Footwear and clothing company Rocky Brands saw Q2 sales fall thanks to a loss of business with the US military and weak outdoor clothing sales.

Based on preliminary figures, the company expects sales for the three months to 30 June to hit US$57m, compared to $65.5m last year. It also announced details of the refinancing of a $30m loan.

The sales drop was blamed partly on a lack of business with the US military, which contributed $5.8m to footwear sales in the same period of 2005.

Chairman and CEO Mike Brooks added: "Our sales for the second quarter were negatively impacted primarily by weaker-than-expected results in our outdoor business for the month of June.

"We continue to experience softness in our traditional camouflage hunting apparel, coupled with challenges in our outdoor footwear, including increased competition and a shift in retail buying patterns.

"We are working hard to enhance our product assortment and improve our merchandising strategy in order to reinvigorate the top-line performance of our entire outdoor category."

Rocky Brands has refinanced a six-year, $30m loan, which will incur a charge of $400,000 in the second quarter, but should realise net savings of about $1m a year for the life of the loan.

The company will report full Q2 results and update its 2006 guidance on 27 July.