The Buckle, Inc. continued to bury its competition, posting impressive results in an otherwise dreary retail third quarter as the self-described “denim destination” continued to ride strength from online sales and growing comps. Net sales for the Kearney, NE-based mall retailer grew 9.8% on same-store sales that were up 4.3%. At 71 cents per share, EPS narrowly exceeded analysts’ expectations for the quarter.
Sequentially, strength tapered a bit from Q2 revenue and comps growth of 13.6% and 8.6%, respectively, but management expects positive returns from an estimated 20 new locations that will be opening in the next fiscal year.
As noted, online sales was a significant contributor to revenue growth as The Buckle reported web revenues up 41.9% for the quarter on top of 50.8% growth for the year-to-date. Online sales are not included in the company’s same-store sales figures.
Gross margins, which improved approximately 60 basis points to 44.2% of sales from 43.6% a year ago, benefited from a 90% improvement in merchandise margins that was driven by reduced markdowns that management said resulted from strong sell-through of new products.
By product category, the retailer continued to see double-digit growth from its women’s merchandise, as the segment surged 17.5% on strength from denim, woven tops, sweaters, outerwear, accessories and footwear.
The women’s business accounted for approximately 63% of net sales for the quarter compared to 58.5% in Q3 last year. Overall average price points increased about 3% to $45.10 from $43.75 a year ago.
On the men’s side, which accounted for 37% of sales, merchandise sales slipped 1.5% despite strength from denim, outerwear and footwear. Average price points increased approximately 6% to $53.00 from $50.10 a year ago.
Combined accessory sales for the quarter were up approximately 5.5% and combined footwear sales were up approximately 22%. These two categories accounted for approximately 7% and 5%, respectively, of third quarter net sales, which compares to approximately 7.5% and 4.5% for each in the year-ago period. Average accessory price points were down approximately 4% and average footwear price points were up approximately 10.5%. For the quarter, denim accounted for nearly 46% of sales, and tops accounted for close to 35%, which compares to approximately 43.5% and 39.5% for each in the year-ago period. The private label business was slightly down as a percentage of net sales at a little more 25% of sales.
Units per transaction for the quarter increased about 4.5% while average transaction value and average unit retail increased approximately 6.5% and 2%, respectively.
