Net sales of Rocky Brands' products dipped by 17.3 percent in the fourth quarter of 2015, down to $65.3 million against $78.9 million in the corresponding period of 2014. The American company's net income fell to $1.4 million from to $4.5 million.
The gross profit declined to $22.2 million from $27.6 million. Rocky Brands said the decrease was caused primarily by a higher percentage of military sales, which carry lower gross margins than wholesale and retail.
For the full 2015 financial year, the company's net sales were down by 5.9 percent to $269.3 million. Net income reached $6.6 million, compared with $9.8 million the previous year. The 2015 operating margin fell to 3.9 percent from 5.5 percent from 2014. The management explained the weaker fourth-quarter results with tough comparisons with the year-ago quarter, combined with warm temperatures and weak retail store traffic. David Sharp, chief executive of the group, said he was cautiously optimistic about a recovery in the top and bottom lines in 2016.
He added that in 2016, the company will shift more time and resources to support large growth prospects led by the Creative Recreation and Durango brands.
In addition, the company announced that it received an order to fulfill a $13 million contract with the U.S. Military to produce “Temperate Weather” combat boots. Rocky Brands now has approximately $31 million in military orders scheduled for delivery in 2016.