US Q2 Briefly – Rocky Brands, Carters, Columbia Sportswear Company

Here are the latest Q2 filings from US footwear and apparel firms:

Rocky Brands

Rocky Brands said second quarter net sales rose 23.1% to US$162m for the three months ended June 30, from $131.6m in the second quarter of 2021. Retail sales were up 16.4% last year to $26m, up from $22.3m. The company reported net income of $3.9m compared to $0.9m in the second quarter 2022, with adjusted net income of $2.5m compared to $7.4m. Gross margin narrowed to 33.2% from 37.4% last year, while adjusted gross margin, which did not include the $2.3 million inventory purchase accounting adjustment, was 39.1%. The decrease in gross margin was primarily due to increases in product costs, inbound freight costs, and other shipping and logistics costs compared to the year-ago period.

“We continued to experience solid demand for our portfolio of leading brands during the second quarter,” said CEO Jason Brooks. “Our focus on developing innovative, functional footwear at accessible price points is driving share gains across multiple markets led by Kama, Western and Outdoors. Although we did not experience any noticeable sales slowdown during the first half of 2022 due to rising inflation and general economic uncertainty, our results were negatively impacted by higher-than-expected costs in our supply chain. We took action at the beginning of the year to address some of the cost pressures, and recently implemented price increases to help offset the additional margin headwinds that have emerged over the past few months. We believe these moves will improve the coming quarters, which, along with our previously announced expense synergy savings, position the Company to deliver sustained, profitable growth over the long term. ,

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“After a strong start to the year, our sales slowed in the second quarter,” said Michael Casey, Carter’s Chairman and CEO.

For the three months ended July 2, net sales declined US$45.7m, or 6.1%, to $700.7m, driven by declines in the company’s US retail and US wholesale sales, partially offset by growth in its international sales. US retail and US wholesale sales declined 11% and 3%, respectively. International net sales increased 7%, while US retail comparable net sales declined 8%. Changes in foreign currency exchange rates used for translation in the second quarter of fiscal 2022 had an adverse effect on consolidated net sales of approximately $2.3m, or 0.3%, compared to the second quarter of fiscal 2021. Net income was $37m compared to $71.6m in the second quarter of FY21. Adjusted net income was $52.1m compared to $73.7m last year.

Casey said Carters has revised its outlook for the balance of the year to reflect trends in business, and market risks related to inflation and the related impact on consumer demand. For fiscal year 2022, the company anticipates net sales of approximately $3.25-$3.3bn and adjusted operating income of approximately $415-$440m compared to $500.8m in fiscal 2021.

Columbia Sportswear Company

Columbia Sportswear Co said net sales rose 2%, or 4% in constant currency, to a record US$578.1m, from $566.4m in the same period last year in the second quarter ended June 30. Net sales growth primarily reflects growth in the US, Canada, Europe-direct, Japan and Korea, partly due to significantly reduced net sales from the Russia-based distributor and China. Meanwhile, net income declined 82% to $7.2m from $40.7m last time. Gross margin declined 240 basis points to 49.2% from 51.6% for the comparable period in 2021. Gross margin contraction was primarily driven by higher inbound freight costs and lower wholesale margins, partially offset by favorable channel and regional sales mix.

Net sales are expected to increase 10-12% to $3.44-$3.5bn over the company’s 2022 financial outlook. Prior guidance was expected to increase by 16-18% to $3.63-$3.69bn. Net income is now estimated to be between $315m and $340m, compared to prior guidance of $363-$382m.


Skechers reported record quarterly sales of US$1.87bn for the three months ended 30 June, representing an increase of 12.4% year-on-year. This increase was the result of a 15.4% increase in domestic sales and a 10% increase in international sales, primarily driven by strength in wholesale sales. All sectors experienced growth with wholesale growth of 18.3% and direct-to-consumer growth of 4.3%. On a constant currency basis, sales increased 16.4%. Net income was $90.4m compared to $137.4m last time. Gross margin was 48.1%, a decrease of 330 basis points, primarily offset by higher per-unit freight costs partially offset by an average selling price increase.

Skechers believes that for fiscal year 2022, it will achieve sales between $7.2-$7.4bn.

Levi Strauss & Co.

Reporting its results for the three months on 29 May, Levi Strauss & Company said net revenue of US$1.5bn increased 15% on a reported basis and 20% on a constant-currency basis, thanks to adverse currency effects. Excluding $47m. Direct-to-consumer (DTC) net revenue increased 16%, driven by stores operated by the company. Net income, meanwhile, fell to $49.7m from $64.7m in the same quarter the prior year, primarily due to a $76m decline in operating income from $107m the year before. Levi Strauss attributed the decline in operating income to $60m in tariffs related to the Russia-Ukraine crisis. Adjusted net income was $117m compared to $93m in the prior year quarter. Gross margin was 58.1% of net revenue as compared to 58.8% last time.

The company reaffirmed expectations for FY2022 with net revenue growth of 11-13% over FY21 to between $6.4-$6.5bn.

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