Buckle(BKE) - 2025 Q1 - Quarterly Report

Part I. Financial Information Item 1. Financial Statements Unaudited condensed consolidated financial statements for Q1 2024 detail balance sheets, income, equity, and cash flows Condensed Consolidated Balance Sheets Total assets increased to $906.1 million as of May 4, 2024, with stockholders' equity growing to $433.8 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | May 4, 2024 | February 3, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $267,427 | $268,213 | | Inventory | $130,661 | $126,290 | | Total current assets | $446,829 | $444,256 | | Total assets | $906,070 | $889,810 | | Accounts payable | $54,811 | $45,958 | | Total current liabilities | $205,280 | $221,456 | | Total liabilities | $472,255 | $476,590 | | Total stockholders' equity | $433,815 | $413,220 | Condensed Consolidated Statements of Income Net sales decreased to $262.5 million for Q1 2024, with net income declining to $34.8 million Condensed Consolidated Statement of Income (in thousands, except per share data) | Metric | Thirteen Weeks Ended May 4, 2024 | Thirteen Weeks Ended April 29, 2023 | | :--- | :--- | :--- | | Net Sales | $262,480 | $282,834 | | Gross Profit | $120,697 | $133,257 | | Income from Operations | $42,396 | $53,730 | | Net Income | $34,843 | $42,936 | | Diluted EPS | $0.69 | $0.86 | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity increased to $433.8 million as of May 4, 2024, driven by net income and offset by dividends - Dividends paid on common stock were $0.35 per share for the first quarter of both fiscal 2024 and 2023, totaling $17.8 million and $17.7 million, respectively[21] Condensed Consolidated Statements of Cash Flows Net cash from operating activities decreased to $29.9 million for Q1 2024, resulting in a slight decrease in cash Cash Flow Summary (in thousands) | Cash Flow Activity | Thirteen Weeks Ended May 4, 2024 | Thirteen Weeks Ended April 29, 2023 | | :--- | :--- | :--- | | Net cash flows from operating activities | $29,884 | $33,295 | | Net cash flows from investing activities | ($12,896) | ($13,279) | | Net cash flows from financing activities | ($17,774) | ($17,660) | | Net (decrease) increase in cash | ($786) | $2,356 | Notes to Condensed Consolidated Financial Statements Notes provide details on accounting policies, including revenue recognition, lease obligations, and stock-based compensation, with online sales at 16.9% - The company operates as a single reportable segment with 440 stores in 42 states as of May 4, 2024. During the quarter, the company opened no new stores, remodeled 5, and closed 4[26] - Online revenues accounted for 16.9% of net sales for the thirteen weeks ended May 4, 2024, down from 18.1% in the same period of the prior year[46] Net Sales by Merchandise Group (Q1 2024 vs Q1 2023) | Merchandise Group | % of Net Sales (Q1 2024) | % of Net Sales (Q1 2023) | | :--- | :--- | :--- | | Denims | 43.2% | 41.7% | | Tops | 27.3% | 27.1% | | Accessories | 10.8% | 10.8% | | Footwear | 5.8% | 8.1% | - As of May 4, 2024, the company had $21.3 million of unrecognized compensation expense related to non-vested shares, expected to be recognized over a weighted average period of approximately 2.2 years[90] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2024 net sales decrease of 7.2%, gross profit margin decline, and $241.5 million in working capital Results of Operations Net sales for Q1 2024 decreased by 7.2% to $262.5 million, with gross profit margin falling to 46.0% Key Operational Metrics (% of Net Sales) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net sales | 100.0% | 100.0% | | Gross profit | 46.0% | 47.1% | | Income from operations | 16.2% | 19.0% | | Net income | 13.3% | 15.2% | - The decrease in total sales was caused by an 8.0% drop in transactions and a 5.5% decrease in units per transaction, partially offset by a 6.0% increase in average unit retail price[96] - Online sales decreased 13.4% to $44.4 million for the quarter[96] Liquidity and Capital Resources The company maintains strong liquidity with $241.5 million working capital, planning $32.0 to $38.0 million in capital expenditures - As of May 4, 2024, the Company had working capital of $241.5 million, including $267.4 million of cash and cash equivalents[73] - Capital expenditures for fiscal 2024 are estimated to be between $32.0 to $38.0 million, covering planned store projects and technology investments[126] - The company has an available unsecured line of credit of $25.0 million, with no borrowings during the first quarter of fiscal 2024 or 2023[100] Critical Accounting Policies and Estimates Key accounting policies and estimates, including revenue recognition and inventory valuation, remain materially unchanged from the 2023 Form 10-K - The liability for unredeemed gift cards was $14.4 million as of May 4, 2024[102] - The liability for estimated future rewards under the Buckle Rewards program was $10.4 million as of May 4, 2024[103] - The adjustment to inventory for markdowns and/or obsolescence was $10.4 million as of May 4, 2024, up from $9.1 million as of February 3, 2024[104] Seasonality The company's business is seasonal, with holiday and back-to-school periods driving significant sales - The holiday and back-to-school seasons historically accounted for approximately 35% of the Company's annual net sales in fiscal years 2023, 2022, and 2021[1] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company faces interest rate risk, with a 0.25% decline potentially decreasing net income by $0.5 million - A one-quarter percent (0.25%) decline in the interest/dividend rate earned on cash and investments would decrease the Company's net income by approximately $0.5 million[111] Item 4. Controls and Procedures Management concluded disclosure controls were effective, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of the end of the reporting period[112] - No changes occurred in the Company's internal control over financial reporting during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, these controls[113] Part II. Other Information Item 1A. Risk Factors No material changes were reported from the risk factors disclosed in the Company's fiscal 2024 Annual Report on Form 10-K - No material changes from the risk factors disclosed in the Annual Report on Form 10-K for the fiscal year ended February 3, 2024, were reported[142] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company did not repurchase common stock during Q1 2024, with 410,655 shares remaining under authorization - The Company has 410,655 shares remaining to be repurchased under its 1,000,000 share repurchase plan authorized in 2008[143] Share Repurchase Activity (Quarter Ended May 4, 2024) | Period | Total Shares Purchased | Average Price Paid Per Share | Shares Remaining Under Plan | | :--- | :--- | :--- | :--- | | Feb 4 - Mar 2, 2024 | - | - | 410,655 | | Mar 3 - Apr 6, 2024 | - | - | 410,655 | | Apr 7 - May 4, 2024 | - | - | 410,655 | Item 5. Other Information CEO Dennis H. Nelson adopted a Rule 10b5-1 trading plan to sell up to 450,000 shares starting July 2024 - President and CEO Dennis H. Nelson adopted a 10b5-1 Trading Plan on April 24, 2024, for the sale of up to 450,000 shares of Company stock, with sales to begin in July 2024[115] Item 6. Exhibits Exhibits filed with Form 10-Q include CEO and CFO certifications and financial statements in XBRL format - Exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906, and financial data in XBRL format[12][145] Signatures Signatures The report was signed on June 13, 2024, by the President and CEO, and the CFO - The Form 10-Q was signed on June 13, 2024, by the company's principal executive officer and principal accounting officer[146][147][151]