Rocky Brands achieves record fourth quarter sales amid digital surge

The US-based footwear group Rocky Brands reported a strong finish to fiscal year 2025, marked by a 9.1 percent increase in fourth quarter net sales to 139.71 million dollars. This performance represents the company’s highest quarterly growth rate in over three years, driven primarily by a surge in the retail segment and the continued momentum of the XTRATUF brand.

For the full year, net sales grew 6.2 percent to 482.02 million dollars. Gross margin for the year expanded by 150 basis points to 40.9 percent, despite the group absorbing approximately 10.90 million dollars in tariffs. Jason Brooks, the chairman, president, and chief executive officer, attributed the year's success to the "power of our brand portfolio" and the organization’s agility in navigating industry headwinds, including deteriorating consumer sentiment and higher tariffs.

Direct-to-consumer and brand performance highlights

The group’s retail segment, which includes its direct-to-consumer (D2C) e-commerce channels, was a major growth engine, increasing 30.8 percent in the fourth quarter to 57.01 million dollars. XTRATUF led this expansion with nearly triple-digit sales growth online, fueled by its core ankle deck boots and a successful new cold-weather fleece-lined collection. The brand is expected to approach 100 million dollars in revenue in 2026, effectively tripling in size since its acquisition.

Muck also delivered a robust quarter with sales increasing in the low 20 percent range, supported by mid-double-digit growth on its branded website. Other portfolio highlights included Durango, benefiting from a strong December in farm and ranch accounts due to wet and snowy weather, while Durango.com saw low double-digit gains. Georgia Boot experienced strong double-digit growth in e-commerce, offsetting lackluster wholesale results caused by order timing and Rocky Work, Outdoor & Western ended the year positively with rugged outdoor products achieving low double-digit increases.

Operational agility and tariff mitigation

A significant portion of the analyst discussion centered on the group’s response to the "bumpy" tariff environment. Brooks highlighted that the group leveraged its own manufacturing facilities to diversify sourcing, a move that helped offset tariff impacts and is expected to provide "margin tailwinds over the long term".

Thomas Robertson, the chief operating and chief financial officer, confirmed that while 10 million dollars in tariffs are expected to hit the profit and loss (P&L) statement in the first half of 2026, the group is forecasting flat gross margins for the upcoming year. Robertson noted that Rocky Brands' manufacturing presence in the Dominican Republic remains a "meaningful competitive advantage" as the administration evaluates new tariff levers.

Financial health and 2026 outlook

The company’s balance sheet strengthened throughout the year, with total debt falling 4.7% to 122.62 million dollars by December 31, 2025. This reduction, combined with a debt refinancing in April 2024, led to a significant decrease in annual interest expense from 17 million dollars to 10 million dollars.

Looking ahead to 2026, Rocky Brands expects revenue to increase by approximately 6 percent, with the retail segment continuing to outpace wholesale. While earnings growth is expected to be back-half weighted due to front-loaded tariff costs in the first quarter, management remains optimistic. The Board of Directors has also approved a new 7.50 million dollar share repurchase program to run through February 2027.