In the second quarter of 2008, Rocky Brands rebounded from a $1.4 million loss in the same period last year to report a profit of $700,000. Net sales were up as well, by 2.9 percent to $60.5 million. The gross margin overall was down by 0.4 percentage points to 40.3 percent of sales, but the period in 2007 included $500,000 to reimburse prior expenses related to a canceled military order. Not counting this charge, the gross margin for the period ended June 30 would have been 40.0 percent. Wholesale sales were up by 1.4 percent to $42.5 million, while retails sales fell by 2.4 percent to $16.2 million. The military segment saw a huge increase, up by 500 percent to $1.8 million. The wholesale gross margin was up by 2.5 percentage points to 36.9 percent, helped by higher unit prices and more efficient operations that led to lower production costs. The gross margin for the retail division was down by 0.8 percentage points to 52.8 percent. The operating margin increased by 3.9 percentage points compared with last year to 5.8 percent.