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Buckle(BKE) - 2026 Q1 - Earnings Call Transcript
BKEBuckle(BKE)2025-05-23 15:00

Financial Data and Key Metrics Changes - Net income for Q1 2026 was 35.2millionor35.2 million or 0.70 per share, compared to 34.8millionor34.8 million or 0.69 per share in Q1 2025, reflecting a year-over-year increase [4] - Net sales increased by 3.7% to 272.1millionfrom272.1 million from 262.5 million in the prior year [4] - Gross margin improved to 46.7%, a 70 basis point increase from 46% in the previous year [4] - Selling, general and administrative (SG&A) expenses were 30.7% of net sales, up from 29.8% in the prior year [5] Business Line Data and Key Metrics Changes - Women's merchandise sales increased by approximately 10.5%, representing about 50% of total sales, up from 47% last year [7] - Men's merchandise sales decreased by about 2.5%, accounting for approximately 50% of total sales, down from 53% [8] - Accessory sales increased by approximately 3.5%, while footwear sales decreased by about 7% [9] - Private label sales represented 47.5% of total sales, up from 46% in the prior year [10] Market Data and Key Metrics Changes - Comparable store sales increased by 3% year-over-year [4] - Online sales rose by 4.5% to 46.4million[4]−Averageunitretail(AUR)forwomen′sdenimincreasedfrom46.4 million [4] - Average unit retail (AUR) for women's denim increased from 80.85 to 84.85,whilemen′sdenimpricepointsincreasedfrom84.85, while men's denim price points increased from 88.65 to 89.7[7][8]CompanyStrategyandDevelopmentDirection−Thecompanyplanstoopensevennewstoresandcomplete16additionalfullremodelprojectsfortheremainderoftheyear[6]−Focusonenhancingprivatelabelofferingsandmaintainingstrongrelationshipswithkeyvendorstomanagecostseffectively[19]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinmanagingtariffimpacts,withsomevendorsmaintainingstablecostswhileothershavelowtomid−single−digitincreases[14]−Positivetrendsinwomen′sbusinessandstrongsell−throughsinkeycategorieswerehighlighted,indicatingafavorableoutlook[19]OtherImportantInformation−InventoryasofMay3,2025,was89.7 [7][8] Company Strategy and Development Direction - The company plans to open seven new stores and complete 16 additional full remodel projects for the remainder of the year [6] - Focus on enhancing private label offerings and maintaining strong relationships with key vendors to manage costs effectively [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in managing tariff impacts, with some vendors maintaining stable costs while others have low to mid-single-digit increases [14] - Positive trends in women's business and strong sell-throughs in key categories were highlighted, indicating a favorable outlook [19] Other Important Information - Inventory as of May 3, 2025, was 132.4 million, up 1.3% from the previous year [6] - The company completed five full store remodels and closed two stores during the quarter [6] Q&A Session Summary Question: Impact of China tariffs on gross margin - Management indicated that they are managing tariffs effectively with vendors, resulting in minimal cost increases [14] Question: Increase in operating lease assets - The increase was attributed to new stores and remodels recognized on the balance sheet [15] Question: Drivers of merchandise margin increase - The increase in merchandise margin was driven by growth in private label and strong regular price selling [20] Question: SG&A expense leverage opportunities - SG&A expenses were up due to increased payroll and incentive compensation, but management noted potential for leverage with continued sales growth [26]