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Bear of the Day: The Buckle (BKE)

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Despite continued concerns over Amazon and shifting consumer tastes, this earnings season was actually a pretty good one for the retail sector. Numerous companies in the space delivered nice surprises, while share prices soared across the board too.

However, not all companies have benefited from this trend, as several saw weakness in the quarter, continuing their overall bearish trends. One such firm that stumbled this earnings season and may be one to continue avoiding is The Buckle (BKE - Free Report) .

BKE in Focus

The Buckle is a retailer of casual footwear and apparel for both men and women in the U.S. market. The company currently has over 450 stores in 44 states, so it has a pretty wide geographic reach. Unfortunately for BKE though, the company has largely fallen on tough times lately, as the stock has lost over 36% of its value in the last 52 weeks alone.

The company has struggled in this uncertain market environment, and a big reason for the sluggish stock price has definitely been its performance in earnings season. In the past four quarters, the company has missed expectations in three of them, posting a four-quarter average miss of roughly 3.1%.

Misses in earnings season aren’t the only reason investors have been punishing the company though, as analysts have been ratcheting their expectations for BKE earnings lower in recent weeks. In fact, recent estimate cuts have taken the consensus estimate down by 10% in the past two months for the current quarter, and down 6.6% for the full year.

With these recent cuts, BKE is now expected to see earnings shrink by 22% this year when compared to last, while sales are expected to fall by 8% this year as well. Clearly, more pain is ahead for BKE in the near term—though it does see some more favorable numbers in the following year—and that is why we currently have a Zacks Rank #5 (Strong Sell) for the stock.

Price, Consensus and EPS Surprise

Price, Consensus and EPS Surprise | Quote

Other Picks

Although this corner of the apparel market still has a low rank overall, there are a couple of solid buys that could make for intriguing picks. In fact, of the 35 companies in the segment right now, more than seven have ranks of ‘buys’, suggesting you just have to know where to look in this market to find the top selections.

One potentially impressive selection is Urban Outfitters (URBN - Free Report) , as this stock currently has a Zacks Rank #1 (Strong Buy) while it saw a positive earnings surprise last quarter too. Add in the fact that this stock was a rank 3 just a week ago, and this could be a more compelling selection than BKE, and especially right now (for the full list of top ranked stocks, click here).

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