Buckle(BKE) - 2026 Q2 - Quarterly Report

Part I. Financial Information (unaudited) This section presents the unaudited condensed consolidated financial statements and management's analysis of financial condition and results Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements and notes, highlighting growth in key financial metrics Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet Highlights (Amounts in Thousands) | Metric | August 2, 2025 | February 1, 2025 | | :-------------------------------- | :------------- | :--------------- | | ASSETS | | | | Cash and cash equivalents | $297,811 | $266,929 | | Inventory | $142,486 | $120,789 | | Total current assets | $493,302 | $439,209 | | Total assets | $1,028,632 | $913,173 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Accounts payable | $72,630 | $45,982 | | Total current liabilities | $229,554 | $213,932 | | Total liabilities | $552,477 | $489,369 | | Total stockholders' equity | $476,155 | $423,804 | Condensed Consolidated Statements of Income Condensed Consolidated Statements of Income Highlights (Amounts in Thousands, Except Per Share) | Metric | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | SALES, Net | $305,737 | $282,392 | $577,858 | $544,872 | | Gross profit | $145,009 | $132,534 | $271,985 | $253,231 | | INCOME FROM OPERATIONS | $56,341 | $48,260 | $99,887 | $90,656 | | NET INCOME | $45,006 | $39,255 | $80,199 | $74,098 | | EARNINGS PER SHARE: Basic | $0.90 | $0.79 | $1.60 | $1.49 | | EARNINGS PER SHARE: Diluted | $0.89 | $0.78 | $1.59 | $1.48 | Condensed Consolidated Statements of Stockholders' Equity Stockholders' Equity Changes (Amounts in Thousands) | Metric | Fiscal 2025 (26 Weeks Ended Aug 2, 2025) | Fiscal 2024 (26 Weeks Ended Aug 3, 2024) | | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Balance, Beginning of Period | $423,804 | $413,220 | | Net income | $80,199 | $74,098 | | Dividends paid on common stock | ($35,810) | ($35,543) | | Amortization of non-vested stock grants | $7,962 | $6,869 | | Balance, End of Period | $476,155 | $458,644 | Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows Highlights (Amounts in Thousands) | Metric | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Net cash flows from operating activities | $89,412 | $77,488 | | Net cash flows from investing activities | ($22,720) | ($22,892) | | Net cash flows from financing activities | ($35,810) | ($35,543) | | NET INCREASE IN CASH AND CASH EQUIVALENTS | $30,882 | $19,053 | | CASH AND CASH EQUIVALENTS, End of period | $297,811 | $287,266 | Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements 1. Basis of Presentation - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information and do not include all footnotes required for complete financial statements. Due to the seasonal nature of the business, interim results are not necessarily indicative of a full year's operations[13] 2. Revenues - The Company operates as a single reportable segment, retailing casual apparel, footwear, and accessories through 440 stores in 42 states and an e-Commerce platform[15] Online Revenues as Percentage of Net Sales | Period | August 2, 2025 | August 3, 2024 | | :----------------------- | :------------- | :------------- | | Thirteen Weeks Ended | 14.3% | 13.1% | | Twenty-Six Weeks Ended | 15.6% | 14.9% | Major Product Lines as Percentage of Net Sales | Merchandise Group | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :------------------ | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | Denims | 36.1% | 35.3% | 39.7% | 39.1% | | Tops (including sweaters) | 29.5% | 29.9% | 28.4% | 28.6% | | Accessories | 11.8% | 11.7% | 11.3% | 11.3% | | Sportswear/Fashions | 11.0% | 12.2% | 9.6% | 10.2% | | Footwear | 5.0% | 5.5% | 5.1% | 5.7% | | Casual bottoms | 1.7% | 1.1% | 1.6% | 1.3% | | Outerwear | 0.4% | 0.3% | 0.6% | 0.5% | | Kids | 4.5% | 4.0% | 3.7% | 3.3% | | Total | 100.0% | 100.0% | 100.0% | 100.0% | 3. Earnings Per Share Earnings Per Share (EPS) (Amounts in Thousands, Except Per Share) | Metric | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | Basic EPS | $0.90 | $0.79 | $1.60 | $1.49 | | Diluted EPS | $0.89 | $0.78 | $1.59 | $1.48 | 4. Investments Summary of Investments as of August 2, 2025 (Amounts in Thousands) | Investment Type | Amortized Cost or Par Value | Estimated Fair Value | | :------------------------ | :-------------------------- | :------------------- | | Held-to-Maturity Securities (State and municipal bonds) | $22,118 | $22,151 | | Trading Securities (Mutual funds) | $26,480 | $29,630 | - All held-to-maturity securities are classified as short-term investments, while trading securities, held in a Rabbi Trust for the deferred compensation plan, are classified as long-term investments[21] 5. Fair Value Measurements - The Company's trading securities (mutual funds) are measured at fair value on a recurring basis and are classified as Level 1, indicating publicly traded quoted prices in active markets[23][25] - Held-to-maturity securities, primarily state and municipal bonds, are not carried at fair value on the balance sheet but have fair values based on Level 2 inputs (quoted market prices and yields for similar securities)[24][25] 6. Leases - The Company's lease portfolio primarily consists of retail store locations, with new store leases typically having a 10-year initial term and renewal options[27] Total Lease Cost (Amounts in Thousands) | Period | August 2, 2025 | August 3, 2024 | | :----------------------- | :------------- | :------------- | | Thirteen Weeks Ended | $30,702 | $29,721 | | Twenty-Six Weeks Ended | $62,561 | $60,944 | - As of August 2, 2025, the weighted-average remaining lease term was 6.2 years, and the weighted-average discount rate was 6.4%. The total operating lease liability was $375.8 million[31][32] 7. Supplemental Cash Flow Information - Cash paid for income taxes during the twenty-six week period ended August 2, 2025, was $31.1 million, compared to $30.5 million in the prior year[34] 8. Stock-Based Compensation - The Company has restricted stock plans for employees, executives, and non-employee directors, with 2,574,780 shares available for grant as of August 2, 2025[35] Stock-Based Compensation Expense (Amounts in Thousands) | Period | August 2, 2025 | August 3, 2024 | | :------------------------------------ | :------------- | :------------- | | Stock-based compensation expense, before tax (13 weeks) | $3,780 | $3,343 | | Stock-based compensation expense, before tax (26 weeks) | $7,962 | $6,869 | - As of August 2, 2025, there was $20.3 million of unrecognized compensation expense related to non-vested shares, expected to be recognized over approximately 2.0 years[41] 9. Recently Issued Accounting Pronouncements - The Company plans to adopt ASU 2023-09 (Income Taxes) effective for fiscal 2025, with no material impact anticipated on its consolidated financial statements[42] - The Company is evaluating ASU 2024-03/2025-01 (Expense Disaggregation Disclosures), effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027[43] 10. Segment Reporting - The Company operates as a single operating and reporting segment, with its President and CEO serving as the Chief Operating Decision Maker (CODM)[44] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the Company's financial condition, operational results, liquidity, and critical accounting policies Executive Overview - Management considers comparable store sales, merchandise margin, operating margin, and cash flow and liquidity as key performance indicators[48] - The Company believes existing cash, short-term investments, and cash flow from operations will be sufficient to fund current and long-term anticipated capital expenditures and working capital requirements for the next several years[52] Results of Operations Key Financial Performance Metrics (Percentage of Net Sales and YoY Change) | Metric | 13 Weeks Ended Aug 2, 2025 (% of Net Sales) | 13 Weeks Ended Aug 3, 2024 (% of Net Sales) | 13 Weeks YoY Change | 26 Weeks Ended Aug 2, 2025 (% of Net Sales) | 26 Weeks Ended Aug 3, 2024 (% of Net Sales) | 26 Weeks YoY Change | | :-------------------------------------------------- | :----------------------------------------- | :----------------------------------------- | :------------------ | :----------------------------------------- | :----------------------------------------- | :------------------ | | Net sales | 100.0% | 100.0% | 8.3% | 100.0% | 100.0% | 6.1% | | Cost of sales | 52.6% | 53.1% | 7.3% | 52.9% | 53.5% | 4.9% | | Gross profit | 47.4% | 46.9% | 9.4% | 47.1% | 46.5% | 7.4% | | Selling expenses | 24.2% | 25.0% | 4.5% | 24.4% | 24.7% | 4.9% | | General and administrative expenses | 4.8% | 4.8% | 9.1% | 5.4% | 5.2% | 10.3% | | Income from operations | 18.4% | 17.1% | 16.7% | 17.3% | 16.6% | 10.2% | | Net income | 14.7% | 13.9% | 14.6% | 13.9% | 13.6% | 8.2% | - Net sales for the second quarter of fiscal 2025 increased by 8.3% to $305.7 million, with comparable store net sales up 7.3% and online sales up 17.7%[53] - Year-to-date net sales increased by 6.1% to $577.9 million, with comparable store net sales up 5.2% and online sales up 10.5%[54] - Gross profit as a percentage of net sales increased to 47.4% for the second quarter and 47.1% year-to-date, driven by higher merchandise margins and leveraged buying, distribution, and occupancy expenses[58][59] - Selling, general, and administrative expenses decreased as a percentage of net sales due to reductions in non-recurring digital commerce investments and store labor expenses, partially offset by increased incentive compensation accruals[60][61] Liquidity and Capital Resources - As of August 2, 2025, the Company had working capital of $263.7 million, including $297.8 million in cash and cash equivalents and $22.1 million in short-term investments[64] - Cash flow from operations for the first two quarters of fiscal 2025 was $89.4 million, an increase from $77.5 million in the prior year[64] - Total capital expenditures for fiscal 2025 are estimated to be $50.0 million to $55.0 million, primarily for planned store projects and technology investments[67] - The Company has an available unsecured line of credit of $25.0 million with Wells Fargo Bank, N.A., which was not utilized during the first two quarters of fiscal 2025 or 2024[69] Critical Accounting Policies and Estimates - Key accounting policies and estimates include revenue recognition (net of returns, gift cards, and rewards), inventory valuation (lower of cost or net realizable value), income taxes (deferred tax assets/liabilities), leases (right-of-use assets and liabilities), and investments (held-to-maturity and trading securities)[70][74][75] - The adjustment to inventory for markdowns and/or obsolescence was $9.4 million as of August 2, 2025[74] - The Company is currently evaluating the impact of the One Big Beautiful Bill Act (OBBBA) on its consolidated financial statements[73] Off-Balance Sheet Arrangements, Contractual Obligations, and Commercial Commitments Material Contractual Obligations as of August 2, 2025 (Amounts in Thousands) | Contractual Obligations | Total | 2025 (remaining) | 2026-2027 | 2028-2029 | Thereafter | | :------------------------ | :---- | :--------------- | :-------- | :-------- | :--------- | | Purchase obligations | $20,588 | $9,615 | $9,652 | $1,321 | $— | | Deferred compensation | $29,630 | $— | $— | $— | $29,630 | | Operating lease payments | $461,146 | $54,920 | $168,308 | $97,831 | $140,087 | | Total contractual obligations | $511,364 | $64,535 | $177,960 | $99,152 | $169,717 | - The Company had outstanding letters of credit totaling $3.8 million as of August 2, 2025, and has no other off-balance sheet arrangements[77] Seasonality - The Company's business is seasonal, with the holiday season (November 15 to December 30) and back-to-school season (July 15 to September 1) historically contributing approximately 35% of the Company's fiscal year net sales[78] Forward Looking Statements - This section contains forward-looking statements subject to various risks and uncertainties, including changes in product mix, fashion trends, competitive factors, and general economic conditions. The Company does not undertake to update these statements[79] Item 3. Quantitative and Qualitative Disclosures About Market Risk Market risk primarily relates to interest rate fluctuations on cash and investments, with declines negatively impacting income - For each one-quarter percent decline in the interest/dividend rate earned on cash and investments, the Company's net income would decrease approximately $0.5 million, or less than $0.01 per share[80] Item 4. Controls and Procedures Disclosure controls were effective as of August 2, 2025, with no material changes to internal control over financial reporting - The Company's disclosure controls and procedures were effective as of August 2, 2025, providing reasonable assurance that material information is accumulated and communicated to management in a timely manner[81][82] - There were no changes in the Company's internal control over financial reporting that materially affected, or are reasonably likely to materially affect, internal control over financial reporting during the last fiscal quarter[83] Part II. Other Information This section covers legal proceedings, risk factors, equity security sales, defaults, mine safety, and other disclosures Item 1. Legal Proceedings The Company reported no legal proceedings - No legal proceedings were reported[85] Item 1A. Risk Factors No material changes to risk factors previously disclosed in the Company's Annual Report on Form 10-K were reported - No material changes from the risk factors disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended February 1, 2025[85] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No common stock repurchases occurred, 410,655 shares remain under the plan, and no Rule 10b5-1 arrangements were modified - The Company did not purchase any shares of its common stock during the fiscal quarter ended August 2, 2025[86] - There are 410,655 shares remaining to complete the 1,000,000 share repurchase plan authorized on November 20, 2008[86] - No Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers during the quarter[87] Item 3. Defaults Upon Senior Securities The Company reported no defaults upon senior securities - No defaults upon senior securities were reported[88] Item 4. Mine Safety Disclosures The Company reported no mine safety disclosures - No mine safety disclosures were reported[88] Item 5. Other Information No other information was reported under this item - No other information was reported under this item[88] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including the Revolving Line of Credit Note, CEO/CFO certifications, and XBRL financials - Key exhibits include the Amended and Restated Revolving Line of Credit Note (Exhibit 10.1), CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1, 32.2), and XBRL formatted financial statements (Exhibit 101)[89][95] Signatures This section provides the official signatures for the report, confirming its submission - The report was signed on September 11, 2025, by Dennis H. Nelson, President and CEO, and Thomas B. Heacock, Senior Vice President of Finance, Treasurer, and CFO[93]