Rocky Brands Sees Second DC Alleviating Demand Fulfillment Issues
The parent of the Durango, Rocky, Georgia Boot, XTRATUF and Muck Boot brands says its second U.S. distribution center in Reno, Nevada will be “fully functional” by the end of the first quarter, enabling the Nelsonville, Ohio company to better fulfill product orders for its various brands. Senior executives told analysts that Rocky Brands missed $40-$50 million in sales during the third quarter of 2021 due to fulfillment issues.
Fourth quarter operating income rose 41 percent for Rocky Brands to $18,201,000 versus $12,900,000 as total revenues increased 93 percent to $169,452,000 from $87,618,000 for the period ended Dec. 31. Wholesale revenues rose nearly 125 percent to $134.8 million; retail sales increased 12.6 percent to $26.5 million; and contract (largely military) sales were 96 percent higher at $8.1 million. Net income for the period was up 29 percent to $12,546,000 against $9,721,000, but year-over-year gross margin slid to 37.3 percent from 41.2 percent.
The company said Georgia Boot had a record Fall 2021 season with demand exceeding its distribution center’s output. Sales for the Durango brand were up low-double digits. The Rocky Western brand segment generated mid-teens wholesale growth in the U.S. during the fourth quarter as the label capitalized on some supply chain woes by rivals. Meanwhile, the company’s Boston Group, consisting of Muck and XTRATUF, generated a 32 percent increase in final period sales. Muck had “large pent-up demand” in the first quarter and XTRATUF had a record backlog.
CEO, chairman and president Jason Brooks said Rocky Brands “is in a good position to regain the market momentum that was lost during the second half of 2021” now that its distribution centers are prepared to fill customer orders in a timely manner.