TCF POST Analysis

NELSONVILLE, Ohio, Oct. 27, 2026. Rocky Brands (NASDAQ: RCKY) reported third-quarter net sales up 13.3% to $138.8 million, its second straight quarter of double-digit growth. Net income rose to $12.8 million ($1.69 per diluted share) from $7.2 million ($0.96) a year earlier. Adjusted EPS climbed 70.9% to $1.76.

“Demand was broad-based, with several of our brands achieving double-digit sales gains led by Durango, Muck and XTRATUF, as well as our Lehigh CustomFit business," said Jason Brooks, Chairman, President and Chief Executive Officer. "Excluding the net benefit from IEEPA tariff refunds, gross margins reflect strong full-price selling, which helped drive third-quarter profitability higher than expected. We are encouraged with our momentum heading into the holiday season and believe we are well positioned to deliver a strong finish to the year.”

Gross margin widened 480 basis points to 45.0%, helped by $2.5 million in IEEPA tariff refunds and a temporary $3.5 million benefit from selling free-trade-zone inventory that carried no incremental tariffs. Operating income rose to $18.2 million from $11.7 million.

Where the growth came from

  • Brands: Durango, Muck and XTRATUF each posted double-digit sales gains, according to CEO Jason Brooks.
  • Lehigh: The Lehigh CustomFit business also grew by double digits.
  • Wholesale: Sales rose 11.8% to $99.6 million, still the largest segment at about 72% of the total.
  • Retail: Sales grew 20.0% to $35.4 million, the fastest channel. Higher outbound logistics and digital adv.costs came with it.
  • Contract Manufacturing: The only decliner, down 3.1% to $3.8 million.

Balance sheet. Total debt fell 16.6% year over year to $116.0 million, and quarterly interest expense dropped to $2.0 million from $2.6 million. Inventory slipped 2.0% to $189.7 million but is up 4.7% from year-end. Other receivables rose to $11.2 million, mainly the tariff refund receivable.

Quality of earnings. Operating expenses grew faster than sales, reaching 31.9% of net sales versus 30.6%, on logistics, advertising and performance-based pay. About $6 million of the margin lift came from tariff-related items. Brooks said that excluding the net tariff refund benefit, full-price selling still pushed profitability above expectations.

Outlook. Brooks said the company is “encouraged with our momentum heading into the holiday season” and well positioned for a strong finish to the year. However, the company's release provides no formal guidance figures.