Financial Data and Key Metrics Changes - Reported net sales for Q1 increased 1.1% year over year to $114.1 million, slightly ahead of expectations [17] - Retail sales increased 20.5% to $36.6 million, while wholesale sales decreased by 6.3% to $74.8 million [18] - Gross profit for Q1 was $47 million, representing 41.2% of sales, the highest gross margin reported in Q1 [18] - Adjusted net income for Q1 was $5.5 million or $0.73 per diluted share, compared to $3.1 million or $0.41 per diluted share a year ago [20] Business Line Data and Key Metrics Changes - The XTRA TUF brand experienced double-digit growth, with bookings up approximately 80% versus last year [8] - MUC brand saw better-than-expected growth, particularly in the women's segment, with double-digit increases [9] - Rocky work category delivered the strongest performance, while Rocky Outdoor returned to growth with a single-digit increase [12] Market Data and Key Metrics Changes - The retail segment showed healthy demand, particularly in the B2B Lehigh business, which saw high teens sales growth [14] - Direct-to-consumer business grew faster than Lehigh, driven by marketplace volumes [15] - Wholesale sales were impacted by a planned reduction in commercial military sales, contributing to the overall decline [17] Company Strategy and Development Direction - The company plans to implement price increases on most footwear styles in response to higher tariffs [6] - Efforts are being made to reduce sourcing from China, with a goal to have less than 20% of total volume from China by year-end [27] - The company is leveraging its manufacturing facilities in the Dominican Republic and Puerto Rico to mitigate tariff impacts [37] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a higher degree of uncertainty for the remainder of the year but expressed confidence in maintaining financial targets [16] - The company is well-positioned to navigate current challenges due to its diversified sourcing structure and strong brand portfolio [6] - Management noted that consumer demand has not shown signs of panic despite economic uncertainties [34] Other Important Information - Interest expense decreased significantly to $2.4 million from $4.5 million year over year due to lower interest rates from refinancing [19] - Inventory levels increased by 6.3% year over year, reflecting proactive measures taken in anticipation of tariff impacts [21] Q&A Session Summary Question: Can you elaborate on the guidance and the migration out of China? - Management indicated a strong inventory position allowing them to navigate tariff impacts and transition sourcing out of China effectively [26][27] Question: What are wholesale partners saying about consumer ability to absorb price increases? - Management noted that retail partners are cautiously optimistic, with no significant panic from consumers regarding price increases [34] Question: How are pricing increases being planned? - The company is focused on preserving gross profit dollars while implementing price increases to offset higher costs [46][47] Question: What is the capacity shift to third-party manufacturers in Vietnam, India, and Cambodia? - Management confirmed that approximately 90-92% of products have found new homes, with ongoing efforts to transition remaining capacity [56]

Financial Data and Key Metrics Changes - Reported net sales for Q1 increased 1.1% year over year to $114.1 million, slightly ahead of expectations [18] - Retail sales increased 20.5% to $36.6 million, while wholesale sales decreased by $5 million or 6.3% to $74.8 million [19] - Gross profit for Q1 was $47 million, representing 41.2% of sales, the highest gross margin reported in Q1, compared to 39.1% in the same period last year [19] - Adjusted net income for Q1 was $5.5 million or $0.73 per diluted share, compared to $3.1 million or $0.41 per diluted share a year ago [21] Business Line Data and Key Metrics Changes - The rubber boot business, particularly the XTRA TUF brand, experienced strong demand with a 20% top line growth in the retail segment [5][6] - MUC brand also saw better than expected growth due to improved winter weather, with women's business delivering double-digit increases [10] - The Rocky brand group showed increases in both work and outdoor categories, with Rocky work delivering the strongest performance [12][13] Market Data and Key Metrics Changes - The company is shifting sourcing from China to countries like Vietnam, Cambodia, and India, aiming to reduce reliance on Chinese manufacturing [7][28] - The company anticipates total volume out of China to be just less than 20% by the end of the year [28] Company Strategy and Development Direction - The company plans to implement price increases on the majority of footwear styles in early June to mitigate the impact of higher tariffs [7][29] - The strategy includes diversifying sourcing and increasing production in the Dominican Republic and Puerto Rico [7][37] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a higher degree of uncertainty for the remainder of the year but expressed confidence in maintaining financial targets due to strong Q1 performance [17] - The company is prepared to navigate the current retail environment with a diverse brand portfolio and functional footwear [18] Other Important Information - Interest expense decreased significantly to $2.4 million from $4.5 million year over year due to lower interest rates from debt refinancing [21] - Inventory at the end of Q1 was $175.5 million, up 6.3% compared to the previous year, as the company accelerated receipts to avoid tariff impacts [22] Q&A Session Summary Question: Can you elaborate on the guidance and the migration out of China? - Management indicated a good inventory position allowing them to transition products out of China and into other countries, expecting to reduce volume from China to less than 20% by year-end [27][28] Question: What are your wholesale partners saying about consumer ability to absorb price increases? - Management noted that there hasn't been significant panic from consumers, and retail partners are cautiously navigating the situation [34][36] Question: Can you clarify the guidance regarding revenue and gross margin? - Management confirmed that while revenue assumptions remain unchanged, they expect lower gross margin percentages but aim to maintain gross profit dollars [42][43] Question: How are you planning the price increases? - The company plans to implement price increases to preserve gross profit dollars while being mindful of retail dynamics [45][46] Question: What is the capacity shift to third-party manufacturers in Vietnam and Cambodia? - Management stated that they have found homes for about 90-92% of their products and are working to secure the remaining capacity [56][57]

Financial Data and Key Metrics Changes - Reported net sales for Q1 increased 1.1% year over year to $114.1 million, slightly ahead of expectations [18] - Retail sales increased 20.5% to $36.6 million, while wholesale sales decreased by $5 million or 6.3% to $74.8 million [18] - Gross profit for Q1 was $47 million, representing 41.2% of sales, the highest gross margin reported in Q1, compared to 39.1% in the same period last year [19] - Adjusted net income for Q1 was $5.5 million or $0.73 per diluted share, compared to $3.1 million or $0.41 per diluted share a year ago [21] Business Line Data and Key Metrics Changes - The rubber boot business, particularly the XTRA TUF brand, experienced strong demand with double-digit growth in Q1 [6][8] - MUC brand also saw better than expected growth, particularly in the women's segment, driven by improved winter weather [10] - The Rocky brand group showed increases in both work and outdoor categories, with Rocky work delivering the strongest performance [12][13] - Georgia Boot faced a softer March due to economic uncertainty, but new product introductions continued to perform well [11] Market Data and Key Metrics Changes - Retail segment saw a 20% top line growth, indicating strong demand across distribution channels [5] - The company is shifting sourcing from China to countries like Vietnam, Cambodia, and India, aiming to reduce reliance on Chinese manufacturing [7][28] - The B2B Lehigh business reported high teens sales growth, marking the third consecutive quarter of double-digit gains [16] Company Strategy and Development Direction - The company plans to implement price increases on most footwear styles in response to higher tariffs, while maintaining flexibility to adjust prices based on future changes [7][29] - There is a focus on diversifying sourcing to mitigate tariff impacts, with a goal to reduce product sourced from China to less than 20% by year-end [28] - The company aims to maintain gross profit dollars despite anticipated pressure on gross margins due to tariffs [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged growing macroeconomic uncertainty but expressed confidence in navigating the current retail environment due to a diverse brand portfolio [5][18] - The company reiterated its full-year 2025 guidance, expecting low single-digit revenue growth over 2024 levels [23] - Management noted that consumer demand has not shown panic despite rising prices, indicating a stable retail environment [34] Other Important Information - Interest expense decreased significantly to $2.4 million from $4.5 million year over year due to lower interest rates from refinancing [20][21] - Inventory levels increased by 6.3% year over year, as the company accelerated receipts to mitigate tariff impacts [22] Q&A Session Summary Question: Can you elaborate on the guidance and the migration out of China? - Management indicated a strong inventory position allowing them to navigate tariff impacts and transition sourcing out of China effectively [27][28] Question: What are wholesale partners saying about consumer ability to absorb price increases? - Management noted that retail partners are cautiously optimistic, with no significant panic from consumers regarding price increases [32][34] Question: How much capacity is being shifted to third-party manufacturers in Vietnam and India? - Management stated that approximately 90-92% of products have found new homes, with ongoing efforts to transition the remaining 8% from China [56][57]

Financial Data and Key Metrics Changes - For Q4 2024, sales increased by 1.7% year-over-year to $128.1 million, or 8.8% when excluding non-recurring sales from Q4 2023 [30] - Gross profit for Q4 was $53.2 million, representing 41.5% of net sales, up from 40.3% in the same period last year [31] - Net income for Q4 was $4.8 million, or $0.64 per diluted share, compared to $6.7 million, or $0.91 per diluted share in Q4 2023 [36] - For the full year, net sales were down 1.7% on a reported basis but up 5.3% on a recurring basis to $453.8 million [37] Business Line Data and Key Metrics Changes - Wholesale sales were $81.3 million, a decrease of 5.2%, but up 4.5% on a recurring basis [30] - Retail sales increased by 15.3% to $43.6 million, marking the segment's highest ever quarterly sales figure [30] - Contract manufacturing sales increased by 39.1% to $3.2 million [30] Market Data and Key Metrics Changes - The direct-to-consumer channel saw strong demand, particularly for the Durango and XTRATUF brands, leading to the highest sales volume quarter for the retail segment [6][7] - The Georgia Boot brand experienced a slight increase in Q4, driven by better boot weather and strong demand [14] Company Strategy and Development Direction - The company plans to increase investments in marketing to drive brand awareness and traffic to retail and wholesale partners [7] - There is a focus on launching new products and expanding into new categories, particularly for the Durango brand [10] - The company aims to reduce third-party exposure in manufacturing from China to below 35% by the end of 2025 while maintaining a competitive cost structure [43] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2025, anticipating low single-digit revenue growth, driven by strong retail segment gains and steady wholesale growth [44] - There is recognition of consumer uncertainty affecting retail partners' inventory commitments, but sell-through rates have been strong [27][41] - The company expects to face pressure from increased tariffs on products sourced from China, impacting gross margins modestly [46] Other Important Information - The company recorded a $4 million non-cash trademark impairment charge related to the Muck brand during Q4 [33] - A new share repurchase program of up to $7.5 million has been approved by the Board [40] Q&A Session Summary Question: Can you clarify recent mixed indicators and sell-through performance? - Management noted good sell-through from retailers but acknowledged their cautious approach moving forward [50][51] Question: What factors give confidence in low single-digit revenue growth for the year? - The order book is up year-over-year, but retailers are cautious with inventory orders [52][53] Question: Can you clarify the tariff impact on gross margins? - The 110 basis points impact is based on existing tariffs, and the company is evaluating pricing strategies to mitigate this [56][59] Question: What are the key growth drivers for 2025? - Key drivers include strong performance from XTRATUF, Muck, and women's and kids' offerings from Durango [64][66] Question: What is the sourcing exposure to Mexico and potential tariff impacts? - The company sources a very small proportion from Mexico, and while it would negatively impact them, it may disrupt competitors more significantly [81][82] Question: How is the momentum carried into the beginning of 2025? - The Muck and XTRATUF brands have continued strong performance, but guidance remains cautious due to non-recurring sales and inventory shifts [84][86]