Rocky Brands' Optimistic Guidance Will Be Extremely Hard To Achieve
Summary
- Rocky Brands posted solid 1Q25 results, driven by favorable weather and a shift toward higher-margin DTC and premium wholesale sales.
- Despite heavy China exposure and surging tariffs, management maintained FY25 guidance, relying on inventory, rapid sourcing shifts, and price hikes.
- I am skeptical RCKY can offset tariff and supply chain headwinds; guidance seems overly optimistic given likely sales and margin pressures.
- With high leverage, limited cash, and unattractive valuation, I maintain my Hold rating, as downside risks outweigh the potential upside.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.