Rocky Brands managed a 12 percent increase in sales to $56.1 million for the first quarter ended March 31, reducing its net loss to $560,744 compared with a loss of $1.1 million in the same period last year. Wholesale turnover was up by 5 percent to $37.9 million, but retail saw a drop of 6 percent to $12.9 million, mostly because of a shift toward internet sales as well as shutting down some mobile stores as a cost-cutting measure. The gross margin fell by 6.7 percentage points to 33.4 percent as higher manufacturing costs and higher sales of lower-margin military footwear brought down the wholesale gross margin overall. The company said the results were above internal and external projections, driven by higher sales in wholesale and military and improved operating expense leverage. It also noted that traditionally the first quarter has the lowest sales volume, and it is hard to see positive earnings for the period. Debt at the end of the quarter was down by 46 percent to $39.5 million. It expects gross margins to grow each of the next three quarter because of increased production schedules that will reduce costs per pair.
