Rocky Brands, Inc. plummets on lackluster Q2 results
Shares of Rocky Brands, Inc. (Nasdaq: RCKY) are plunging today after the shoe maker reported disappointing second quarter.
For the three months ended June 30, Rocky’s net loss widened to $1.4 million, or $0.25 per diluted share, from a net loss of $0.2 million or $0.04 per diluted share in second quarter last year. Three analysts polled by Thomson Financial had anticipated a loss of $0.03 per share.
The Nelsonville, Ohio-based company said the net loss for the second quarter includes a one time non-cash charge of approximately $0.8 million, or $0.09 per diluted share after tax, due to a required write off of prepaid financing costs related to the refinancing of its term loans.
Rocky attributed its second quarter loss to weaker than expected wholesale revenues and an increase in production costs, coupled with an increase in closeouts.
“To put it in perspective, during fiscal year 2006 Rocky revised guidance two times and missed it the third time,” said Brean Murray Carrot & Co. analyst David Meyer. “Coming off a weak quarter investors are worried that the company will go through the same thing again as last year.”
Although Rocky’s bottom line disappointed, the retailer was able to increase sales from a year ago. Rocky booked net sales of $58.8 million, compared with net sales of $57.3 million in the second quarter of 2006.
“On the bright side the backlog was up 8%, better than estimated sales,” said Meyer.
Meyer says that going forward the company is implementing cost cutting initiatives that should kick in during fiscal year 2008, resulting in savings of up to $1 million.
Shares of Rocky tumbled 21.92%, or $3.29, to $11.72 mid-day Friday.
