The Buckle, Inc. (BKE) 26 May 232023 Q1 Earnings call transcript

Well, good morning, and thank you for standing by. And welcome to Buckle’s First Quarter Earnings Release Webcast.

As a reminder, all participants are currently in a listen-only mode with a question-and-answer session will be conducted following the company’s prepared remarks with instructions given at that time.

Members of Buckle’s management on the call today are Dennis Nelson, President and CEO; Tom Heacock, Senior Vice President of Finance, Treasurer and CFO; and Adam Akerson, Vice President of Finance and Corporate Controller.

As they review operating results for the first quarter, which ended April 29, 2023, they would like to reiterate their policy of not giving future sales or earnings guidance and have the following Safe Harbor statements.

the follows. Litigation under XXXX Act statement as is Harbor Private Reform Securities of Safe statements by based forward-looking and may All made beyond are and material be subject uncertainties risks to company’s change the on which the factors control. company involve

future but company’s results financial Commission. to, the described are expressed not and from forward-looking statements. company’s may any in the Exchange implied limited in performance such materially Securities filings Such those the Accordingly, differ or factors and with include, those

not make The update results revise that does will publicly company undertake experience or therein projected any to if not even or any be expressed implied forward-looking it statements or future realized. changes clear

company’s does Additionally, should its dissemination reminder, the without the today’s webcast transcripts unauthorized quarterly expressed And not written or being be consent. the relied a or be reproduction information call conference authorize the the may recordings of inaccurate. recorded. Any calls or company as of upon reproductions not of audio is recordings as

now, to over will host, you. to Tom Heacock. Tom, And things your turn over I

us and morning. morning joining this for thanks Good

April Our quarter May a XXXX compares April prior $X.XX per net press diluted for XXXX. XX, XX-week $XX.X a net share basis XX, was ended ended per or income the million year $X.XX XX, $XX.X diluted the XX-week quarter basis, reported million or income on that for XXXX which of first to release that share on first

period down for our prior million decreased the compared and $XX.X first the online in XX-week sales the net Net prior first to XX-week $XXX.X sales million. same year sales to decreased the X.X% Comparable $XXX.X for the for quarter store were XX-week comparison quarter. to to X.X% in quarter sales of X.X% million, year

average decreased X.X%. increased unit the UPTs X.X% the the average approximately value decreased or approximately about transaction and retail quarter, X.X%, For increased

expense decline current of the down for for is Gross in XXX quarter quarter The decline from deleverage first points XX-basis-point points buying XXX with of margins. margin XXXX. basis the and a the quarter of XX.X% along occupancy XX.X%, merchandise result was basis distribution

general Selling, sales, of expenses for compared of the XX.X% were quarter the and net first XXXX. to administrative quarter XX.X% for

increase expenses, increase with XXX-basis-point due a increases to XXX-basis-point first in across along related were to quarter a combined SG&A incentive and which labor-related reduction which expense had expense had store several in primarily compensation expense, was other offset The XXX-basis-point impact accruals for by a impact. categories,

percentage Income for net was for XXXX. quarter to as expense operating a and the net XX.X%, for was income prior compared first for the both $XX.X tax to quarter compared XXXX, XX.X%, of XX.X% fiscal of $XX.X million first the for million fiscal fiscal Our bringing pretax XXXX. fiscal margin quarter to quarter year income current

accumulated which depreciation. sheet with a total the from million of assets, as release net April $XXX.X balance following. also in Our and April million as XX, fixed up ended included of XX.X% million, We $XXX.X Inventory in press XX, included $XXX.X XXXX, and investments. of $XXX XXXX which the million cash quarter of was

was for $X.X were million. Our expense capital expenditures and the depreciation quarter million $X.X

corporate capital quarter capital spending new first and and $X.X upgrades; remodels down million $X.X as at construction, million store The for store is spending broken technology the center. and follows; for distribution headquarters

closed relocations four centers into and remodels, new three quarter, stores. full outdoor the completed shopping three which two opened of new stores, During we were

at with of ended first the the the the opening remodel we quarter projects. of new the XX plan XXX more Buckle remainder in end XXXX. seven and year, stores of XX states, additional in stores with quarter retail XX completing compared fiscal For stores XXX full on states

And Finance. President of Vice Adam Akerson, now, it turn I’ll over to

quarter XX.X% against to the $XX.XX of the in XX.X% Women’s points year. to first XXXX, of to $XX.XX. quarter of and overall represented price approximately XX.X% from price were the in the in the $XX.XX XXXX $X.XX fiscal year quarter increased for from sales, Tom. while fiscal merchandise about increased compared X.X% down sales Average women’s and Thanks, the point prior prior first about denim average

On the price were quarter the Average prior fiscal the of of representing XXXX side, XX.X% increased men’s XXXX. the to first against $XX sales, points $XX.XX first XX.X% in prior about quarter down the X% merchandise year, in for the sales approximately to total of in from year. quarter fiscal compared denim

For points the X.X% price from to overall increased approximately quarter, average $XX.XX men’s $XX.X.

prior were net On sales, were account the and first in up X.X% fiscal about X% a approximately the which sales year, XX% sales for These approximately against basis, XX%. quarter for footwear XX% to each categories compares X%, the for the down and quarter combined first of XXXX. quarter while respectively, for accessory two

average the and XX% accessory For average points up quarter, price up X.X%. price footwear approximately were were points

accounted tops compares For XX%, fiscal for in denim total which first of for XX.X% XX.X% and XX% for the the quarter quarter, of accounted to XXXX. sales each approximately and approximately

teams private Our product. assortment a provide buying label continue and introduce brands diverse of new to

quarter, For of XXXX. the sales represented of private quarter label XX% first the in versus XX.X%

several which spring men’s were of the declined a accounted sales both for we for saw difficult season, of selling pleased quarter, we with across our and selling women’s During Outside categories. of total approximately good business. performance the the footwear, half

moving believe the Ts men’s summer selling on selection we have positioned performed well short season. shorts well and side and polos, into our of the us sleeve Denim

and anticipate side, the back-to-school well fashion newness we denim hearing continued carrying season, through performed women’s On our well with the and to tops. short that in summer

Thank to open will we you. that, your questions. with And

you Jon you hear Associates. Jon, Kansas with from Braatz And are Thank first will City believe, Instructions] I Capital we much. and so [Operator

go the Jon, option left screen. please lower And to you see of ahead. should there the Jon, in unmute So, your corner

Is that better?

Perfect. Thank you.

so the you difficult bit couple Obviously, a that? adjusting you the to bit bit of environment, in questions. quarter little you I’m of sorry. current At little a are it’s A terms costs of a level, doing sales. that, seeing Oh! little are star are of labor first reflect

Jon. Good morning, Yes.

We with for with wages can. what’s to are to sales and we leverage our our schedules and adjusting on teams teams. we handle mean, stuff the with best. have such, are our But increase best the down that going doing the some I the with working continually had inflation

up cost several that were over last -- where unusually cost of the low, as far they the ago percent. Although years of two is kind below as -- the great it’s success still the years

with So that. continue it is to our radar work on and

Okay.

weakness, that’s On there or a that’s do footwear footwear we the styles side, a few new shoes? of anything there weakness coming comps, footwear is have the enough and obviously, to we that have all the specific but it’s was lot you some difficult behind sales off specific some in -- see Anything footwear weakness? enough there’s behind to

we Yes. the also were pent-up so increased inventory ago, branded anniversarying had a footwear, year brand first and doing. our cut demand kind that casual tough comps. from we of in what the on we that part a spring of But In were for we unusually the high there’s market sales into had is and the so category brand

at the as we some the still degree. year, not but through have we’ll headwinds same go And

year, ago were $XX million think, quarter drops I $X on I not the to it about in rest counting year think of sales that, a December, first million. and the the the

that it’s the So headwind goes we’ll part have cycle a the kind fashion but on. of little of there, less

but talking Hey Not Yeah. name about we to Dude? names, are

be would That one, key the yes.

stores? what right. seen little All think, lastly, Okay. -- new retailers commentary, store so we’ve the bit left, find that’s because is the And than the where new behind you this thinking but thank the seven -- the in to been that openings of I Dennis, different your additional remainder some time, a the just in are limited. you retail for why just other you. and stores there Is at attractive past What very it’s the maybe year new growth? somewhat speak -- that

potential over the what that of these feel and years is some couple new couple work additional learned they well. good development our seen estate that they’ve our changes and people have and and projects to are just product of to welcome that and the only have opportunities very we in as some work now our that we stores with we’re from that opened centers. us where That’s markets. have previous some we’ve the well given success to excellent store that about given of success moving been the their we’ve where we an in And their changes we’ve seen you there’s markets and real couple of and years, power we centers outlet and good outlet up or had see to our -- opening would of be considering people in part opportunities us good do created also, some situations to and a opportunities outlet with feel So regular new malls more we other from last with traffic and met be will us store and being last

All thank Okay. right. you.

You are welcome.

Mauricio will UBS. with we next And hear from Serna

you morning. hear okay? me Can Yes. Good Hi.

you. Thank Yes.

continue. Please

merchandise Great. -- I And year-over-year? anything on wanted if actually increased Great. call contraction, basis Thanks for regions, penetration that is to private saw performance differences your out? I would seeing the any XXX you margin, merchant ask taking that questions. then our guess you that label driving your what in by points

Yes. Okay.

we’ve little -- very drop our seen and there. margin On the were footwear back before margins good a

that. think, also I some we main things very selling a has private couple good, good margin where had of low denim label, part, For been ago inventories those on as is the branded think we’re but of as not most a are that the point. the year I And kind

little Some little better a effect of a margin well. first there’s probably tops, as the fashion that’s quarter in had the has where where softer

regional the Okay. performance? And Thanks. about

I’m sorry, what?

the callouts any Sorry, on regional performance?

Sorry. Oh! Yes.

Yeah.

there’s seasonal an traffic. that’s and especially challenging the there’s majority of say, other most enough on The stores. naturally been been good in southern in the effect that’s I’d had parts, been But stuff, others Texas the -- weather

much. Got it. you very Thank

you. Thank

move Instructions] [Operator We’ll to Carlton on Getz.

morning. Good you? are How

Good. morning. Good

a growth considering just to bit. Carlton Getz Winter question store with on a little I Capital. earlier, wanted Harbor build

new over counts Do of stores longer towards last to the a been declined be that location the have One measured growth since positive although term results you’re the of this positive this on trajectory that very approach up has trend growth, of year. opening year? dependent is store expect until store about to features it or Buckle years the XXXX a you

of if Well, year and stores outlet whether will amount stores, don’t move each be where lot to for out to opportunities the off in open creates but we’re that seeing meetings, with a malls us, mentioned, I other a as itself. the And of new is centers certainly similar are opportunity know of good traffic. of I reposition power opportunities our the what we’re we stores, opening

again here we’re how XXXX starting -- So the some not possibilities to be. to ready look seeing we’re there there, at will we’re ones opportunity new but kind of players and and announce many

these Sure. stores And new or that geographic to the where then has a afield? respect to opening, with stores significant adjacent further locations of primarily in company number these are already are the

in well. Most very that of do them regions are we

a or very the some lack count of with and approach expanding until last in the how decline thinking in Buckle’s the and just company sales took finally, decline capital for over count a that count does years the to when on even respect the -- then, stores return maintained And growth the the on years, left table Okay. recent on or upward that equity high that the little many trend? several Has your store value a of more. investment view hit.

I moved have updated to some an expand square in store cases, we of mentioned, stores. our of stores the we’re footage, people and really been we’ve of out give location -- lot enjoyed those shopping malls, able and as So, a

I which see care feel we looking take with served to we’re let at has covering well So we’re there’s the itself, going us good and years. and about results maximize the guess each looking we’re looking and our going at on, still opportunities the upside good be real some changing of to situation at we over But opportunities. and everything downside

don’t last one you where stores areas locations? the question have sales e-commerce in Sure. brand geographic e-commerce the company’s sales. areas in And Is experience drive extension concentrated then have you on may I you if e-commerce where seen or have

where continue still we But sales times, the is online in are see to see territories, we go do then best where the were newness we store But guests of to a strongest in states to we but go probably reasonable outside A the and do amount buy. of very strength our well. have our and stores lot to good, the are too. total

you. Thank Okay.

you. Thank

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be footprint, forward macro store not you indicators urban cities, which smaller looking favorite economic like Do your centers. Given near is -- but look a close right in the or give to any tends for you at that to climate? metrics feel to in retail like you have

any Usually, centers. of a we’re of We at look ones. centers information. at indicators. others specific We don’t of look have traffic the have in -- lot We most different sales the

retail look depending at, market on certain that or we have such. We stores the

to of are are pretty But in a we we our open areas strong, where lot situations.

Midwest the the larger have feel outstanding comfortable with very and cities stores We those. mall and some throughout

or Francisco Southern cities Northeast open markets. review to But cities the the area. or majority are LA San we that, the in are of We or the not of outside Florida

And there freight my is and getting been of kind year, of has lot that you Have or smooth any pretty was so other far? Last then inventory. guys companies micro that Thanks. experienced of forwarding for disruption a question based. Okay. in you

point. part the it’s at smooth for most say pretty I’d been this

Thanks.

Thank you.

a Instructions] for [Operator Serna. Mauricio follow-up now will we take And

about Thanks. Thanks wanted will the feel you if from see inventory. the on I Great. views quarter. the pockets ask inventory sequentially and with of any just inventory fourth follow-up. have I be for it’s expectations I has you sales growth more growth? see high you think the where to the to guess, aligned still that wanted growth moderated like any, when I you or do

the than Thank you. and it point, comfortable the and here quarter second with of first did Yes. definitely line the we in inventory are this very for going. -- how more The will we in at quarter quarter, of our quarter probably, spring with the product again more start bring first for sales be third levels

Perfect. Thank you.

Yeah.

further questions. And we have no

for turn any back things Buckle to will I So closing remarks.

further are wonderful a thank has we’ll and no there everyone holiday If call weekend. and today’s for participation all your conclude questions, you hope

thank So you very much.

you. for participation. Thank you next all quarter. again Enjoy see release. your summer. earnings conclude you does today’s your thank We’ll that And We