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WOLVERINE WORLD WIDE, INC

Companies in the footwear manufacturing industry focus on the production of a variety of

footwear, including athletic, casual, dress shoes, boots, slip-ons, and so forth (First Research,

2014). In the United States, approximately 250 companies operate in this industry. This

industry is concentrated with 90% of the revenue coming from the top 50 companies in the

U.S.

Major Markets

In the shoe and footwear manufacturing industry, the major market segments include

footwear wholesalers, footwear retailers, exports, and an “other” category. Figure 1 below

provides an overview of those segments, and their corresponding share in the industry.

© IBIS World

Footwear wholesalers make up more than 35% of the market while footwear retailers and

exports make up nearly 27%. Footwear wholesalers distribute their products to locations with

specialty retailers, mass merchandisers and department stores (Haider, 2014). According to

IBISWorld (2014), “wholesalers' share of revenue has declined, as it was about 38.0% of the

market in 2009, as the increased purchasing power and size of retailers has caused the

wholesaling function to be bypassed.”

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Through vertical integration operations, wholesalers are being bypassed by manufacturers

who are starting to own their distribution centers. Vertical integration have helped retailers

eliminate the costs associated with wholesaling, and consequently increase their market share

to 27.7%. Nike is the most well-known footwear retailer whose vertical integration strategies

and supply change power has boosted the company to the top. IBISWorld states that the

footwear retailer segment is expected to increase through the end of 2014 (Haider, 2014).

Exports account for as much as footwear retailers, with a market share of 27.6%. According

to IBISWorld (2014), “the volume of exports is

anticipated to expand over the five years to 2014

as the value of the dollar depreciates against major

importing nations, making goods that are

manufactured in the United States less expensive

on the international market.” Different countries

around the world are major export destinations for

U.S. manufacturers.

Some of these include Canada, South Korea,

Japan, Mexico and the United Arab Emirates. After the Great Depression, exports were one

of the key drivers in the shoe and footwear manufacturing industry (Haider, 2014).The graph

to the left shows a breakdown of export revenues by country.

© IBIS World

In the United States, domestically produced footwear have

been declining dramatically over the last few years. This

trend primarily stems from the cost of materials used to

manufacture shoes, which amounts to 50% of the total

costs. U.S. footwear companies have started to address this

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issue, generally by outsourcing production. Today, 99% of the shoes sold in the U.S. are

imported from other countries (First Research, 2014). China is the leader in exporting shoes

to the United States, with 67% of the United States’ imports coming from this country. Other

countries that provide large amounts of the United States’ imports can be seen in the graph to

the right.

© IBIS World

Rocky Brands

Rough Brands, Inc. starting as a descendent from the business, The Wm. Rivulets Shoe

Company, was reacquired in Nelsonville, Ohio in the year 1987 where its official workplaces

are right now found. Rough Brands was made out of the working resources of the first

organization built up in 1932 by William Brooks. The organization is a main planner, maker,

and advertiser of premium quality footwear and in addition clothing. Rough Brands showcase

its footwear and clothing under various very much perceived brand names including Rocky,

Georgia boot, Lehigh, Creative Recreation, and Michelin. Its marked product offerings are

then sorted out among its six target markets including open air, work, obligation, business

military, western and way of life (Rocky Brands, 2014).

Rocky Brand, Inc. has a particular vision: 'to wind up plainly a worldwide pioneer in the

clothing and footwear markets with progressively beneficial natural deals development.' To

finish this vision, they utilize a mission to expressly enchant buyers by conveying the best,

creative, agreeable footwear and attire (Rocky Brands, 2014).

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Financials

Revenue:

The figure to one side demonstrates that,

in the course of recent years, the general

income was genuinely steady with an

inconspicuous lessening. In particular, the

pay produced by the wholesaling is the

predominant giver, while the retailing contributed very nearly 20% of the entire income. The

military division has the minimum income, which arrived at the midpoint of around 1-2% of

the whole deals. In any case, general, the exhibitions of these three sections moved together

over these years (GlobalData, 2014).

Stock Price:

The line graph in Appendix I exhibits the patterns of Rocky Brands' stock cost in the course

of the most recent 12 months. By and large, the stock cost varied significantly, extending

from $13 to $20. In particular, as far as the main quarter, inferable from the contenders, and

the remark given by the well known rating site, the stock cost of Rocky Brands diminished to

the most minimal focuses in 2014. That is, amid February, Hollister declared that it would

offer men's tennis shoes, and amid a similar period, The Street brought Rocky Brands' rank

down to "hold" (Biesada, 2014).In expansion, for the last quarter of last financial year, the

accomplishment of the obtaining of the Creative Recreation Brand brought about an

extensive vacillation of the stock value, which at first dropped from $19, to the base, around

$13, amongst October and November, and after that it bounced to the top, around $20, inside

the accompanying two months (OneSources, 2014).

Total Assets: Appendix I demonstrate no significant change on each piece of the aggregate

resources over these years, which proposes Rocky Brands' money related structure is steady.
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This pie graph demonstrates the parts of the organization's aggregate resources. The net

receivables and stock resources are critical parts of the aggregate resources. What's more, the

measure of other noncurrent resources and net settled resources are imperative. Be that as it

may, money and other current resources contribute less to the whole resources. In this way,

the organization generally depends on its inventories (Biesada,2014).

Total Liabilities: Akin to its assets, Rocky Brands has maintained stable liabilities.. This

chart shows the organization of the total

liabilities of Rocky Brands. The long

term debt occupies the largest portions

of the total liabilities; while, the rest,

accounts payable, other current

liabilities and other noncurrent

liabilities, applied almost equal percentages. In other words, the company heavily depends on

the long term debt; however, in terms of the current liabilities, accounts payable is the main

contributor (Biesada, 2014).

Profitability: The table below shows the key ratios which measures the profitability of the

company. Compared with Timberland, Rocky Brands’ performance on the profitability still

lags that of Timberland. The company is also performing way below the industry benchmark.

Rocky Brands Timberland Industry Median Market Median

ROA 3.81% 11.27% 12.88% 2.11%

ROE 5.59% 15.73% 21.28% 11.68%

Net Profit Margin 2.80% 6.09% 8.93% 7.25%

(Hoover, 2014)
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2015 2016
Revenue USD Mil 269 260
Gross Margin % 33 29.5
Operating Income USD Mil 10 -3
Operating Margin % 3.9 -1.2
Net Income USD Mil 7 -2
Earnings Per Share USD 0.87 -0.29
Dividends USD 0.43 0.44
COGS 66.99 70.52
Gross Margin 33.01 29.48
SG&A 29.11 29.06
Operating Margin 3.9 -1.18
Net Int Inc & Other -0.3 -0.21
EBT Margin 3.6 -1.39
Asset Turnover (Average) 1.32 1.39
Return on Assets % 3.24 -1.14
Financial Leverage (Average) 1.36 1.34
Return on Equity % 4.71 -1.54
Return on Invested Capital % 4.16 -1.12
Interest Coverage 14.9 -4.87
Operating Cash Flow Growth % YOY 79.06 -8.36
Free Cash Flow Growth % YOY 163.85 5.52
Cap Ex as a % of Sales 3.21 2.27
Free Cash Flow/Sales % 5.42 5.91
Free Cash Flow/Net Income 2.21 -7.19
Current Ratio 8.76 6.8
Quick Ratio 3.3 2.67
Financial Leverage 1.36 1.34
Debt/Equity 0.17 0.1
Days Sales Outstanding 68.01 59.88
Days Inventory 164.11 145.34
Payables Period 24.52 20.59
Cash Conversion Cycle 207.6 184.63
Receivables Turnover 5.37 6.1
Inventory Turnover 2.22 2.51
Fixed Assets Turnover 9.96 9.58
Asset Turnover 1.32 1.39

Conclusion

The footwear fabricating industry is comprised of organizations that deliver athletic,

easygoing, dress shoes, boots, and different sorts of shoes. Organizations in the business

ought to have an exhaustive learning of the business and finish a full investigation. A

doorman's five drive investigation ought to be finished to get a decent photo of the allure of
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the organization. The size, patterns, significant markets, key achievement components and

rivalry ought to be examined also. There are more than 200 organizations in the United States

alone and considerably more that are situated in different nations. One fundamental contender

that is common in the business is Rocky Brands. Rough Brands practices for the most part in

the generation of superb boots additionally fabricates different sorts of footwear and clothing.

Rough Brands has some primary upper hands that coordinate with the key achievement

elements of the business. It likewise has a precisely arranged out development system. In

conclusion, it is imperative to finish a SWOT examination for Rocky Brands to recognize

what its qualities, shortcomings, openings, and dangers might be so it can perform to the best

of its capacity.
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Appendix I

(NASDAQ, 2014)
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Appendix II

(OneSource, 2014)

(OneSource, 2014)
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References

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Review. Retrieved May 18, 2014,

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Biesada, A. (2014, January 1). Rocky Brands, Inc. Retrieved May 18, 2014, from

http://www.hoovers.com/

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First Research Industry Profiles, Marketing Research, Industry Trends. (2014, March 3).

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http://www.firstresearch.com/industryprofiles.aspx?source=VRb

Haider, Zeeshan. (2014, March 1). Shoe and Footwear Manufacturing Industry. Retrieved

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NASDAQ- Rocky Brands, Inc. Interactive Stock Chart. (2014, May 15). . Retrieved May 18,

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http://www.rockybrands.com/about/

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http://finance.yahoo.com/q/co?s=RCKY+Competitors