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Buckle Reports In-Line Q1 Earnings

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The Buckle, Inc.’s (BKE - Free Report) first quarter fiscal 2014 earnings per share of 78 cents came in line with the Zacks Consensus Estimate as well as the year ago quarter figure. Stock price rose nearly 1.6% on the index.

Buckle reported net sales of $271.7 million which came almost in line with the Zacks Consensus Estimate of $272.0 million and increased 0.7% year over year.

Comparable-store sales declined 0.9% from the prior-year period. However, online sales (not included in comparable store sales) grew 2.5% year over year to $21.4 million.

Total operating expenses came in at nearly $58.0 million, up 0.4% year over year. Higher selling expenses were partly offset by lower general and administrative expenses.

Buckle’s gross profit inched up 0.1% to $117.2 million, while gross margin contracted 30 basis points (bps) to 43.1%. The contraction was due to deleveraged occupancy, distribution and buying expenses and flat merchandise margins.

Operating profit came in at $59.2 million, almost in line with the prior year quarter while operating margin contracted 20 bps to 21.8%.

Other Financial Aspects

Buckle, which competes with Citi Trends, Inc. , ended the quarter with cash and cash equivalents of $169.7 million, receivables of $4.8 million and shareholder equity of $390.9 million. Further, the company had accounts payable of $ 36.4 million.

In the quarter, the company incurred capital expenditures of $10.1 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 upgradation.

As of May 22, 2014, Buckle operated 452 retail stores in 43 states.

Other Stocks to Consider

Currently, Buckle carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the retail sector include Foot Locker, Inc. (FL - Free Report) and American Apparel, Inc. . Both of these have a Zacks Rank #2 (Buy).

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