• Q4 earnings down to US$1.8m
  • Gross margin narrows to 35.4%
  • Sales climb 5.7%

US apparel and footwear company Rocky Brands has offered an optimistic outlook for its next fiscal despite booking a drop in fourth-quarter earnings.

In the three months to the end of December, net income dropped to US$1.8m from $2.5m a year earlier.

Earnings were hit by one-time expenses related to its acquisition of Creative Recreation. Excluding these, net income amounted to $2.2m.

Gross margin narrowed in the quarter to 35.4% from 36% in the year ago period, due to increased military sales versus last year, which carry lower margins.

Sales, however, were up 5.7% to $61.6m, versus revenues of $58.3m in the prior year period.

"While the overall retail environment remains challenging, we are optimistic about our prospects in 2014," said CEO David Sharp.

"The addition of Creative Recreation is an exciting new growth vehicle that we are confident will over time benefit from our operational and supply chain capabilities. At the same time, we believe there are opportunities to expand our market share in work, western and outdoor through compelling new product introductions and further evolving our direct to consumer channel."