The Buckle, Inc. (BKE - Free Report) reported negative earnings surprise for the second quarter in a row. The company reported second-quarter fiscal 2016 earnings per share of 32 cents, missing the Zacks Consensus Estimate by a penny while also declining 34.7% year over year.
The company’s net sales of $212.2 million were in line with the Zacks Consensus Estimate but declined 10.1% year over year. Notably, this was the sixth straight quarter of the top-line matching the estimate.
Women’s merchandise sales decreased nearly 13% in the quarter, whereas Men’s merchandise sales dropped 5%. Women’s merchandise contributed 51.5% to total sales, while the Men’s business input was pegged at 48.5%.
Combined accessory sales fell nearly 5.5%, whereas footwear sales were down 9.5%. These two categories contributed nearly 10% and 5.5%, respectively, to second-quarter net sales.
Comparable-store sales dipped 10.8% from the prior-year quarter. However, online sales (not included in comparable-store sales) grew 1.4% year over year to $20.4 million.
We observe that Buckle’s net sales decreased 9.8% in July, 10.1% in June and 10.4% in May. On the other hand, comparable sales also declined 10.9% in July, 10.6% in June and 11% in May.
Buckle’s gross profit fell 15.5% to $79.9 million, while gross margin contracted 240 basis points (bps) to 37.7%. The contraction was mostly due to de-leveraged occupancy, buying, as well as distribution expenditures cropping up from the decline in comparable store sales. The drop in comparable sales impacted gross margin by 250 bps. Operating margin came in at 11.4% in comparison with 15.7% in the prior-year quarter.
Other Financial Aspects
Buckle ended the quarter with cash and cash equivalents of $168.2 million, receivables of $17 million and shareholders’ equity of $430.7 million. Further, the company had accounts payable of $48.8 million.
In the quarter under review, the company incurred capital expenditure of $9.2 million cumulating to $17.1 million for the first six months of fiscal 2016. For fiscal 2016, the company expects capex at around $28–$32 million, to be deployed toward outlet construction/remodel and technology upgrade.
As of Aug 4, 2016, Buckle operated 470 retail stores across 44 states. The company opened three new outlets in July.
Zacks Rank &Stocks to Consider
The company’s shares, which have declined more than 32% in the past one year, currently has a Zacks Rank #4 (Sell). Better-ranked stocks in the retail space include Citi Trends, Inc. (CTRN - Free Report) , L Brands, Inc. and American Eagle Outfitters, Inc. (AEO - Free Report) . All of these stocks carry a Zacks Rank #2 (Buy).
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The Buckle, Inc. (BKE - Free Report) reported negative earnings surprise for the second quarter in a row. The company reported second-quarter fiscal 2016 earnings per share of 32 cents, missing the Zacks Consensus Estimate by a penny while also declining 34.7% year over year.
The company’s net sales of $212.2 million were in line with the Zacks Consensus Estimate but declined 10.1% year over year. Notably, this was the sixth straight quarter of the top-line matching the estimate.
Women’s merchandise sales decreased nearly 13% in the quarter, whereas Men’s merchandise sales dropped 5%. Women’s merchandise contributed 51.5% to total sales, while the Men’s business input was pegged at 48.5%.
Combined accessory sales fell nearly 5.5%, whereas footwear sales were down 9.5%. These two categories contributed nearly 10% and 5.5%, respectively, to second-quarter net sales.
Comparable-store sales dipped 10.8% from the prior-year quarter. However, online sales (not included in comparable-store sales) grew 1.4% year over year to $20.4 million.
We observe that Buckle’s net sales decreased 9.8% in July, 10.1% in June and 10.4% in May. On the other hand, comparable sales also declined 10.9% in July, 10.6% in June and 11% in May.
Buckle’s gross profit fell 15.5% to $79.9 million, while gross margin contracted 240 basis points (bps) to 37.7%. The contraction was mostly due to de-leveraged occupancy, buying, as well as distribution expenditures cropping up from the decline in comparable store sales. The drop in comparable sales impacted gross margin by 250 bps. Operating margin came in at 11.4% in comparison with 15.7% in the prior-year quarter.
Other Financial Aspects
Buckle ended the quarter with cash and cash equivalents of $168.2 million, receivables of $17 million and shareholders’ equity of $430.7 million. Further, the company had accounts payable of $48.8 million.
In the quarter under review, the company incurred capital expenditure of $9.2 million cumulating to $17.1 million for the first six months of fiscal 2016. For fiscal 2016, the company expects capex at around $28–$32 million, to be deployed toward outlet construction/remodel and technology upgrade.
As of Aug 4, 2016, Buckle operated 470 retail stores across 44 states. The company opened three new outlets in July.
Zacks Rank &Stocks to Consider
The company’s shares, which have declined more than 32% in the past one year, currently has a Zacks Rank #4 (Sell). Better-ranked stocks in the retail space include Citi Trends, Inc. (CTRN - Free Report) , L Brands, Inc. and American Eagle Outfitters, Inc. (AEO - Free Report) . All of these stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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