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Buckle (BKE) Surges 5.8%: Is This an Indication of Further Gains?

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Buckle BKE shares soared 5.8% in the last trading session to close at $42.51. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 7.3% loss over the past four weeks.

Shares of Buckle have been gaining owing to the optimism that the company is fast recovering from the impacts of the pandemic. Markedly, the company’s online business has continued to grow amid the crisis. It has been undertaking measures like boosting assortment availability as well as improving search and navigation to boost online sales. These efforts have been supporting the company’s performance.

Additionally, the company has been expanding its assortment offerings to meet consumers’ altering preferences. We note that the company’s women’s and men’s merchandise categories have been doing well. Also, it has been benefiting from robust accessory and footwear sales.

Notably, Buckle delivered a stellar performance in first-quarter fiscal 2021 wherein both the top and the bottom lines significantly improved year over year. The company delivered earnings of $1.16 a share, which surpassed the Zacks Consensus Estimate of $0.53. Also, the bottom line compared favorably against the year-ago quarter’s loss of $0.24 per share.

Buckle generated net sales of $299.1 million, which came in line with the Zacks Consensus Estimate but more than doubled from $115.4 million reported in the year-ago period. Additionally, online sales surged 67.3% to $53.7 million in the reported quarter.

Price and Consensus

Price Consensus Chart for BKE
Price Consensus Chart for BKE

This teen clothing retailer is expected to post quarterly earnings of $0.56 per share in its upcoming report, which represents a year-over-year change of -21.1%. Revenues are expected to be $205.7 million, down 4.8% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Buckle, the consensus EPS estimate for the quarter has been revised 6.5% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on BKE going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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