RCKY - Rocky Brands: Boot Manufacturer Hoping For Macro-Economic Tailwinds In 2024

2024-02-12 03:25:49 ET

Summary

• Rocky Brands shares have returned a negative 8%+ over the past three years, while the S&P has returned over 40%.
• The company's trailing 12-month GAAP earnings are only half of its bottom line profits in fiscal 2022.
• Rocky's large debt load and subdued profitability may affect the value shareholders receive for the company's inventory over time.

Intro

We wrote about Rocky Brands, Inc. ( RCKY ) back in November 2020 when we assessed whether the momentum shares were undergoing at the time could continue to the upside. At the time, Rocky's customers in the wholesale segment were coming out of lockdown and opening up once more, which resulted in significant sales and earnings beats for Rocky's fiscal third quarter. This led to a strong rally in Rocky shares post the earnings announcement. Nevertheless, we remained cautious concerning our rating (Hold) due to the possibility of renewed lockdowns at the time, overhead resistance on the technical chart as well as an overextended valuation....

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