Buckle Keeps Up Comps Momentum

Zacks

The Buckle Inc. (BKE) reported net sales of $105.5 million in March 2012, up 8.9% from $96.9 million in the comparable month last year. The company’s comparable store sales grew 6.4% in the reported month. Both Men’s and Women’s sides of business performed well.

Total sales for the men’s side of business increased 8.5% year over year and represented 39.5% of total sales for the month, flat year over year. Sales from the women’s side of business accounted for 60.5% of total sales and rose 9.0% year over year.

Pricing in the women's side of business was steadier compared to men’s. Overall pricing was up 8.0% in the women’s side of business while the men’s side saw a 2.5% increment. Average accessory price points were down about 2.5%, but average footwear price points were up approximately 11.5% in the month.

In March, the categories that performed well were denim, knit shirts and woven tops, casual bottoms, active apparel and footwear. Accessory sales for men's and women's categories together fell approximately 3.5% year over year while footwear business soared around 18.0%.

The Zacks Consensus earnings estimates for the first quarter and fiscal 2012 are pegged at 75 cents and $3.42, respectively. An optimistic outlook is prevailing around the stock. Of the six analysts covering the stock, three analysts raised their estimates for the upcoming quarter and six out of seven analysts upped the same for the fiscal year to reflect the company’s fundamental strength.

While many retailers believe that March sales were somewhat positively influenced by the shift of Easter to early April this year as opposed to late April in 2011, Buckle management does not see any substantial impact on its comps between March and April due to the Easter transition. Management also noted that apart from Easter, much of the company’s sales in this season are generated from the various spring breaks in high schools and colleges. 

The company ended March with 431 retail stores in 43 states compared with 421 stores in 41 states as of April 5, 2011. Buckle, which mainly caters to older teens and young adults, currently retains a Zacks #2 Rank that translates into a short-term Buy rating. We are maintaining our long-term Neutral recommendation on the stock. One of its competitors, Cato Corp. (CATO) reported a 7.0% upside in total sales as well as a 5.0% increment in same-store sales in March.

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