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Buckle Q2 Earnings Miss by a Couple of Cents, Revenues Beat

ANF BKE

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The Buckle, Inc.’s (BKE - Free 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. and The Men's Wearhouse, Inc. , each carrying a Zacks Rank #1 (Strong Buy) along with Abercrombie & Fitch Co. (ANF - Free Report) , with a Zacks Rank #2 (Buy).
 




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