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Headquartered in Nelsonville, OH, Rocky Brands (RCKY - Free Report) designs, develops, manufactures and markets outdoor, work and military footwear as well as outdoor and work apparel and accessories.
They own a portfolio of well recognized brand names including Rocky Outdoor Gear, Georgia Boot, Durango, Lehigh, and the licensed brand, Dickies. Their product line includes rugged outdoor footwear, including hunting and hiking boots.
Disappointing Results and Guidance
The retailer reported a fourth quarter net loss of $0.6 million, or $0.09 per share, compared to net income of $1.4 million, or $0.18 per share in the year ago period.
Adjusted net income $0.18 per share was significantly short of the Zacks Consensus Estimate of $0.29 per share. This was the sixth consecutive miss for the company. Their average quarterly surprise for the last four quarters is more than (negative) 90%.
“Overall, gross margins were further pressured by the need to increase our promotional activity to help clear out Work, Western, and Hunting wholesale channels of inventory carried over in 2016 by many retailers following the warm winter of the prior year.”
“Adding to this headwind was the fact that store traffic was and continues to be down for the majority of our brick and mortar accounts as consumers increasingly shift their shopping to online,” said the CEO.
Falling Estimates
Analysts have been cutting their estimates for the company after quarterly results. Zacks Consensus Estimates for the current and next year have plunged to $0.80 per share and $0.96 per share respectively, down from $0.89 and $1.00 per share, before the results. Declining estimates sent the stock back to Zacks Rank # 5.
Most retailers have been struggling with weak traffic and heavy promotional environment. Further, rising trend for shopping online and concerns regarding the impact of border adjustment tax continue to hurt retailers.
Rocky Brands has taken a number of steps including increasing investments in their branded B2C websites, more digital advertising and reducing the expense structure, it remains to be seen whether these measures will be able to grow earnings.
“Retail—Apparel & Shoes” is currently ranked 218 out of 265 Zacks Industries (bottom 18%). Investors looking for exposure to this industry could look at Adidas (ADDYY), which is currently a Zacks Rank #1 (Strong Buy) stock.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>
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Bear of the Day: Rocky Brands (RCKY)
Headquartered in Nelsonville, OH, Rocky Brands (RCKY - Free Report) designs, develops, manufactures and markets outdoor, work and military footwear as well as outdoor and work apparel and accessories.
They own a portfolio of well recognized brand names including Rocky Outdoor Gear, Georgia Boot, Durango, Lehigh, and the licensed brand, Dickies. Their product line includes rugged outdoor footwear, including hunting and hiking boots.
Disappointing Results and Guidance
The retailer reported a fourth quarter net loss of $0.6 million, or $0.09 per share, compared to net income of $1.4 million, or $0.18 per share in the year ago period.
Adjusted net income $0.18 per share was significantly short of the Zacks Consensus Estimate of $0.29 per share. This was the sixth consecutive miss for the company. Their average quarterly surprise for the last four quarters is more than (negative) 90%.
“Overall, gross margins were further pressured by the need to increase our promotional activity to help clear out Work, Western, and Hunting wholesale channels of inventory carried over in 2016 by many retailers following the warm winter of the prior year.”
“Adding to this headwind was the fact that store traffic was and continues to be down for the majority of our brick and mortar accounts as consumers increasingly shift their shopping to online,” said the CEO.
Falling Estimates
Analysts have been cutting their estimates for the company after quarterly results. Zacks Consensus Estimates for the current and next year have plunged to $0.80 per share and $0.96 per share respectively, down from $0.89 and $1.00 per share, before the results. Declining estimates sent the stock back to Zacks Rank # 5.
Rocky Brands, Inc. Price and Consensus
Rocky Brands, Inc. Price and Consensus | Rocky Brands, Inc. Quote
The Bottom Line
Most retailers have been struggling with weak traffic and heavy promotional environment. Further, rising trend for shopping online and concerns regarding the impact of border adjustment tax continue to hurt retailers.
Rocky Brands has taken a number of steps including increasing investments in their branded B2C websites, more digital advertising and reducing the expense structure, it remains to be seen whether these measures will be able to grow earnings.
“Retail—Apparel & Shoes” is currently ranked 218 out of 265 Zacks Industries (bottom 18%). Investors looking for exposure to this industry could look at Adidas (ADDYY), which is currently a Zacks Rank #1 (Strong Buy) stock.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>