rivalry

The intensity of rivalry is high for Rocky Brands, Inc. due to the presence of several established players in the footwear and apparel industry, leading to intense competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 44.02%
Debt Cost 13.75%
Equity Weight 55.98%
Equity Cost 13.75%
WACC 13.75%
Leverage 78.62%

11. Quality Control: Rocky Brands, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Buckle

A-Score: 6.8/10

Value: 4.5

Growth: 3.9

Quality: 7.5

Yield: 10.0

Momentum: 8.0

Volatility: 7.0

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Weyco

A-Score: 6.5/10

Value: 7.4

Growth: 5.9

Quality: 7.1

Yield: 9.0

Momentum: 3.5

Volatility: 6.0

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Stock-Card
Rocky Brands

A-Score: 5.1/10

Value: 7.8

Growth: 5.6

Quality: 5.4

Yield: 4.0

Momentum: 5.5

Volatility: 2.7

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Wolverine World Wide

A-Score: 4.6/10

Value: 4.3

Growth: 2.8

Quality: 5.1

Yield: 4.0

Momentum: 8.5

Volatility: 2.7

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Stock-Card
Caleres

A-Score: 3.9/10

Value: 9.3

Growth: 3.7

Quality: 4.2

Yield: 4.0

Momentum: 0.0

Volatility: 2.3

1-Year Total Return ->

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Vera Bradley

A-Score: 2.8/10

Value: 9.8

Growth: 0.7

Quality: 4.4

Yield: 0.0

Momentum: 0.5

Volatility: 1.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

29.21$

Current Price

29.21$

Potential

-0.00%

Expected Cash-Flows