Earnings Highlights and Review: Buckle Reported Better than Expected Earnings

Research Desk Line-up: American Eagle Outfitters Post Earnings Coverage

LONDON, UK / ACCESSWIRE / June 7, 2017 / Pro-Trader Daily publishes post-earnings coverage on The Buckle, Inc. (NYSE: BKE) following the Company’s posting of its first quarter fiscal 2017 financial results on May 18, 2017. The Kearney, Nebraska-based teen clothing retailer reported a y-o-y decline in net sales and earnings. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Get more of our free earnings reports coverage from other constituents of the Apparel Stores industry. Pro-TD has currently selected American Eagle Outfitters, Inc. (NYSE: AEO) for due-diligence and potential coverage as the Company reported on May 17, 2017, its financial results for Q1 which ended on April 29, 2017. Register for a free membership today, and be among the early birds that get access to our report on American Eagle Outfitters when we publish it.

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Earnings Reviewed

Buckle’s net sales for the 13-week fiscal quarter ended April 29, 2017 decreased 12.8% to $212.3 million compared to net sales of $243.5 million for the 13-week fiscal quarter ended April 30, 2016. The Company’s sales numbers were in-line with analysts’ consensus estimates.

For Q1 2017, Buckle’s comparable store net sales dropped 12.7% on a y-o-y basis. The Company’s online sales decreased 7.2% to $21.8 million for the reported quarter compared to net sales of $23.5 million for the prior year’s same quarter.

During Q1 2017, Buckle’s gross margin was 38.5%, down approximately 40 basis points from 38.9% for Q1 2016. The decline was primarily attributable to deleveraged occupancy, buying and distribution expenses, which had about a 300 basis point impact, partially offset by a 70 basis point improvement in merchandise margins for the reported quarter. Furthermore, the Company’s gross margin benefited approximately 200 basis points as a result of completion of its old Primo Card loyalty program in FY16, where the rewards were recorded as a cost of goods sold at the time of redemption.

Buckle’s operating margin for Q1 2017 was 11.8% compared to 15% for Q1 2016. The Company’s other income for the reported quarter totaled $0.9 million compared to $0.4 million for the prior year’s same quarter.

Buckle’s net income for Q1 2017 was $16.3 million, or $0.34 per diluted share, compared with net income of $23.1 million, or $0.48 per diluted share, for Q1 2016. The Company’s numbers surpassed Wall Street’s expectations of $0.34 per share.

Balance Sheet

As of April 29, 2017, Buckle’s inventory totaled $119.4 million, which was down approximately 14% from inventory of $138.8 million as of April 30, 2016, while the Company’s total cash and investments were $276.7 million compared to $264.6 million at the end of FY16 and $223.9 million as of April 30, 2016.

Buckle ended Q1 2017 with $164.9 million in fixed assets, net of accumulated depreciation. The Company’s capital expenditures for the reported quarter were $3.9 million and depreciation expense was $7.9 million. During Q1 2017, the Company spent $3.5 million for new store construction, store remodels, and store technology upgrades; and $0.4 million for capital spending at the corporate headquarters and distribution center.

For FY17, Buckle expects capital expenditures to be in the range of $25 million to $30 million, which includes primarily new store and store remodeling projects and certain IT investments.

On May 31, 2017, Buckle announced that at its quarterly meeting of the Board of Directors, held on May 30, 2017, the Board authorized a $0.25 per share quarterly dividend to be paid to shareholders of record at the close of business on July 14, 2017, with a payment date of July 26, 2017.

Store Update

Buckle ended the quarter with 462 retail stores in 44 states compared to 468 stores in 44 states at the end of Q1 2016. Additionally, the Company’s total square footage was 2.367 million square feet as of the end of the reported quarter compared to 2.383 million square feet at the year ago same period.

Change in CFO

In the earnings press release Buckle announced that Karen B. Rhoads, Senior Vice President of Finance and Chief Financial Officer, will retire from her current position with the Company later this summer. Ms. Rhoads will continue to serve as a member of the Company’s Board of Directors.

Ms. Rhoads joined the Company in 1980, working part-time in the corporate office while attending college at Kearney State College, and upon graduation, she worked in public accounting before returning to the corporate office in 1987 to lead the Company’s growing finance team. She was named Vice President of Finance and Chief Financial Officer in April 1991 and Senior Vice President of Finance in March 2014.

Stock Performance

On Tuesday, June 06, 2017, The Buckle’s stock closed the trading session at $16.50, falling 1.79% from its previous closing price of $16.80. A total volume of 366.51 thousand shares were exchanged during the session. Shares of the Company have a PE ratio of 8.74 and have a dividend yield of 6.06%. The stock currently has a market cap of $831.93 million.

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