Rocky Brands started the fiscal year with solid sales growth, but higher tariffs weighed on its profitability.

CEO Jason Brooks said the company’s momentum last year carried over, driving growth for the first quarter which ended March 31.

“Our first-quarter top-line performance was driven by continued strength in Xtratut and Muck across selling channels, combined with robust demand online for our entire brand portfolio.”

The retailer’s net sales for the quarter rose 9.1 per cent to $124.4 million, up from $114.1 million a year earlier.

Growth was supported across all segments, with wholesale sales increasing 4.8 per cent to $78.4 million, retail rising 16.5 per cent to $42.7 million, and contract manufacturing up 25 per cent to $3.3 million.

Despite the revenue gains, margins came under pressure.

Gross margin declined 470 basis points to 36.5 per cent, while income from operations fell 58.2 per cent to $3.6 million.

Operating expenses totalled $41.8 million, unchanged as a percentage of sales at 33.6 per cent.

Brooks said profitability was in line with expectations, citing higher sourcing costs linked to tariffs.

“These tariffs were partially offset with strong full-price selling, channel mix, and our mitigation actions last year, namely raising prices and diversifying our sourcing, including leveraging our own manufacturing facilities,” said Brooks, noting tariff-related costs increased by approximately $7.1 million year-on-year.

Looking ahead, the company expects margin pressure to ease.

“The impact from higher tariffs begins to lessen in the second quarter which, along with current top-line trends, provides a clear path back to gross margins in the low 40 per cent range and improvement in profitability over the second half of the year,” Brooks added.

Rocky Brands own a portfolio of sports and outdoor labels, such as Rocky, Georgia Boot, Durango, Lehigh Safety Shoes, The Original Muck Boot Company, Xtratuf, and Ranger.