Buckle(US:BKE)2025-08-22 15:00Financial Data and Key Metrics Changes - Net income for Q2 2025 was $45 million or $0.89 per share, compared to $39.3 million or $0.78 per share in Q2 2024, representing a year-over-year increase of 14.3% in net income [4] - Year-to-date net income for the 26-week period ended August 2, 2025, was $80.2 million or $1.59 per share, up from $74.1 million or $1.48 per share in the prior year [4] - Net sales for Q2 2025 increased by 8.3% to $305.7 million compared to $282.4 million in Q2 2024 [4] - Year-to-date net sales increased by 6.1% to $577.9 million compared to $544.9 million in the prior year [4] Business Line Data and Key Metrics Changes - Women's merchandise sales increased by approximately 18.5%, representing about 47.5% of total sales, up from 43.5% last year [11] - Men's merchandise sales grew by about 1.5%, accounting for approximately 52.5% of total sales, down from 56.5% in the prior year [12] - Kids' business saw a significant increase of approximately 23% year-over-year, growing to about 4.5% of total business for the quarter [14] - Private label sales represented 43.5% of total sales, up from 43% in the prior year [14] Market Data and Key Metrics Changes - Online sales increased by 17.7% to $43.6 million in Q2 2025 [4] - Comparable store sales for the quarter increased by 7.3% compared to the same period last year [4] - Average unit retail (AUR) for women's products increased by about 5% from $43.15 to $45.35 [12] Company Strategy and Development Direction - The company continues to focus on customer-centric buying strategies, which have resulted in strong guest responses and double-digit growth in most categories [12] - The strategy includes evolving the denim category, which has been a significant driver of sales growth [11] - The company plans to open four additional new stores and complete 12 more full remodeling projects for the remainder of the year [9] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with the growth in merchandise margins despite a deceleration compared to the previous quarter, attributing it to strong full-price selling [20] - The company is experiencing low to mid-single-digit cost increases due to tariffs, with some vendors showing no increase at all [22] - Management noted that occupancy expenses increased due to new store openings and remodels, impacting overall margins [24] Other Important Information - Gross margin for Q2 2025 was 47.4%, a 50 basis point increase from 46.9% in Q2 2024 [5] - Selling, general, and administrative expenses for the quarter were 29% of sales, down from 29.8% in the prior year [6] - The company ended the quarter with $142.5 million in inventory, up 8.4% from the same time last year [8] Q&A Session Summary Question: Can you elaborate on the merchandise margin expansion? - Management indicated that the growth in merchandise margins was due to strong full-price selling, although the rate of growth decelerated compared to Q1 [20] Question: What are the drivers behind the occupancy expense increase? - The increase in occupancy expense was attributed to new store openings and remodels, which led to higher base rent and percentage rent due to strong sales performance [24] Question: Is the 65 basis points from nonrecurring digital investments just a one-time effect? - Management confirmed that the impact from nonrecurring digital investments will also flow into Q3, as efforts to improve the online experience began in Q1 and continued into Q2 [29]