The Buckle, Inc.’s (BKE - Snapshot Report) second-quarter fiscal 2014 earnings per share of 51 cents missed the Zacks Consensus Estimate by a couple of cents and came in a penny below the prior-year quarter.
However, this Zacks Rank #2 (Buy) company’s net sales climbed 1.4% year over year to $235.7 million, which surpassed the Zacks Consensus Estimate of $234.0 million. Improving merchandise sales at Men’s categories was partly offset by declining women’s merchandise sales. Stock price rose nearly 3.6% on the index.
Comparable-store sales dipped 0.5% from the prior-year period. However, online sales (not included in comparable store sales) grew 1.7% year over year to $17.1 million.
Total operating expenses came in at nearly $56.2 million, up 1.9% year over year. Higher selling expenses were partly offset by lower general and administrative expenses.
Buckle’s gross profit inched up 0.5% to $94.9 million, while gross margin contracted 30 basis points (bps) to 40.3%. The contraction was due to deleveraged occupancy and distribution expenses stemming from negative comps.
Operating income came in at $38.7 million, down 1.6% from the prior-year quarter while operating margin contracted 50 bps to 16.4%.
Other Financial Aspects
Buckle ended the quarter with cash and cash equivalents of $169.5 million, receivables of $12.4 million and shareholder equity of $406.7 million. Further, the company had accounts payable of $51.6 million.
In the quarter, the company incurred capital expenditures of $12.6 million. For fiscal 2014, the company continues to expect capex to be around $48–$53 million, to be deployed towards outlet construction/remodel and technology upgrade.
As of Aug 2, 2014, Buckle operated 456 retail stores in 44 states.
A Glimpse at the First Half of Fiscal 2014
For the six months ended Aug 2, 2014, Buckle’s earnings dropped 1.5% to $1.29 per share. Net sales to date came in at $507.4 million, up 1% from $502.2 million recorded last year. Also, the company incurred capital expenditure of $22.7 million during the first half of fiscal 2014.
Other Stocks to Consider
Other stocks in the industry looking attractive at current levels include Citi Trends, Inc. (CTRN - Analyst Report) and The Men's Wearhouse, Inc. , each carrying a Zacks Rank #1 (Strong Buy) along with Abercrombie & Fitch Co. (ANF - Analyst Report), with a Zacks Rank #2 (Buy).