Rocky Brands (NASDAQ: RCKY) shares hit 52-week high following first quarter results and improving prospects for further earnings growth. The RCKY stock is up 35% in the last three months, moving the twelve-month surge to 71%. Its share has the 52-week trading range of $12.20 – $24.00 and its market cap stands around $176 million.
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The designer, manufacturer, and marketer of premium quality apparel and footwear brands also offers cash returns to investors in the form of dividends and share buybacks.
It offers the quarterly dividend of $0.11 per share, yielding around 1.84%. The company has also been aggressively working on share repurchase program, which is providing additional support to its dividend, earnings per share and share price. Rocky Brands recently announced a new share repurchase program of $7.5M.
Earnings Potential Strengthen its Future Performance
Although the company missed revenue estimates by $0.21 million and its net sales declined from the previous year period, its strong execution and investment in high margin businesses led it to post substantial growth in earnings.
Its first-quarter net sales declined to $61.4 million from $63.1 million a year ago. Growth in wholesale and retail segments partially offset the decline in military sales.
Jason Brooks, President, and Chief Executive Officer commented, “The new year is off to a strong start. Our wholesale and retail divisions continue to benefit from the strategies we’ve implemented to drive improved full price selling across our core work, western and outdoor categories.”
Its gross margin surged to 34.2% of sales in Q1, higher from 31.3% of sales in the past year period.
The company claims 290 basis points improvement in gross margin was due to higher wholesale and retail margins along with a lesser percentage of military sales – which usually offer lower gross margins than other businesses. Lower interest expense and taxes combined with improving margins led the company to double its earnings from previous year period. Its earning landed around $0.44 per share in Q1 from $0.22 per share in the year-ago period.
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