Rocky Brands, Inc. Q4 FY2025 earnings call

• Jason Brooks mentioned Q4 2025 had highest quarterly growth rate, net sales up 9%, full year net sales up 6% with gross margins expanding 150 basis points despite tariffs. • Walked through brand and channel performance: XTRATUF was fastest-growing with strong e-commerce, new cold weather and Sesame Street licensed products; Muck had good quarter with sales growth, driven by branded website and marketplace; Durango had good December but key account softness; Georgia Boot had e-commerce growth; Rocky Work, Outdoor & Western ended Q4 positively; Commercial military and duty sales nearly in line. • Tom Robertson discussed financials: Q4 gross profit $57.7M, 41.3% of net sales; operating expenses $48.1M; income from operations $9.6M. Full year net sales $482M, gross margins 40.9%, adjusted income from operations $40.0M, adjusted net income $24.5M. • Investments in supply chain, marketing, and teams to support growth.

Net sales increased 9% in Q4 2025. For segments: XTRATUF was fastest-growing with e-commerce near triple digits, wholesale up, new cold weather and Sesame Street licensed products performing well. Muck had low 20% sales growth, driven by branded website mid-double digits and marketplace volumes doubling. Durango had good December in farm and ranch but softness in key accounts. Georgia Boot had lackluster wholesale but strong e-commerce. Rocky Work, Outdoor & Western ended Q4 positively. Commercial military and duty sales nearly in line with prior year. Full year net sales grew 6%, gross margins expanded 150 basis points. Retail sales up 30.8% in Q4, wholesale down 2.1%, contract manufacturing flat. Full year retail sales up 20.5%, wholesale up 1%, contract manufacturing down 7.7%. Gross margins full year 40.9%, adjusted income from operations up 5.6%, adjusted net income up 29.4%.

• 2026 revenue expected to increase ~6% over 2025, retail segment to grow faster than wholesale. • Gross margins forecasted similar to 2025, with ~$10M in IEEPA tariffs in first half, 80% in Q1. • SG&A expected to increase in dollars but leverage by ~80 basis points as percentage of revenue. • Interest expense to step down further but less than in 2025. • EPS percentage growth in low teens. • Sales growth expected fairly consistent each quarter, with earnings growth in second half due to tariff impact front-loaded in Q1.

• Tariffs and sourcing variances impacting gross margins, with $8.3M in Q4 tariffs and sourcing variances, and ~$10.9M in tariffs full year. • Consumer sentiment and market conditions could impact sales. • Changes in tariff rates and administration actions being uncertain and potentially affecting margins and operations. • Timing of customer orders and inventory carryover impacts on certain segments like Durango.

Q: Understand fourth quarter strength, especially retail channel, and sources of upside.

A: Jason Brooks said Q4 sales higher than anticipated, XTRATUF and Muck did better than expected, weather and product/marketing efforts contributed.

Q: Potential size of XTRATUF and Muck in 2026 and growth drivers.

A: Thomas Robertson said Muck over $100M, XTRATUF approaching $100M in 2026, drivers include updated websites, marketing spend, inventory investment, team investments.

Q: Flat gross margin for 2026 despite tariff headwinds, tariff offsets and timing.

A: Thomas Robertson said ~$10M in tariffs in first half, modeled margin based on 15% tariff, monitoring sourcing, competitive advantage with Dominican Republic, unknowns with tariff changes.

Q: Year-to-date trends and macro environment.

A: Thomas Robertson said momentum carried forward in 2026, weather helped, order book up across brands, macro not seeing significant consumer change, tax refunds may benefit.