The Buckle, Inc. Reports Second Quarter Net Income

Rhea-AI Summary

The Buckle, Inc. (NYSE: BKE) reported its second quarter fiscal 2024 results, showing a decrease in net income and sales. Net income for the quarter ended August 3, 2024, was $39.3 million, or $0.79 per share, down from $45.6 million, or $0.92 per share, in the same period last year. Net sales decreased 3.4% to $282.4 million, with comparable store sales declining 6.6%. Online sales saw a significant drop of 15.2% to $37.0 million. For the 26-week period, net sales decreased 5.3% to $544.9 million, with comparable store sales down 7.7% and online sales decreasing 14.2%. The company will hold a live audio webcast to discuss the results.

Positive

• The company maintains profitability despite challenging market conditions
• The Buckle continues to generate substantial online sales of $37.0 million for the quarter

Negative

• Net income decreased from $45.6 million to $39.3 million year-over-year
• Net sales declined 3.4% to $282.4 million for the quarter
• Comparable store sales decreased 6.6% for the quarter
• Online sales dropped 15.2% to $37.0 million for the quarter
• 26-week net sales decreased 5.3% to $544.9 million
• 26-week comparable store sales declined 7.7%
• 26-week online sales decreased 14.2% to $81.4 million

Insights

Financial Analyst

The Buckle's Q2 FY2024 results paint a challenging picture for the retailer. Net income dropped to $39.3 million ($0.79 per share) from $45.6 million ($0.92 per share) year-over-year, a 13.8% decrease. This decline is coupled with a 3.4% decrease in net sales to $282.4 million.

Particularly concerning is the 6.6% drop in comparable store sales and a sharp 15.2% decline in online sales. These figures suggest The Buckle is struggling to maintain its market position in both brick-and-mortar and e-commerce channels. The year-to-date performance shows similar trends, indicating this isn't a one-quarter anomaly but a potential longer-term challenge for the company.

Investors should closely monitor The Buckle's strategies to reverse these declines, especially in the important online segment where consumer preferences are rapidly evolving.

Retail Industry Expert

The Buckle's Q2 results reflect broader challenges in the retail apparel sector. The 6.6% decrease in comparable store sales is particularly worrying, as it outpaces the overall revenue decline, suggesting potential issues with product assortment or in-store experience.

The stark 15.2% drop in online sales is a red flag in today's digital-first retail landscape. It may indicate issues with The Buckle's e-commerce platform, digital marketing strategies, or online product offerings. Competitors who are successfully navigating the online space could be capturing market share.

To turn the tide, The Buckle needs to reassess its omnichannel strategy, focusing on improving the online shopping experience while also enhancing in-store offerings to drive foot traffic and sales.

Market Research Analyst

The Buckle's Q2 performance raises concerns about its market positioning and consumer appeal. The consistent decline across both physical and online channels suggests a potential misalignment with current fashion trends or consumer preferences.

The steeper decline in online sales (15.2%) compared to overall sales (3.4%) is particularly alarming. This could indicate that The Buckle is losing ground to more digitally savvy competitors or failing to effectively reach its target demographic through online channels.

To reverse this trend, The Buckle should conduct comprehensive market research to better understand shifting consumer behaviors and preferences in the apparel sector. This could inform product development, marketing strategies and channel optimization to better resonate with their target audience and recapture market share.

KEARNEY, Neb.--(BUSINESS WIRE)-- The Buckle, Inc. (NYSE: BKE) announced today that net income for the fiscal quarter ended August 3, 2024 was $39.3 million, or $0.79 per share ($0.78 per share on a diluted basis).

Net sales for the 13-week fiscal quarter ended August 3, 2024 decreased 3.4 percent to $282.4 million from net sales of $292.4 million for the prior year 13-week fiscal quarter ended July 29, 2023. Comparable store net sales for the 13-week fiscal quarter ended August 3, 2024 decreased 6.6 percent from comparable store net sales for the prior year 13-week period ended August 5, 2023. Online sales decreased 15.2 percent to $37.0 million for the 13-week fiscal quarter ended August 3, 2024, compared to net sales of $43.6 million for the 13-week fiscal quarter ended July 29, 2023.

Net sales for the 26-week fiscal period ended August 3, 2024 decreased 5.3 percent to $544.9 million from net sales of $575.3 million for the prior year 26-week fiscal period ended July 29, 2023. Comparable store net sales for the 26-week period ended August 3, 2024 decreased 7.7 percent from comparable store net sales for the prior year 26-week period ended August 5, 2023. Online sales decreased 14.2 percent to $81.4 million for the 26-week period ended August 3, 2024, compared to net sales of $94.9 million for the 26-week period ended July 29, 2023.

Due to the 53rd week in fiscal 2023, comparable store net sales for the quarter and year-to-date periods are compared to the 13-week and 26-week periods ended August 5, 2023.

Net income for the second quarter of fiscal 2024 was $39.3 million, or $0.79 per share ($0.78 per share on a diluted basis), compared with net income of $45.6 million, or $0.92 per share ($0.92 per share on a diluted basis) for the second quarter of fiscal 2023.

Net income for the 26-week fiscal period ended August 3, 2024 was $74.1 million, or $1.49 per share ($1.48 per share on a diluted basis), compared with net income of $88.6 million, or $1.79 per share ($1.78 per share on a diluted basis) for the 26-week period ended July 29, 2023.

Management will hold a live audio webcast at 10:00 a.m. EDT today to discuss results for the quarter. To register for the live event, please visit https://buckle.zoom.us/webinar/register/WN_wgdrgn2oR764cUMOxJG06g. A replay of the event can be accessed through Buckle’s investor relations website within twenty-four hours after the conclusion of the live event (https://corporate.buckle.com/investors/earnings-webcasts).

About Buckle

Buckle is a specialty retailer focused on delivering exceptional service and style through unforgettable experiences. Offering a curated mix of high-quality, on-trend apparel, accessories, and footwear, Buckle is for those living the styled life. Known as a denim destination, each store carries a wide selection of fits, styles, and finishes from leading denim brands, including the Company’s exclusive brand, BKE. Headquartered in Kearney, Nebraska, Buckle currently operates 440 retail stores in 42 states. As of the end of the fiscal quarter, it operated 440 stores in 42 states compared with 440 stores in 42 states at the end of the second quarter of fiscal 2023.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: All forward-looking statements made by the Company involve material risks and uncertainties and are subject to change based on factors which may be beyond the Company’s control. Accordingly, the Company’s future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. Such factors include, but are not limited to, those described in the Company’s filings with the Securities and Exchange Commission. The Company does not undertake to publicly update or revise any forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.

Note: News releases and other information on The Buckle, Inc. can be accessed at www.buckle.com.
Financial Tables to Follow

THE BUCKLE, INC.   CONSOLIDATED STATEMENTS OF INCOME (Amounts in Thousands Except Per Share Amounts) (Unaudited)
	Thirteen Weeks Ended						Twenty-Six Weeks Ended
	August 3, 2024			July 29, 2023			August 3, 2024			July 29, 2023
SALES, Net of returns and allowances	$	282,392		$	292,428		$	544,872		$	575,262
COST OF SALES (Including buying, distribution, and occupancy costs)		149,858			154,016			291,641			303,593
Gross profit		132,534			138,412			253,231			271,669
OPERATING EXPENSES:
Selling		70,742			68,737			134,468			134,839
General and administrative		13,532			12,914			28,107			26,339
		84,274			81,651			162,575			161,178
INCOME FROM OPERATIONS		48,260			56,761			90,656			110,491
OTHER INCOME, Net		3,733			3,693			7,487			6,832
INCOME BEFORE INCOME TAXES		51,993			60,454			98,143			117,323
INCOME TAX EXPENSE		12,738			14,814			24,045			28,747
NET INCOME	$	39,255		$	45,640		$	74,098		$	88,576
EARNINGS PER SHARE:
Basic	$	0.79		$	0.92		$	1.49		$	1.79
Diluted	$	0.78		$	0.92		$	1.48		$	1.78
Basic weighted average shares		49,854			49,513			49,854			49,513
Diluted weighted average shares		50,221			49,875			50,197			49,868

THE BUCKLE, INC.   CONSOLIDATED BALANCE SHEETS (Amounts in Thousands Except Share and Per Share Amounts) (Unaudited)
ASSETS	August 3, 2024				February 3, 2024 (1)				July 29, 2023
CURRENT ASSETS:
Cash and cash equivalents	$	287,266			$	268,213			$	275,583
Short-term investments		21,856				22,210				23,714
Receivables		7,698				8,697				9,675
Inventory		131,418				126,290				136,074
Prepaid expenses and other assets		20,962				18,846				10,181
Total current assets		469,200				444,256				455,227
PROPERTY AND EQUIPMENT		500,236				489,037				475,997
Less accumulated depreciation and amortization		(360,903	)			(360,200	)			(356,737	)
		139,333				128,837				119,260
OPERATING LEASE RIGHT-OF-USE ASSETS		292,194				280,813				251,978
LONG-TERM INVESTMENTS		26,984				24,993				23,616
OTHER ASSETS		12,560				10,911				11,466
Total assets	$	940,271			$	889,810			$	861,547
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	62,820			$	45,958			$	54,261
Accrued employee compensation		24,478				49,827				22,357
Accrued store operating expenses		26,124				19,067				26,533
Gift certificates redeemable		13,214				16,667				12,960
Current portion of operating lease liabilities		79,583				85,265				80,664
Income taxes payable		—				4,672				—
Total current liabilities		206,219				221,456				196,775
DEFERRED COMPENSATION		26,984				24,993				23,616
NON-CURRENT OPERATING LEASE LIABILITIES		248,424				230,141				204,620
Total liabilities		481,627				476,590				425,011
COMMITMENTS
STOCKHOLDERS’ EQUITY:
Common stock, authorized 100,000,000 shares of $.01 par value; issued and outstanding; 50,773,796 shares at August 3, 2024, 50,445,186 shares at February 3, 2024, and 50,445,926 shares at July 29, 2023		508				504				504
Additional paid-in capital		199,551				192,686				185,921
Retained earnings		258,585				220,030				250,111
Total stockholders’ equity		458,644				413,220				436,536
Total liabilities and stockholders’ equity	$	940,271			$	889,810			$	861,547
(1) Derived from audited financial statements.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240823329296/en/

Thomas B. Heacock, Chief Financial Officer

The Buckle, Inc.

(308) 236-8491

Source: The Buckle, Inc.

FAQ

What was The Buckle's (BKE) net income for Q2 2024?

The Buckle's net income for the second quarter of fiscal 2024 was $39.3 million, or $0.79 per share ($0.78 per share on a diluted basis).

How did The Buckle's (BKE) net sales perform in Q2 2024 compared to the previous year?

The Buckle's net sales for Q2 2024 decreased 3.4% to $282.4 million from $292.4 million in the same quarter of the previous year.

What was the percentage change in The Buckle's (BKE) comparable store sales for Q2 2024?

The Buckle's comparable store net sales for Q2 2024 decreased 6.6% compared to the same period in the previous year.

How did The Buckle's (BKE) online sales perform in Q2 2024?

The Buckle's online sales for Q2 2024 decreased 15.2% to $37.0 million, compared to $43.6 million in the same quarter of the previous year.

What was The Buckle's (BKE) net income for the first half of fiscal 2024?

The Buckle's net income for the 26-week period ended August 3, 2024, was $74.1 million, or $1.49 per share ($1.48 per share on a diluted basis).