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Buckle (BKE) Q4 Earnings Beat Estimates, Sales Decline Y/Y

Zacks Equity Research

The Buckle, Inc. BKE reported fourth-quarter fiscal 2018 results, wherein adjusted earnings surpassed the Zacks Consensus Estimate, while sales came in line. However, both the metrics declined year over year.

Buckle reported adjusted earnings per share of 84 cents that exceeded the consensus mark of 80 cents but dipped 3.4% from the prior-year quarter. Net sales of $264.4 million came in line with the Zacks Consensus Estimate but declined 6% from the year-ago period, owing to soft same-store sales.

Consolidated same-store sales inched down 0.6% in the quarter. Looking at the monthly performance, we note that comps declined 0.6%, 0.2% and 2.2% in November, December and January, respectively. However, online sales increased 1.3% from the year-ago quarter to $33.9 million.

Shares of this Zacks Rank #4 (Sell) company have plunged 24% in the past six months compared with the industry’s decline of 22%.

During the quarter, Buckle’s merchandise sales in the women’s category declined 8.5% from the year-ago period. The women’s merchandise sales accounted for 43.5% of net sales in the reported quarter, down from 45% reported in the year-ago quarter.

Men’s merchandise sales, which accounted for 56.5% of net sales, decreased 3.5% in the quarter. Meanwhile, accessory sales fell 4.5%, while footwear sales rose 19%. Accessory and footwear comprise 9% and 7% of net sales compared with 9.5% and 6%, respectively, in the year-ago quarter.

The company posted gross profit of $121.3 million that decreased 9% year over year, while gross margin contracted 150 basis points (bps) to 45.9%. Gross margin declined due to 35 bps of deleverage in occupancy costs, and buying and distribution costs along with 115 bps contraction in merchandise margin.

Operating income for the quarter came in at $51.2 million, down 15.6% from the year-ago quarter. Meanwhile, operating margin came in at 19.4% compared with 21.6% reported in the prior-year quarter.

Store Update

During the quarter under review, the company shuttered three stores and remodeled three. Currently, it has 450 stores in 42 states. Management intends to open one store and remodel three in fiscal 2019.

Other Financial Aspects

Buckle ended the quarter with cash and cash equivalents of $168.5 million and shareholders’ equity of $393.9 million. Management incurred capital expenditures of $2.1 million during the quarter. Moving forward, Buckle anticipates capital expenditure of $8-$12 million for fiscal 2019.

Buckle, Inc. (The) Price, Consensus and EPS Surprise

Buckle, Inc. (The) Price, Consensus and EPS Surprise | Buckle, Inc. (The) Quote

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