Rocky Brands(US:RCKY)2026-01-12 20:32Financial Data and Key Metrics Changes - The company is on track to deliver 4%-5% revenue growth and approximately 10% earnings growth for 2025 [6][7] - The impact of tariffs was noted, with $2 million impact in Q3 and a projected $10 million impact in Q4 [11] - The balance sheet at the end of Q3 showed about $20 million of tariffs [11] Business Line Data and Key Metrics Changes - Significant growth was observed in the XTRATUF brand, which has expanded into a fashion product [22] - The Muck product has rebounded well after a period of over-inventory, with new product introductions like the RainScape [23] - The Rocky, Georgia, and Durango brands showed variable performance based on seasonal demand [24] Market Data and Key Metrics Changes - The company is seeing growth in the work boot segment, particularly among younger consumers who are embracing new technologies in footwear [32] - The Lehigh business has shown low double-digit growth over the last five years, providing insights into market trends and consumer behavior [36] Company Strategy and Development Direction - The company is focusing on leveraging its manufacturing capabilities to navigate tariffs and optimize production costs [8][14] - There is a strong emphasis on e-commerce growth and digital marketing to drive sales [41] - The company plans to experiment with expanding its product offerings in the Lehigh business, including prescription safety glasses [37] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving gross margins in the latter half of 2026 that exceed pre-tariff levels [12][40] - The competitive landscape is acknowledged as challenging, with Muck and XTRATUF being market leaders facing increased competition [45][47] Other Important Information - The company is carrying more raw materials due to sourcing changes, which may affect inventory levels [51] - Management highlighted the recurring revenue model of the Lehigh business as a key strength that is not well understood by the market [53] Q&A Session Summary Question: Can you discuss the tariff exposure and pricing strategies? - Management noted that retailers were understanding of price increases due to tariffs, and there was no significant negative impact on sales [10] Question: What are the growth opportunities for XTRATUF and Muck? - Management is excited about expanding XTRATUF into new markets and noted that Muck remains a steady business with consistent demand [30][31] Question: How does the company view the competitive landscape? - Management acknowledged the competitive nature of the rubber boot market and emphasized the need for innovation to stay ahead [45][48]