Rocky Brands suffered a decline in sales to the U.S. military as well. It was partly offset by higher retail and wholesale revenues, but the drop nevertheless led to a decline of 5.5 percent in total sales to $52.3 million in the second quarter

As military sales carry lower prices and margins, the gross margin of the group improved to 39.4 percent from 34.6 percent a year ago. The improvement was aided by higher average wholesale prices and improved manufacturing efficiencies.

The operating margin improved to 7.2 percent from 5.3 percent, allowing the company to post net income of $2.3 million for the quarter, up from $520,000 in the same period a year ago.

The management continues to see potential for expansion into new categories and into new markets internationally. It wants to take advantage of Rocky's own manufacturing facilities to improve in-stock positions of popular styles, increasing speed to market and reducing costs.