Rocky Brands, Inc.

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Rocky Brands Second Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for questions. If anyone has technical difficulties during the conference, please press star zero for operator assistance at any time. I would like to remind everyone that this conference is being recorded. And I will now turn the conference over to Brendan Frey of ICR.

Thanks, everyone, for joining us. Before we begin, please note that today's session, including the Q&A period, may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Such statements are based on information assumptions available at this time and are subject to changes, risks, and uncertainties which may cause actual results to differ materially. We assume no obligation to update such statements. For a complete discussion of the risks and uncertainties, please refer to today's press release, our reports filed with the Securities and Exchange Commission, including our 10-K for the year ended December 31st, 2025. In addition, the company may refer to certain adjusted non-GAAP metrics on this call. Explanation of these metrics can be found in the earnings release filed earlier today. I'll now turn the conference over to Mr. Jason Brooks, President and Chief Executive Officer of Rocky Brands. Jason?

Thank you, Brendan. With me on today's call is Tom Robertson, our Chief Operating and Chief Financial Officer. After our prepared remarks, we will take questions. After two consecutive quarters of high single-digit sales growth, Our momentum accelerated in the second quarter with a sales increase of 12% on top of a 7.5% gain in a year-ago period. We are encouraged by the broad-based strength across our portfolio with several brands delivering solid double-digit growth, led by Extra Tough, followed by Georgia, Rocky, and our Lehigh B2B safety shoe business. Direct-to-consumer sales were particularly strong, while increased sell-through in our wholesale channel during the second quarter fueled strong bookings for the second half of the year. Tom will walk through the financials in detail shortly, but as you saw from our earnings release, we recorded a tariff-free fund receivable in Q2. We are very pleased to start receiving these funds after the amount of work and costs we incurred following the implementation of last year's IEPA tariffs. The actual and expected refund had a very positive impact on gross margins and profitability this quarter, and we plan to reinvest a portion into the business while also paying down debt. Now, let me walk you through our second quarter brand performance. Extra Tough delivered another outstanding quarter, extending its position as the fastest-growing brand in the portfolio. Wholesale posted a large increase over last year. E-commerce bested last year's already strong results, and Marketplace continued to grow at a healthy clip, combining to push the brand total up significantly across all channels. Account momentum remained broad-based, Top performers included our authorized Amazon partner, a major outdoor retailer, and our fastest growing Western market account. A major sporting goods retailer that brought Extra Tough in store this year has quickly become one of our largest key accounts and is looking to add doors and styles going forward. We're also continuing to see the brand extend well beyond its marine roots as consumers adopt ExtraTuff for everyday use. Our product lineup continued to perform well, led by the 15-inch Legacy boot alongside strong sales of our ankle deck boot styles in olive and duck camo. The new spring-summer line also delivered, highlighted by new ADB colorways and the Kids Tuffs Cruiser collection. along with new Guy Harvey collaboration styles for both women and girls. Looking ahead, Q3 and Q4 hold the largest set of pre-book orders in the brand's history, with a substantial new fall line and a winter bookings ahead of last year positioning Extra Tough for a strong back half of 2026 across both wholesale and e-commerce. Muck's U.S. business maintained good momentum across both our branded e-commerce site and wholesale partners, with both field and key accounts up year over year. Our new RainScape collection, along with the brand's chicken boot and original ankle boot styles, performed well, helping offset some softness in the Arctic products due to the milder, drier spring versus the extended cold weather we saw last year. Hardware and sporting goods channels grew nicely as we continued to expand shelf space and land new partnerships, and were encouraged by the continued strength in the farm and ranch despite the drought conditions weighing on two of our largest customers in the channel. In total, muck sales were down modestly compared to a year ago period, driven by a shift in timing of sell-in to the brand's international distributor. Georgia Boot delivered an outstanding quarter with broad-based growth across e-commerce and key and field accounts. Within key accounts, one of our largest farm and ranch customers expanded our best-selling wedge into more than 500 additional doors, and a large work and western retailer significantly expanded its Georgia Boot assortment behind the success of the BOA Carbon Flex Wedge. Our largest online retail partner also delivered exceptional growth after pre-booking ahead of the season and replenishing steadily throughout the quarter. Field accounts grew nicely despite ongoing macro uncertainty and cautious retailer inventory management. With growth widespread across the territories and healthy carryover business in work-focused accounts supported by employer voucher programs. The CarbonFlex wedge has quickly become the second highest selling franchise behind only the Romeo and will continue to expand BOA technology into women's products and warmer climate non-waterproof options. Early response to our spring 2027 line has also been encouraging, led by new safety versions of the Romeo SuperLite and a refreshed EagleLite collection. Rocky Work Outdoor and Western posted growth across all three categories. Wholesale was a particular strength as independent retailers continued to report strong sell-through, and we also grew at a key national retailer level as new product drove great brand exposure. New Fall 2026 product also arrived early, allowing us to ship several new fall styles during Q2 and setting up early retail sell-in and replenishment opportunities. Account growth was well balanced between national multi-store chains and strong regional independence, including a sizable new rugged casual program with a large southern sporting goods retailer and a southeastern family shoe chain. Hunting and outdoor sales were also strong as several Midwest farm and ranch retailers brought in product early for the fall season. We continue to gain shelf space in industrial safety tow, including a test program with a major national boot retailer and expanded regional programs in the southeast and Texas. And e-commerce remains strong with our two largest online retail partners. Product highlights include continuing strong sell-through on our Ride LTE collection, with a new duck camo colorway generating strong fall bookings and reaching market early in Q2. BOA-equipped safety toe styles continue to gain strength, and our Outback and Ridgetop Gore-Tex collection posted healthy growth. Retail partners are also stocking up ahead of hunting season on our snake boots and insulated Wildcat collections. Durango sales were in line with our expectations down year over year, driven entirely by the key account channel, which lapped significant bulk buy orders placed by two major chains last year ahead of 2025 price increases. Excluding that dynamic, the remainder of the key account business posted solid growth. The farm and ranch channel was led by our Rebel and Westward collections and our e-commerce partner accounts along with Sporting Goods and Outdoor Channels also had a good quarter. Field performance trended positively as well with several regions' strong increases. During the quarter, we also opened a new 82-door Midwest Farm and Ranch account with encouraging early sell-through and demand remained strong within our Hispanic retail base. New Workhorse and Shiloh product delivered in Q2 continues to perform well at retail, and early sentiment and bookings for Spring 27, including our Rebel USA made boots, Workhorse Lite, and the new women's Shiloh and Crush styles are solid, giving us confidence heading into the back half of the year. Commercial military and public service exceeded our Q2 expectations, up mid-single digits versus last year, continuing the positive momentum from strong Q1. Public service outperformed expectations, while commercial military finished roughly flat to LY, but with positively underlying momentum. And given the current geopolitical environment, we expect commercial military demand to remain strong. B2B Lehigh delivered another strong quarter of growth driven by continued success in new customer acquisitions as we added a substantial number of new accounts. We also expanded our product portfolio with the addition of new brands further strengthening our ability to meet customers' needs across a broader range of industries and applications. Customer spending remained resilient despite ongoing cost pressure, with subsidy utilization and average subsidy dollars continuing to trend upward as employers remain committed to providing employees with PPE. While tariff uncertainty, inflationary pressure continue to influence the operating environment, Lehigh has successfully offset these headwinds through strong new customer growth, expanded product offerings, and continued execution of our strategic initiatives. As I just detailed, we have good momentum across our business heading into the second half. While we feel confident in the strength of our brands and our product offering, we think it is prudent to balance this optimism with some level of conservatism given the shifting tariff landscape and uncertainty regarding the near-term health of the consumer. Tom will discuss our outlook in detail, but from a high level, we are taking up our full year guidance to reflect our Q2 top line outperformance and are modestly raising our sales projections for the third and fourth quarter. I want to thank our teams for their hard work driving the business forward while navigating the shifting tariff landscape. I am confident we are well positioned to continue capitalizing on the opportunities to expand sales and profitability over the remainder of 2026 and beyond. With that, I'll turn it over to Tom. Thanks, Jason.