Buckle(BKE) - 2026 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Net income for Q1 2026 was $35.2 million or $0.70 per share, compared to $34.8 million or $0.69 per share in Q1 2025, reflecting a year-over-year increase [4] - Net sales increased by 3.7% to $272.1 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 $46.4 million [4] - Average unit retail (AUR) for women's denim increased from $80.85 to $84.85, while men's denim price points increased from $88.65 to $89.7 [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]