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Factors Setting the Tone for Buckle's (BKE) Q2 Earnings

Zacks Equity Research

Buckle, Inc. BKE is slated to release second-quarter fiscal 2019 results on Aug 23, before market open. The bottom line of this New York-based company surpassed the Zacks Consensus Estimate in two of the trailing four quarters. Let’s see how things are shaping up prior to this announcement.

The Zacks Consensus Estimate for earnings in the quarter under review stands at 32 cents, in line with the year-ago period’s reported figure. Notably, the consensus mark has gone down by 2 cents over the past 30 days.

Caseys General Stores, Inc. Price and EPS Surprise

Caseys General Stores, Inc. Price and EPS Surprise

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Factors to Consider

Buckle’s women’s merchandise sales have been a concern for some time now. Sales in this category were hurt by dismal performance in categories such as denim, shorts, footwear, fashion wear and accessory in the fiscal first quarter. We note that women’s business accounted for approximately 49% of net sales. Further, the company has been witnessing high SG&A costs for the last few quarters. According to management, these cost hurdles are likely to persist throughout the year. Cumulatively, these factors are likely to weigh on the company’s profitability in the fiscal second quarter.

However, Buckle’s comparable store sales growth witnessed a recovery in the second quarter, after a drab performance in the last reported quarter. Notably, net sales and comps for first-quarter fiscal 2019 declined 1.7% and 1.3%, respectively. Meanwhile, the company recently came out with its second-quarter sales number, wherein comps grew 1.8%. Net sales for the quarter also increased 1.4% to $203.8 million from the year-ago quarter’s $201.1 million. Additionally, the company’s online sales have been relatively strong. We assume these factors to have played a major role in driving the company’s top-line performance.

What Does the Zacks Model Say?

Our proven model does not conclusively show that Buckle is likely to beat estimates this quarter. A stock needs to have both — a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Buckle has a Zacks Rank #1, its ESP of 0.00% makes surprise prediction difficult.

Stocks With Favorable Combination

Here are some better-ranked companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Caseys General Stores CASY has an Earnings ESP of +8.43% and Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Burlington Stores BURL has an Earnings ESP of +1.13% and a Zacks Rank #2.

The Gap GPS has an Earnings ESP of +0.19% and a Zacks Rank #3.

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