The Buckle, Inc. (BKE) 18 Aug 232023 Q2 Earnings call transcript

Good morning. Thank you for standing by, and welcome to Buckle's Second Quarter Earnings Release Webcast.

As a reminder, all participants are currently in a listen-only mode and a Q&A 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; Adam Akerson, Vice President of Finance and Corporate Controller; and Brady Fritz, Senior Vice President, General Counsel and Corporate Secretary.

As they review operating results for the second quarter, which ended July 29, 2023, they would like to reiterate their policy of not giving future sales or earnings guidance, have the following safe harbor statement.

the Litigation under XXXX. Act statement harbor Private Reform Securities of Safe the be forward-looking company subject and on the made to which material based All by uncertainties involve statements controls. the beyond company's risks and change factors may are performance any Accordingly, in may differ or forward-looking statements. financial materially the and results those from company's expressed future such implied and those company's filings the factors but Exchange Such Commission. in include, are described not the limited Securities to, with

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

the Additionally, information Any may or relied according the not of company's the or reproduction quarterly should upon to conference as the unauthorized dissemination reproductions call its the not consent. of company calls be be or written recordings does transcripts audio without inaccurate. authorize expressed

As a is webcast recorded. being reminder, today's

over turn I'd Tom conference now Heacock. to to like your host, the

this Good morning, and thanks us for morning. joining

XXXX basis press XX, share XX-week of XXXX. income on net share the prior $X.XX share net for XX, on compares million per year on or or per $X.XX August July $X.XX for which period the basis, XXXX, quarter $XX.X or income or million of second XXXX compares a ended XX, XX-week million diluted prior XXXX. diluted to on income July was Year-to-date per net basis $X.XX XX, Our a basis, July income ended $XX.X period second year ended XX-week diluted was July $XXX.X release which per a to a which diluted ended XX, for million the the $XX.X for that net XX-week share reported quarter,

ended XXXX, decreased fiscal the million sales period to $XXX decreased the to decreased net to the for year XX-week XX, July X.X% sales period X.X% sales quarter our prior the and sales the period XX-week $XX.X $XXX XXXX. the compared XX-week million X.X%, for decreased prior million second July Year-to-date, in XX, ended $XXX.X to same in X.X% for net sales net for compared XX-week year quarter. second store sales million Net fiscal Comparable of $XXX.X to online prior year, the to million. for and quarter of comparison XX-week

Comparable store were sales online down and prior year, period period our the the for comparison same X.X% the sales to to X.X% year-to-date were in in million. down and $XX.X XX-week

approximately averaging UPTs the and value X%, increased For approximately unit at the The and transaction transaction X%, the value approximately increased increased average slightly. approximately retail decreased X%. Year-to-date, increased X.X%. about quarter, UPTs average X.X% retail average increased the

reduction buying, for expense deleverage XX.X%, Year-to-date the basis margin and the XX.X%, and with quarter deleverage was due margins. of in of XX.X% of point basis margin in The points XXX the The XX current XX result of down point XXX merchandise along from basis occupancy second XX gross points quarter down in a buying, was with decline Gross decline merchandise quarter the a XX was was XX.X% prior from year. occupancy to points margins. basis distribution along year-to-date XXXX. distribution expense basis basis points in decline

for of for for to administrative quarter net net compared year. the XX% last same SG&A were the XX.X% Year-to-date, sales quarter was compared the expenses year. sales Selling, and of XX.X% last XX% period general second to

spend, categories, XX point SG&A several along across XX to increase G&A equity basis expenses, increase combined impact. salaries, increases basis quarter in second related which a a in point basis with was point store XX a basis increase a increase The compensation increase point labor expense other expense XX point and XX due a in basis had in marketing

accruals. a XX by incentive compensation increases also offset These partially point in were basis decrease

quarter for the period, to same XX.X% of our for to XX.X% for margin operating period fiscal XX.X% the for margin was was year-to-date compared second the operating the XXXX. XX.X% compared last And quarter Our year.

Income year-to-date pretax $XXX.X million and Income bringing expense tax as net net tax prior to XX.X%, year-to-date fiscal second expense compared year current to fiscal to as of also XXXX. income both for a current for income $XX.X fiscal fiscal million $XX.X quarter the compared fiscal the XX.X%, quarter $XX.X was percentage of percentage XXXX. both for net was income prior a income XXXX pretax million for for million XXXX, periods bringing and for to net

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

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

period, down headquarters as capital year-to-date capital construction, distribution $X.X store capital corporate new million expenditures were for depreciation and and the upgrades at is spending broken technology the store $XX.X For follows: and and million expense Year-to-date center. million. remodels spending $XX.X $X.X for million was

Bluff, closures. quarter, year-to-date to six four outdoor which remodels full new month and shopping Nampa brings relocations earlier four also centers, stores stores, we count Missouri, remodels, completed new store we the three in full opened two this XX into During were our of and and Idaho new which Poplar

five the year. new states XXX plan XX on For XXX with retail at stores and quarter XX remodeling stores ended additional year, Buckle more this the opening compared to the quarter states of of we in completing the full end remainder in last projects. stores eight second

to over President And now I'll Vice it of Adam Ackerson, Finance. turn

were the quarter price XX.X% the in approximately year. fiscal prior the 'XX. quarter compared sales about the of prior merchandise of X% points Thanks, Average is Tom. to $X.XX second represented against $XX.XX from 'XX, denim and X.X% of in down year in fiscal Women's increased sales second

women's $XX.XX. increased points While price average $XX.XX X.X% to about overall from

across women's sell-throughs denim decreases. quarter in the which spring all by and our in off Going was up with particular largely the driven ended strength strong levels on The against styles, saw label brands, private comfortable record, the pleased we categories. inventory inventory our business being in branded planned strongest our QX assortment while were with

spring Our women's by And sheer in plans business of unable was we to source into business enough footwear tops response Women's business to by product newness shine. we casual while quarter were our and graphics, nice drive and the to top open came of a chase categories, performance toe but saw highlighted selection with growth. the our the with sandals to delayed product temperatures. impacted the was fabrics styles,

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

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

mix denim continued both a way the growth nice of men's category and the lead private branded styles. with to in Growth in

fall but about we We as short nice continue enter competitive are tops, button resulted back-to-school For positioning with selling of a in that remains sleeve ups. excited variety and season. and about in challenging overall good of our in performance our wide both Footwear have looks styles landscape, difficult other a comparisons the accessories we to inventory difficult feel add-on the business. we identify

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

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

the by the with particular selling X% our performance encouraged in we enter up year-over-year. business, seeing the quarter strength as are We season youth back-to-school ending sales

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

with versus in private our We the representing of second continue label growth driving of XX% in 'XX. sales XX% private fiscal quarter brands

that, your with we And welcome questions.

Mauricio, -- [indiscernible] should be you. [Operator is allowed First Serna. person raised be with Thank you Instructions] announced to Mauricio hand

hear Hi. Yes. Can you me now?

can. we Yes,

congrats idea overall more drivers the the you from margin enough then the of something business and business this pressure us taking I you maybe inflation? the to much could you. you Yeah. represent could side what affected points? cost to do secondly, if that being year? give Good How your I little given How the newness. that mentioned or an source And is of how the Thanks questions of you that contraction ask on like wanted relevant for results. Thank behind should like Is guess see just on and how -- to you half merchandise women's elaborate were unable related a on if growth? much newness basis UBS. Mauricio evolving the XX bit to were morning. back my Serna in you

you Thank for question. your

margin categories. footwear, where decrease largely was in probably the We're the strong the still opportunity we of volume better effect substantial a of of and a on very biggest with had had we the think that margin, last and the part margin our part business. year I had most those

ladies speak. the difficult in not the not On first with We the surely side, the weather we're products. so several being early weather, fashion on getting certain to sell-throughs summer getting months of

focused season. not back and did going back-to-school pursue we our that So to on

side. And new we with aggressively girls the didn't so go kind more why of on that's styles

unmute Mauricio Mauricio, There Instructions] should are here now. have able no further questions [Operator in be to the queue. I again.

I how all feel about Thanks much out? in the I on the season comfortable is, the Thank that played it? how into maybe your in elaborate and for thoughts of do you so if you mentioned on terms feel you still second good the very has could could over half composition for of you. think about if like back-to-school. you. so the Thank you about composition, are QX. it -- more Like, the it's you feel just year? guess or what up makes you of heading X% I I if think the year-over-year And like follow-up. And you inventory how inventory season back-to-school what mean, that you maybe

-- increased Well, ballpark, our a a was year, in if I inventory more $XXX down remember to inventory quite little it a the million normal of probably as historical then was our data it probably the right. 'XX, on level. in bit. And in Last XXXX

our grown so, since substantially And that has period. time business

from the new our most are -- guests and selection. We receipts response good on have new our stores and our of

So selection point. we the this with at feel very comfortable

Okay. further questions. Okay. No queue. the no questions are [Operator in further Instructions] There

closing So, I'll Buckle over call remarks. to now any back you. Thank the for turn

participation Thank wonderful everybody, of interest weekend. Buckle, day your and for you, today rest the and the in everybody enjoy your have and a