The Buckle Inc. saw its net income and comparable-store sales decline in the second quarter as growth in its men’s business was offset by a decline in women’s apparel sales.
The Kearney, Neb.-based youth specialty store chain reported net income for the three months ended Aug. 2 fell 2.7 percent to $24.5 million, or 51 cents a diluted share, from $25.1 million, or 52 cents, in the year-ago period.
Sales rose 1.4 percent to $235.7 million from $235.5 million, with same-store sales down 0.5 percent in the quarter and online sales up 1.7 percent to $17.1 million.
While the top-line performance exceeded the average expectations of Wall Street analysts for sales of $235.1 million, earnings per share came in 2 cents below the 53 cents anticipated.
Gross margin declined in the quarter to 40.3 percent of sales from 40.6 percent in the year-ago period, but investors were impressed by Buckle’s discipline with its inventories, which declined 4 percent to $128.2 million on a year-over-year basis.
Shares rose 3.6 percent to $48.79 in morning trading on the New York Stock Exchange.
On a conference call with analysts, Dennis Nelson, president and chief executive officer, commented, “The promotional environment continues to be pretty much the same as we’ve seen it for quite a while, maybe even a little more. That’s why we work with our exclusives and developing our own brands.…We see a lot of [competitors]…just trying to hit the lowest price and sell by price and we’re looking at the total idea of fashion, style, comfort, and to give the exclusive product.”
Karen Rhoads, chief financial officer, reported that merchandise margins were flat for both the quarter and the six months. In the quarter, units per transaction were up 2 percent, average transaction up 4 percent and average unit retail up 2 percent.
Men’s merchandise sales were up about 6 percent, to about 44 percent of sales, with denim and casual bottoms, knit shirts, shorts and accessories performing well. Average denim price points rose to $92.85 from $89.95. Women’s sales declined about 2 percent, to about 56 percent of sales, with strength in sweaters, active apparel and footwear. Average denim price points rose to $98.65 from $97.15.
Denim accounted for about 36.5 percent of sales and tops 32.5 percent, versus 37.5 percent and 32 percent, respectively, in the year-ago quarter. Private label represented 32 percent of sales in both periods.
Year-to-date profits fell 1.4 percent to $61.8 million, or $1.29 a diluted share, as revenues rose 1 percent, to $507.4 million, and same-store sales eroded 0.7 percent.
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