Rocky Brands (NASDAQ:RCKY) continue to generate impressive financial numbers to support the share price performance. Its operational strategies are also resulting in higher than expected growth in margins.

The company’s revenue of $67 million in the fourth quarter topped analysts’ revenue estimate by $1.09 million. Also, its earnings of $0.37 per share have beaten the consensus estimate by $0.12 per share. Its stock soared 11% after announcing better than expected results for the final quarter of 2017.

Rocky Brands shares rallied more than 41% in the last twelve months. Rocky shares are currently trading around $18, slightly low from the 52-week high of $20.95 per share. RCKY stock has the 52-week trading range of $10.25 – $20.95.

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Fourth Quarter and Fiscal 2017 Results For Rocky Brands

Although its revenue has topped the consensus estimates for the fourth quarter, revenues of $67 million in Q4 were flat with the past year period. On the positive side, strong operational performance allowed the company to generate earnings of $4.4 million, relative to the loss of $0.6 million in the same period last year.

In Q4, its gross margin was standing at 34.8% of sales, higher from gross margin of 32.5% in a year ago period. Moreover, cost-cutting and operational efficiencies declined its SG&A expenses by 50 bps to 29.3% of sales.

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Its earnings for the full year grew to $9.6 million, relative to the loss of $2.1 million in the past year.

CEO said: “We concluded a productive 2017 with a very solid fourth quarter performance which was highlighted by mid-single-digit growth for both our wholesale and retail divisions. The product, marketing and distribution strategies we’ve recently implemented aimed at increasing full-price selling for our branded work, western and outdoor footwear businesses are contributing to better top and bottom line results.”

Cash Position Is Strong to Support Dividends

Rocky offers the quarterly dividend of $0.11 per share, yielding around 2.67%. With the growth in earnings, its cash generating potential also improved. The company generated free cash flow of $3.4 million in the trailing twelve months when its dividend payments accounted for only $3 million. Thus, the company’s dividends are not only safe; Rockey has the potential to increase the dividends at a robust pace in the coming days.

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