The American company, which markets brands such as Georgia Boot, Durango and Mossy Oak, beat its own expectations in the fourth quarter, posting an 8.2 percent rise in sales to $66.7 million, including a 14.4 percent increase in wholesale revenues to $52.5 million. Other revenue sources were lower, with retail sales down to $12.4 million from $12.5 million, while sales in the military segment plummeted to $1.8 million from $3.3 million.
Rocky Brands' quarterly gross margin represented 36.5 percent of sales, up from 35.7 percent a year earlier. The improvement was largely due to the increase in wholesale sales, which carry higher gross margins than the military segment. Operating expenses were cut to $19.0 million, or 28.4 percent of sales, from $19.1 million, 31.0 percent of sales. The net profit surged to $3.0 million in the quarter from $0.9 million a year earlier.
In the full financial year, sales went up by 10.2 percent to $252.8 million and net profits rose to $7.7 million from $1.2 million. The company's debt decreased to $35.1 million on Dec. 31 from $55.6 million a year earlier, thanks to a recapitalization carried out in May 2010 and cash generated from operations.
The group's chairman and chief executive, Mike Brooks, said the company is well positioned for profitable growth in 2011. Financial analysts currently forecast Rocky's 2011 revenue in line with 2010 but see net profit rising further to around $9 million.
The management recently told analysts that it sees potential growth in Europe beyond markets such as the U.K., Italy, France, Switzerland, Russia, the Balkans and the Baltics, where it already has a presence. However, company officials have indicated that only about 60 stores outside the U.S. are carrying its products, double as many as in 2007, with a strong bias toward hunting boots.