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Buckle Rises on Q4 Earnings Beat

Zacks Equity Research

Shares of The Buckle, Inc. (BKE) rose nearly 1.2% on the index following better-than-expected fourth-quarter fiscal 2013 earnings. Buckle’s quarterly earnings per share of $1.23 beat the Zacks Consensus Estimate by couple of cents but fell 3.9% year over year.

For the full year, earnings came in at $3.39 per share, above the Zacks Consensus Estimate of $3.36 per share but fell 1.5% year over year.  

Buckle reported net sales of $339.0 million that came below the Zacks Consensus Estimate of $347 million and fell 6% year over year. For the full year, net sales were $1,128.0 million, lagging the Zacks Consensus Estimate of $1,134 million and down 0.4% year over year.

Comparable-store sales declined 2.8% from the prior-year period. However, online sales (not included in comparable store sales) grew 0.4% year over year to $29.3 million.

Total operating expenses came in at $67.2 million, down 11.2% year over year. The decline was due fall in selling as well as general and administrative expenses.

Selling expenses rose 3.5% on a year-over-year basis while General and administrative expenses fell a remarkable 58%.

Due to the decline in top line, the company’s gross profit fell 6.8% to $161.4 million, while gross margin contracted 40 basis points (bps) to 47.6%. The contraction was due to deleveraged occupancy, distribution and buying expenses, partly offset by 40 bps improvement in merchandise margin.

Operating profit came in at $94.3 million, down 3.4% year over year while operating margin expanded 80 bps to 27.8%.

Other Financial Aspects

Buckle, which competes with DSW Inc. (DSW), ended the quarter with cash and cash equivalents of $164.9 million, receivables of $4.3 million and shareholders’ equity of $361.9 million. Further, the company had accounts payable of $ 37.1 million.

In the quarter, the company incurred capital expenditures of $3.6 million, bringing full-year capital expenditures to $28.8 million. For fiscal 2014, the company expects capex to be around $48–$53 million, to be deployed towards outlet construction/remodel and technology up gradation.

At the end of the year, Buckle operated 450 retail stores in 43 states as against 440 stores in 43 states at the end of the previous year. In fiscal 2013, the company opened 13 outlets, remodeled 8 stores and closed 3 stores. For fiscal 2014, Buckle intends to open 17 stores and remodel 7 outlets completely.

Other Stocks to Consider

Currently, Buckle carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the retail sector worth considering include Foot Locker, Inc. (FL) and American Apparel, Inc. (APP). Both of these have a Zacks Rank #2 (Buy).

Read the Full Research Report on FL
Read the Full Research Report on DSW
Read the Full Research Report on BKE
Read the Full Research Report on APP

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