Rocky Brands (NasdaqGS:RCKY) Q4 2025 Earnings call February 24, 2026 04:30 PM ET Speaker4Good afternoon, ladies and gentlemen, thank you for standing by. Welcome to the Rocky Brands Fourth Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue for questions. If anyone has any difficulties hearing the conference, please press *0 for o ...

Core Viewpoint - MercadoLibre's stock has remained nearly flat this year despite strong growth, primarily due to macroeconomic concerns and political instability in Latin America, but it is expected to rebound soon for several reasons [1]. Group 1: Growth Potential - The company has significant growth potential, having served 76.8 million unique active buyers in the latest quarter, with most revenue coming from Brazil, Argentina, and Mexico. It is expanding into higher-growth markets such as Chile, Colombia, Peru, and Ecuador, and may re-enter Venezuela after recent U.S. military intervention [2]. Group 2: Fintech Expansion - MercadoLibre's fintech ecosystem, which includes the Mercado Pago payments platform, credit, and digital banking services, is expanding. It served 72.2 million monthly active users across its fintech services in the latest quarter, with expectations for further user growth as it rolls out more services and enters new countries [3]. Group 3: Profitability and Valuation - The company's profits are increasing as it expands its higher-margin third-party marketplace, credit, and advertising segments, while operating expenses are declining due to economies of scale. Analysts project revenue and EPS growth at CAGRs of 29% and 30% respectively from 2024 to 2027, with a current valuation of 30 times forward earnings, making it attractive to growth-oriented investors once the Latin American market stabilizes [4].

Core Insights - Amazon reported mixed financial results for the fourth quarter, with revenue exceeding Wall Street estimates but earnings slightly missing projections [1][3] - CEO Andy Jassy highlighted the e-commerce segment's ability to deliver essentials to more customers as a key growth driver [1] - The company's shares fell over 8% in after-hours trading due to a forecasted capital expenditure of about $200 billion for 2026, which was higher than expected [2] Financial Performance - Amazon's net sales for the quarter rose 14% year-over-year to $213.4 billion, surpassing estimates [3] - Net income was $21.2 billion, translating to $1.95 per diluted share, which was an increase from the previous year but missed analyst expectations [3] - In North America, sales increased 10% year-over-year to $127.1 billion, with operating income climbing to $25 billion due to improved fulfillment-network efficiency [4] Delivery and Customer Experience - Prime members in the U.S. received over 8 billion items the same or next day in 2025, a 30% year-over-year increase, with groceries and everyday essentials making up about half of that volume [5] - Same-day delivery is Amazon's fastest-growing delivery option, utilized by nearly 100 million U.S. customers last year [5] - The company has improved local inventory placement, leading to faster delivery at lower costs [6] Future Projections - Amazon expects first-quarter 2026 net sales between $173.5 billion and $178.5 billion, indicating 11% to 15% year-over-year growth, aided by a 180-basis-point benefit from foreign exchange [6] - Operating income is projected to be between $16.5 billion and $21.5 billion, compared to $18.4 billion a year earlier, reflecting increased costs related to Amazon Leo and investments in quick-commerce offerings [7] - The company plans to invest approximately $200 billion in capital expenditures in 2026, a significant increase from about $131 billion in 2025, focusing on data centers, fulfillment operations, delivery infrastructure, and automation [8]

Financial Data and Key Metrics Changes - Consolidated revenue increased by 5.1% to $4.4 million, with a 6.4% increase excluding the impact of last year's Noa Home closure [11][12] - Gross margin decreased by 30 basis points to 56.3%, primarily due to lower retail margins, partially offset by higher wholesale margins [11] - Operating income was $2.3 million, or 2.6% of sales, compared to $900,000 in the prior year [12] - Diluted earnings per share were $0.18, down from $0.38 in the prior year quarter [12] Business Line Data and Key Metrics Changes - Wholesale sales increased by 8.3%, with a 14% increase in shipments to the retail store network [12] - Retail sales increased by 7.9%, with a retail backlog of $34.4 million compared to $37.1 million in the previous year [14][15] - E-commerce sales were up 14% in the quarter and 27% for the full year [8] Market Data and Key Metrics Changes - The housing market remains slow, impacting overall business performance [4] - The company noted a generational trend of independent furniture store retirements, which may provide opportunities for market share growth [40] Company Strategy and Development Direction - The company is focused on maintaining a leaner, smarter business model while driving operating efficiencies and integrating technology [4] - Plans to open three new stores in 2026, with a capital expenditure forecast of $8-$12 million [16] - The introduction of new product lines, such as the Copenhagen line and the HomeWork line, has positively impacted sales [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about stabilizing tariff situations and ongoing challenges with housing and mortgage rates [10] - The company aims to adapt to a changing marketplace and is committed to innovation and operational discipline [10] Other Important Information - The company reduced headcount by 11% last year and an additional 4% recently to streamline operations [10] - The company remains committed to shareholder returns through dividends and opportunistic share buybacks [16] Q&A Session Summary Question: Can you comment on pricing versus unit volumes in Q4? - Management indicated that retail prices were held in Q4, impacting retail gross margins, and that they had to absorb tariff surcharges [18][19] Question: How did written retail sales trend in the quarter? - Written sales were up 4% for the quarter, but recent weather disruptions affected store operations [22][23] Question: What is the outlook for Bassett Design Studios and design centers? - The company plans to open more Bassett Custom Studios, focusing on productivity metrics [24] Question: What is the long-term goal for the retail store network? - The company aims to open 2-4 stores per year, leveraging geographic advantages [29][30] Question: How do new stores impact the P&L on the retail side? - New store openings impact SG&A expenses due to pre-opening costs, but gross margins remain unaffected [36] Question: Where is the company gaining market share? - Management attributed market share gains to new product offerings and improvements in product assortment [39][40] Question: What is the attitude towards share repurchase? - The company remains opportunistic regarding share repurchases, evaluating cash levels and market conditions [41][43]

Core Insights - Costco Wholesale Corp. has seen a significant 10% increase in shares at the start of 2026, driven by strong December sales data and bullish technical signals [2] Sales Performance - For the five weeks ending January 4, Costco reported sales of $29.86 billion, reflecting an 8.5% year-over-year (YOY) increase. Comparable sales in the U.S. rose by 6% YOY, while Canadian and international comps increased by 8.4% and 10.6%, respectively [3] - Digital-enabled sales surged nearly 19% YOY, indicating a positive shift in Costco's e-commerce performance, following a 16% growth in November. This growth is contributing to larger average ticket sizes, which increased by 4.2% in December, and higher customer traffic [4] Financial Health - Total sales for fiscal 2025 reached approximately $269 billion, marking an increase of over 8% from 2024. Net income surpassed $8 billion, and membership retention rates in the U.S. and Canada remained above 90%, although some slippage has been noted [7] - Despite a nearly 20% decline in shares during the second half of 2025, Costco's strong sales performance positions the company for growth in 2026, with a recent 10% stock increase in the last two weeks [6]

Core Insights - MercadoLibre is projected to potentially triple in value over the next decade, making it a strong investment opportunity for 2026 [1] - The company has demonstrated consistent revenue growth, achieving over 1,500% increase in revenue over the past seven years with at least 30% year-over-year growth for 27 consecutive quarters [2] Business Performance - MercadoLibre's e-commerce segment is thriving, with nearly 77 million active buyers, a 26% increase, and a 39% rise in items sold in Q3 [6] - The advertising revenue is accelerating, with growth rates of 41%, 50%, 59%, and 63% over the last four quarters, contributing positively to profit margins [7] Logistics and Efficiency - Despite concerns over profit impacts from lowering the free shipping threshold in Brazil, MercadoLibre is improving shipping efficiency, with shipping expenses per item sold dropping 8% quarter over quarter [8][9] - The company is utilizing robotics in warehouses and optimizing network utilization to reduce costs, which supports long-term growth strategies [9] Financial Services Growth - MercadoLibre's fintech services have over 72 million active monthly users, reflecting a 29% increase, and the company is expanding its offerings in credit and lending services [10] Revenue Potential - The company is expected to reach nearly $100 billion in annual revenue within a decade if it maintains low double-digit annual growth rates, indicating significant growth potential in an underpenetrated market [11] Valuation - MercadoLibre's market cap is approximately $110 billion, with a trailing-12-month cash from operations of about $7.7 billion, resulting in a valuation of around 14 times its operating cash flow, which is considered historically cheap [12] - Compared to Amazon, which trades at 20 times its cash from operations, MercadoLibre's faster growth and longer runway for expansion suggest it is undervalued [13] Future Growth Opportunities - The company is likely to explore new growth avenues, particularly in advertising, which has recently become a significant revenue source, indicating potential for further expansion beyond current business units [14]

Core Insights - MercadoLibre is recognized as a leading e-commerce and fintech platform in Latin America, often compared to Amazon, with significant growth potential [1][2] Group 1: Growth Performance - In Q3 2025, MercadoLibre's net revenue increased by 39% year over year, reaching $7.4 billion, driven by nearly 35% growth in gross merchandise value (GMV) on a foreign-exchange-neutral basis [4] - The platform serves 77 million unique buyers quarterly, marking a 26% increase from the previous year [4] - Mercado Pago's credit portfolio grew by 83% year over year to $11.0 billion, with a 90-day non-performing loan (NPL) rate improving from 7.8% to 6.8% [5] - Monthly active users of Mercado Pago reached 72 million, with increased usage for everyday payments, savings, and credit [5] - The integration of marketplace, logistics, and payments enhances user engagement and raises switching costs for buyers and sellers [6] Group 2: Profitability Challenges - MercadoLibre's operating margin peaked at 13.5% in Q4 2024 but declined to 9.8% in Q3 2025 [7] - The decline in margins is primarily attributed to increased shipping costs, as the company reduced its free-shipping threshold from 79 reais to 19 reais to boost volumes amid rising competition [8] - Sustained elevated shipping subsidies may be necessary to maintain market position as competitors aggressively compete on price and delivery speed [10]

Core Viewpoint - MercadoLibre (MELI) has shown exceptional performance, with a $10,000 investment growing to $176,000 over the past decade, indicating significant growth potential despite current valuations [1]. Group 1: Company Performance - MercadoLibre's competitive advantage is expanding as it diversifies beyond e-commerce into fintech services, creating a financial super app in a rapidly growing market [3]. - The company reported a 35% year-over-year growth in gross merchandise volume on a currency-neutral basis, leading to a 49% year-over-year revenue growth [5]. - The stock is currently trading at a price-to-sales multiple of 3.8, significantly lower than its 10-year average of 9.8, suggesting solid value for investors [6]. Group 2: Future Growth Potential - Analysts project an annualized revenue growth rate of 21% through 2029, with potential earnings growth of around 38% due to expanding margins [6]. - The ongoing growth trajectory of MercadoLibre positions it as a strong candidate for wealth-building returns for shareholders over the next decade [6].

Core Insights - PDD, China's third-largest e-commerce company, went public in 2018 and reached an all-time high stock price of $202.82 in February 2021, driven by significant growth in its discount marketplace and market share gains against competitors [1][2] Group 1: Company Performance - From 2018 to 2024, PDD's revenue grew at a CAGR of 76%, and it became profitable in 2021, with net income increasing at a CAGR of 144% over the next three years, marking it as one of the fastest-growing e-commerce companies globally [3] - Analysts project that from 2024 to 2027, PDD's revenue and net income will grow at a more modest CAGR of 12% and 7%, respectively, as the business matures and faces increased competition [4] Group 2: Market Position and Competition - PDD's stock has decreased to approximately $110, trading at ten times next year's earnings, but its high-growth phase may be over due to persistent trade tensions between the U.S. and China affecting valuations [5] - In contrast, MercadoLibre, the largest e-commerce company in Latin America, is experiencing faster growth and has a more diversified business model, which may present better investment opportunities compared to PDD [6][8]

Core Insights - Coupang is a growing e-commerce company with a strong presence in South Korea and expanding operations in Taiwan, capitalizing on significant growth opportunities across Asia [1][5] Financial Performance - The company's revenue grew 18% year over year in the recent quarter, with trailing-12-month revenue reaching $34 billion, a 16% increase from the previous year [5] - Free cash flow has improved to over $1.25 billion on a trailing-12-month basis, a significant turnaround from negative free cash flow reported in 2022 [6] Market Position and Valuation - Following a decline of 45% in stock price over the past five years, the stock has increased by 20% in the last year, slightly outperforming the S&P 500's 16% gain [2] - The stock is currently trading at 39 times its trailing-12-month free cash flow, but this multiple is projected to drop to 16 based on 2029 estimates [11] Growth Potential - Analysts expect Coupang's revenue to grow at an annualized rate of 10% through 2029, potentially reaching $48 billion, with non-retail services like the Rocket WOW membership program expected to enhance profitability [10] - The company is showing early success in Taiwan, with operations mirroring its growth pattern in South Korea, indicating substantial growth potential in new Asian markets [7]