Operator: Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Rocky Brands Second Quarter 26 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, I would like to remind everyone that this conference is being recorded. And I will now turn the conference over to Brendon Frey of ICR.

Brendon Frey: 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 2 thousand. Such statements are based on information and 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-Ks for the year ended 12/31/2025. 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 will now turn the conference over to Mr. Jason S. Brooks, President and Chief Executive Officer of Rocky Brands. Jason?

Jason S. Brooks: Thank you, Brendon. 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 2 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 the year-ago period. We are encouraged by the broad-based strength across our portfolio with several brands delivering solid double digit growth. Led by XTRATUF, 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 refund 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 IEEPA 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. XTRATUF delivered another outstanding quarter extending its position as the fastest growing brand in the portfolio. Wholesale posted a large increase over last year, eCommerce 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 XTRATUF in store this year has quickly become 1 of our largest key accounts and is looking to add doors and styles going forward. We are also continuing to see the brand extend well beyond its marine roots as consumers adopt XTRATUF 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 Tusk Cruiser collection. Along with new Guy Harvey collaboration styles, for both women and girls. Looking ahead, Q3 and Q4 hold the largest set of prebook orders in the brand's history. With a substantial new fall line and a winter bookings ahead of last year, positioning XTRATUF for a strong back half of 2026 across both wholesale and ecommerce. Muck's US 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 good channels grew nicely, we continue to expand shelf space and land new partnerships. And we are encouraged by the continued strength in the farm and ranch despite the drought conditions weighing on 2 of our largest customers in the channel. In total, Muck sales were down modestly compared to the year-ago period, driven by a shift in the timing of sell-in to the brands international distributor. Georgia Boot delivered an outstanding quarter with broad-based growth across e-commerce and key and field accounts. Within key accounts, 1 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 prebooking 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 and work focused accounts, supported by employer voucher programs. The Carbon Flex wedge has quickly become the second highest selling franchise behind only the Romeo. And we will continue to expand BOA technology into women's products and warmer climate non waterproof options. Early response to our spring 27 line has also been encouraging. Led by new safety versions of the Romeo Superlight, and a refreshed eagle light collection. Rocky Work Outdoor and Western posted growth across all 3 categories. Wholesale was a particular strength as independent re retailers continue to report strong sell through and we also grew at a key national retailer level as new product drove great brand exposure. New fall 26 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 multistore chains and strong regional independence. Including a sizable new rugged casual program with a large southern sporting goods retailer in a Southeastern family shoe chain. Hunting and outdoor sales were also strong at several Midwest farm and ranch retailers brought in product early for the fall season. We continue to gain shelf space in industrial safety toe including a test program with a major national boot retailer and expanded regional programs in the Southeast and Texas. And ecommerce remains strong with our 2 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 Ridge Top Gore Tex collection posted healthy growth. Retail partners are also stocking up ahead of hunting season on our snake boots, and insulated wildcat collection. 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 2 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 a Rebel and Westward Collections, and our e-commerce partner accounts, with sporting goods, and outdoor channels, also had a good quarter. Deal performance trended positively as well with several regions strong increases. During the quarter, we also opened a new 80- to 82-door Midwest Farm and Ranch account with encouraging early sell through. And demand remains strong within our Hispanic retail base. New Workhorse and Shiloh product delivered in Q2 continues to perform well at retail, an early sentiment and bookings for spring 27 including our Rebel USA made boots, Workhorse Light, and the new women's 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. 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 continued 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 3rd and 4th 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 will turn it over to Tom.

Thomas D. Robertson: Thanks, Jason. There were several highlights from the second quarter led by 12% sales growth our highest growth rate since 2022. On top of this, gross margins reached a record level driven by an IEEPA refund receivable we recorded in the quarter, which in turn fueled a significant year-over-year increase in profitability. As I go through the Q2 financials and outlook, I will, at times, discuss results excluding the net impact of the tariffs to provide a clearer look at the underlying performance of the business. Reported net sales for the second quarter increased 12% year-over-year to $118.4 million which exceeded our expectations. By segment, wholesale sales increased 7.9% to $78.8 million Retail sales increased 21.8% to $36.2 million, and contract manufacturing sales were up 17.2% to $3.3 million. Turning to gross profit. For the second quarter, gross profit was $60.8 million or 51.4% of sales, compared to $43.3 million or 41.0% of sales in the same period last year. Excluding the net tariff impact of $15 million which includes $18 million of actual and expected IEEPA tariff refunds partially offset by approximately $3 million in IEEPA tariff costs versus a year ago. Second quarter 26 gross margins were approximately 38.7%. Included in this year's gross margins are incremental costs incurred as a result of adjusting our initial manufacturing sourcing and shipping plans and higher expedited freight in order to meet customer demand. We also had select incentives to capture additional shelf space with key customers and opportunistic selling of more discontinued styles the second quarter of this year. Gross margins by segment excluding the net benefit from tariffs, were as follows: Wholesale margins declined 34 basis points to 36.3% versus 40.5%. With the decline driven by the multiple headwinds I just outlined. Retail margins were up 120 basis points to 46.6%, 45.3%. Contract manufacturing margins were down 23 basis points to 9.3%. Operating expenses were $41.1 million or 34.7% of net sales in the second quarter of 26. Compared to $36.1 million or 34.2% of net sales last year. Excluding $700 thousand of acquisition related amortization in the second quarter of this year and last year, adjusted operating expenses were $40.4 million and $35.4 million respectively. As a percentage of net sales, adjusted operating expenses were 34.2% this year and 33.5% in Q2 last year. The increase in operating expenses as a percentage of net sales was driven primarily by a $1.1 million write-off of accounts receivable associated with a customer bankruptcy. Increased outbound freight rates from fuel surcharges, implemented in the second quarter and higher logistics costs associated with the increase in retail sales. Income from operations was $19.7 million, or 16.6% of net sales compared to $7.2 million or 6.8% of net sales in the year-ago period. Adjusted operating income improved to $20.4 million or 17.2% of net sales compared to adjusted operating income of $7.8 million or 7.4% of net sales a year ago. Driven by the recognition of the aforementioned net tariff impact this year. For the second quarter of this year, interest expense was $2.1 million compared with $2.5 million in the year-ago period. Reflecting the decrease in debt levels year-over-year. On a GAAP basis, we reported net income of $13.9 million or $1.83 per diluted share compared to net income of $3.6 million or $0.48 per diluted share in the second quarter of 25. Adjusted net income for the second quarter of 26 was $14.4 million or $1.90 per share compared with adjusted net income of $4.1 million or $0.55 per diluted share a year ago. Turning to our balance sheet, at the end of the second quarter, cash and cash equivalents stood at $2.6 million and our debt net of unamortized debt issuance costs totaled $122.4 million, a decrease of 7.6% since June 30th last year. During the second quarter, we repurchased approximately 54 thousand shares at an average price of $37.09 for a total of $2 million. We also announced that the Board approved an increase in our quarterly dividend to $0.17 which was paid out to shareholders in June. Inventories at the end of the second quarter were $173.5 million, down 7.1% compared to $186.8 million a year ago. And down 4.2% compared to $181 million at the end of 25. We are pleased with the quantity and quality of our inventory. As we are able to successfully move through some discontinued styles in the second quarter of this year. Now to our outlook. Based on our second quarter performance and updated bookings for the second half, as well as the net impact of tariffs, we are raising our guidance for 2026. We now expect revenue to increase approximately 8.5% over 2025 with the fourth quarter growing modestly faster than the third quarter. With respect to margins, our prior guidance was gross was for gross margins to be down modestly from the 40.9% we reported in 2025 inclusive of roughly $10 million in IEEPA tariffs that hit our P and L in the first half. As I mentioned when discussing our Q2 performance, we have experienced some additional cost headwinds, adjusting our manufacturing and sourcing plans to meet demand with expedited shipping, to continue during the second half of this year. We also are continuing to see higher inbound freight rates along with increased component costs due to higher oil prices. This is putting some additional pressure on gross margins. Which are now forecasted to be approximately 40% excluding the actual and expected tariff refund. With Q3 and Q4 gross margins improving sequentially into the low 40% range. Since our last earnings call, we incurred $1.1 million write-off in accounts receivable due to a customer bankruptcy and we are experiencing higher outbound freight costs due to fuel surcharges as well as a higher mix of retail segment sales. We are also stepping up our investment in digital advertising to capitalize on the momentum in the fast growing DTC business. Based on these factors, we are now expecting SG&A as a percentage of sales to increase slightly from the prior year. With an additional benefit of roughly $2 million expected in Q3, from the tariff benefit. The full year gross benefit will be approximately $20 million or $10 million on a net basis, Our plan is to invest a portion of these proceeds back into the business such as investing and expanding our distribution center as well as paying down debt. This all translates into EPS excluding the and expected tariff refund similar to last year's $3.26. And EPS on a reported basis to be in the neighborhood of $5. And finally, on a net basis, which excludes the $20 million refund, and the $10 million incremental IEPA tariffs, that flow through the P&L EPS would be around $4 a share. With that, that concludes our prepared remarks. Operator, we are now ready for questions.

Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press 1 on your telephone keypad. A final reminder to press the star keys. Our first question is from Jonathan Komp with Baird.

Jonathan Komp: Yes. Hi, thanks. Good afternoon. Tom, I want to start off. You mentioned this has been the strongest growth since 2022. Could you maybe share a little bit more detail on where you have seen acceleration across your business? And then I know, Jason, you mentioned part of the raised full year outlook includes a higher plan for Q3 and Q4. Can you just share more as you look into the second half, maybe what is shaping up better than you were thinking previously?

Thomas D. Robertson: Yep. Yeah. You know, I will start off, John. I think the really exciting thing here was that we are really seeing success across all of our brands. We walked into the quarter We knew we knew Durango had a very tough comparison to last year. And so we knew we were going to be down from LY because of some pre buys before the price increase last year. And then we know that, you know, Muck which was just down slightly for the quarter, is really just a timing issue with an international distributor. Outside of that, all of our brands grew you know, greater than our expectations. As Jason pointed out, we saw our strongest growth with XTRATUF for the quarter. You know, wholesale and ecommerce both outperformed expectations there. I would tell you the other thing that was that has been really great to see is the success that we are having in our own DTC on our branded websites. And so, you know, we are able to see that these investments that we are making you know, are driving more volume and more traffic to our websites. And so that is been a bigger surprise for us than we originally anticipated with those investments.

Jason S. Brooks: Yeah. And then just to talk a little bit more about Q3 and Q4. I think, John, we have seen some pretty significant bookings for pretty much all the brands. And so I think pretty excited about where that is at. We talked a little bit or I talked a little bit about how we have been able to gain some new shelf space. And we have seen those styles check at retail. And so we are seeing continued fill ins on those. And then as Tom just kind of mentioned, right, our ecommerce business, for all the brands, is performing very well. And we do not see any reason why that will not continue through Q3 and Q4 and which is really a little bit better, stronger, quarters for us. Of the type of product that we have.

Thomas D. Robertson: Yeah. Just to add on there, John, you know, the bookings are really exciting because our bookings are up really across all brands. And so, you know, I think our guidance there, the 8.5 to 8.5% sales growth is trying to bake in a little conservatism for how much of our at once business, which is historically our largest part of the business, you know, what that will be in fall given the order book that we are that we are looking at, for the next 2 quarters. And maybe just 1 follow-up there. There a meaningful benefit from new doors or new customers? Or are you seeing the strength really across your existing base of accounts? Yes. I mean, can start with this 1. For us, when we look at our key accounts, right, it is really easy for us to just retain if we have gained space or not. And so we have certainly executed on that with our larger key accounts, you know, whether it be in Western or Farm and Rancher, Sporting Goods. And so we are very excited about that because we know that is all incremental. As you look at the independent retailers, you know, the smaller independent retailers, it is hard to ascertain exactly shelf space gains there. But the bright the bright side of that is that our bookings are up meaningfully even for our field or independent retail accounts as well. So time will tell in Q3 and Q4 as we see what happens with at once. But we are very excited about the second half of the year.

Jason S. Brooks: Yeah. And I would just add on that I mentioned in my script about the BOA Boot. And it was tested in I do not know, 200 doors, I believe it was. And it did so well. it is it is being expanded into all doors. Right? And so when we see that happen, we are really confident about the sell through and therefore, more at once business for that style should be coming in Q3 and Q4 because we are expanding it into to more doors. And then I talked a little bit about that with XTRATUF and a large retailer. They did basically the same thing, tested it out last year, and it saw really good sell through. And it continues to add styles, but even adds doors so that is where I know we are picking up some shelf space.

Jonathan Komp: Okay. Great. And then the outlook for SG&A for the year, I just want to understand it looks like the full year growth more than a few percentage points higher than you were thinking previously. Could you maybe just give a little more airtime to the individual drivers or some of the investments you are choosing maybe to pull forward And then just more broadly, as you think about the operating margin potential for this business, retail, your some of your fastest growing brands seem like high margin, you know, segments of your business overall. So just what do you think that means longer term about the profitability of and where operating margin can go for Rocky?

Thomas D. Robertson: Yes, certainly. So if you were just to look at Q2 by itself, the accounts receivable write off for a large account of ours of $1.1 million was certainly unexpected. So if you were to strip that out of this quarter alone, we would have had slight operating leverage. That coupled with you know, we were optimistic that we would see fuel surcharges and fuel prices come back down to more normal levels. And so right now, we are running freight up about 80 basis points as a percent of sales And so we are baking that into our guidance for rest of the year. Hopefully, we can see some relief there, but we are baking that into to the guidance for the rest of the year. The other you know, from an operating margin perspective, know, I think we have got some challenges with, you know, short term challenges with our gross margin. Right? As we talked about you know, oil prices driving up our raw material and component costs. But then also, you know, given our order book, you know, we are essentially sourcing boots from the fastest source possible, not necessarily the most cost effective. Right? And so we walked into the year for 2026. You know, we had a plan of making a meaningful amount of our products in The Dominican Republic. The reality of it is given demand and sales I mean, and higher than we anticipated, we are having to kind of bypass the Dominican Republic in some cases. You know, it adds about 65 days of transit time just from Asia to The Dominican and then add a few more weeks The Dominican to finish the product. So we had to source more products out of Asia than we originally intended. And so that is that is impacting our margins. But as you look to the future, and we are able to, you know, build raw material inventories in The Dominican Republic, And we definitely see our operating margins increasing over the current year guidance. You know, the difficult part of getting the shelf space is we have executed on that, and now we just have to you know, optimize it by getting the product source from whether the right countries or our own in house manufacturing facilities. And so we will give more guidance in, you know, at the next call probably, on the future outlook for operating margins.

Jason S. Brooks: Yeah. I just want to add that our intention is still the plan we talked about. And moving more production to The Dominican. And we are gonna continue to do that. it is still the right decision, But like Tom said, because of the demand that we have had, we have had to make decisions to get the inventory here to get on the shelves. And so I believe it was the right decision for right now. But the idea going forward is to capitalize on our Dominican facility for sure.

Jonathan Komp: Okay. Great. Appreciate all the color. Thank you, John.

Operator: Our next question is from Janine Hoffman Stichter with BTIG.

Janine Hoffman Stichter: A few more, just digging into some of the input costs. So to make sure I understand, tariffs right now flip to a negative, but we also have new tariffs that are recently put in place. When will we see those start to take hold and flip to a year-over-year headwind And then you alluded to it a bit, but based on what you are seeing right now on raw materials and freight, would your expectation be for input costs to continue to rise? And then maybe just tying that altogether, how are you feeling about pricing? Are there any plans for further pricing action?

Thomas D. Robertson: Yes, no, good question, Janine. So, let's start with the component cost, right? So we are seeing about on average you know, a mid single digit 5%-6% cost increase on the first cost of the product. Right? When that would be, you know, for oil-based components typically, that are driving that. The other thing is container prices have crept up over you know, since our last call. Again, really driven by oil It was, you know, further exacerbated by the fact that we are having to use expedited you know, shipping carriers to get product here faster. And so we are we are continuing to evaluate that. As a as it relates to tariffs. Right? So you know, we have kind of guided the rest of the of the year at this 10%. So the new tariffs that went in place, the 301s, that went in place on Friday, Most of that will not the incremental piece will not hit us until the very end of 2026 or the beginning of 2027. As those tariffs will have to flow through our inventory and through the p and l. We are, you know, we are we are expecting that we will see the next round of 301s some point this year. there is been a lot of conversation around those happening kind of after the midterms. And so we are kind of waiting to see what happens with those. To determine pricing. For, you know, pricing changes for 2027. You know, if those happen as expected, the good news for us is that, you know, the forced labor 3 o ones impacted the Dominican Republic. it is a net 2.5% bad guy from where we were a week ago. But they are not on the ballot for any more 301s. So our whole plan of leveraging our Dominican facility will likely still make a ton of sense, coming into this year. Okay. Great. And then on pricing? Yeah. I think I think on pricing, you know, we are monitoring it. You know, if we were to take out the noise, from this quarter with the sourcing challenges, the expedited freight, all those things, our margins would have been just slightly up compared to LY. And so we are we are continuing to it, but we are we would be really interested to see where we land on these other 301s. To determine if and how big a price increase would need to be for 2027.

Janine Hoffman Stichter: Okay. Great. And then just shifting gears a little bit. On XTRATUF have really nice growth, seeing benefit from some new distribution. Can you just give us perspective, first, on how big that brand is right now? And then if you have a view on how big it will ultimately be as it gets more lifestyle distribution?

Thomas D. Robertson: Yeah. I mean, the interesting thing for the second quarter was XTRATUF was our largest brand for the quarter. And we are we are anticipating, you know, continued growth for the brand in the third and fourth quarter over LY. And so, you know, we think that brand will be, you know, just north of $100 million this year by the end of the year. Which would represent, you know, 30% growth for the brand over l y.

Jason S. Brooks: And as far as how big can it be? I think we are going to ride it, as big as we can make it. I think I think the brand has a lot of legs I think we can get into some different categories. Try to find different seasons, that make sense. I know we shared a little bit about how last year we got into, more fleece lined for more skiing areas in winter, and that went really well. We are excited about what that is gonna do this fall. And then if we can look at, you know, maybe more sandals or more just casual kind of shoes. But I think there is a long runway for this brand.

Janine Hoffman Stichter: Great. Thanks so much.

Jason S. Brooks: Thank you.

Thomas D. Robertson: Thank you.

Operator: Our last question will be from Unidentified Analyst with Titan Capital Management.

Bill Dezellem: A couple of questions. First of all, with your inventories down 7% year-over-year. How are you feeling about that level, particularly given that you are experiencing this sales strength? And maybe you already touched on this just given that you are expediting, but more perspective would be helpful.

Thomas D. Robertson: Yes. So I think big picture, sir, I do not think we really missed sales in the quarter. We were able to react fast enough We just were not able to optimize the country of origin, if you will. And so we are baking into our guidance probably about a $3 million headwind for continued sourcing changes whether it be sourcing from different countries of origin from originally planned or continuing to use expedited freight to get product here given the order book we have for fall.

Jason S. Brooks: I would I would also add some of the inventory reduction came from us being able to move these you know, discontinued items that Tom referenced where we were able to find some homes for those. So it is not necessarily it is a good thing. Right? We were able to move that inventory and get our inventory that we do need in the right place.

Thomas D. Robertson: Yeah. Just to say it 1 other way, Bill. Our discontinued inventory is down about little over 30%. This quarter, which is which is really exciting how clean the inventory is. Really, the cleanest it has been since the acquisition. Yep. I do not anticipate a significant increase in pairs to hit this volume. it is more about the timing of when we can get them. Where I where I do think we will have some meaningful investments is going to be in raw materials in The Dominican Republic. That number is low 7-figures, though. Because once we get it built up, we will be able to flow that, you know, with the appropriate amount of time.

Bill Dezellem: Great. Thank you. And then relative to your comments and your opening remarks that you brought some fall product in early, To what degree is that pulling from the third quarter and maybe this is unfair, but enhancing the second quarter number, but we will put some downward pressure on the third quarter number. Is that a reality, or are we not understanding what you were saying there correctly?

Thomas D. Robertson: I think just to touch on this a little bit, that was really the case for our Rocky brand that Jason talked about in and so it is not a meaningful pull ahead to the overall business. And, really, you know, if you think about the where we have been chasing inventory, it is not been in leather product for the most part. it is been more in our rubber product. So, you know, we have updated the full year guidance taking all of that into consideration, but we are still you know, increasing that guidance. You know, from the last call. So I do not think it is something you will see or feel in the third quarter.

Jason S. Brooks: And I think because we have been able to get it on the shelves, and we are hearing it is checking pretty good, I anticipate fill in business. It will not be the same as the bookings but it will definitely, you know, turn a little bit more in Q3 and Q4. So we should see some fill in business there as well. So, like Tom said, I do not think it will impact Q3 much at all.

Bill Dezellem: Right. that is that is helpful. And then 1 additional question, please. Relative to your comments about experiencing some extra cost to gain shelf space. Would you discuss kind of that more holistically, please?

Jason S. Brooks: So I-- so what I would tell you is where we have relationships with retailers to manage getting our boots on those shelves, we might have given them a little bit additional on the initial order. To secure that shelf space. But we still feel very comfortable about the margins that we are making on that. And the success that is happening there is allowing us again to get more fill in business. So it is just a way to convince the retailer to give us a little more shelf space.

Bill Dezellem: Was that something that was widespread throughout number of different retailers, or was it rather isolated to only a couple of retailers?

Jason S. Brooks: More isolated to just a couple retailers. But significant retailers because of the door count they have. Great. Thank you both.

Thomas D. Robertson: Yeah. Thank you. Thank you.

Operator: Thank you. There are no further questions at this time. I would like to hand the floor back over to Jason S. Brooks for any closing comments.

Jason S. Brooks: Great. Thank you very much. I just wanted to say thank you to our entire team here at Rocky Brands. We have been working really diligently through all the craziness going on. Thank you to our investors. Thank you to our board. And particularly, thank you to all our customers. And we really look forward to finishing 2026 strong. Thank you so much.

Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you again for your participation.