• Q2 earnings down to $1.5m
  • Gross margin narrows to 32.8%
  • Sales climb 15.8%

US apparel and footwear company Rocky Brands saw its earnings slide in the second-quarter due to investments made to grow its brands.

Earnings amounted to US$1.5m in the three months to the end of June. This compared to earnings of $1.8m a year earlier.

Gross margin narrowed to 32.8% of sales, from 34.2% in the same period last year. This was driven by lower wholesale margins due to costs associated with a seeding programme with a key retail partner, and lower retail gross margin resulting from the group's transition to a web based retail platform.

Second quarter sales, however, were up 15.8% to $68.8m, boosted by an increase of 23.7% in wholesale revenues, and a 3.1% increase in retail sales.

"The investments we've made towards growing our brands and overall business continue to fuel record top-line results," said CEO David Sharp. "As we move into the back half of 2014, we believe we can continue to drive growth through compelling and innovative product introductions and begin delivering improved profitability through gross margin expansion and increased operating expense leverage."