The Buckle, Inc. reported that net sales for the 14-week fiscal quarter ended February 3 decreased 4.8 percent to $382.4 million from net sales of $401.8 million for the prior-year 13-week fiscal quarter ended January 28, 2023. Comparable store net sales for the 14-week period ended February 3, 2024, decreased 9.6 percent from comparable store net sales for the prior year 14-week period ended February 4, 2023.

Online sales decreased 12.4 percent to $65.5 million for the 14-week fiscal 2023 fourth quarter, compared to net sales of $74.8 million for the 13-week fiscal 2022 fourth quarter.

For the quarter UPTs increased approximately 0.5 percent. The average unit retail increased roughly 1.5 percent, and the average transaction value increased about 2 percent.

Women’s
Women’s merchandise sales for the fourth quarter were down about 8 percent compared to the prior-year fiscal quarter and represented approximately 41 percent of sales compared to 42.5 percent in Q4 fiscal 2022.

On a 14-week comparable basis, women’s merchandise sales were down approximately 12.5 percent.

The overall average women’s price point increased about 1.5 percent from $50.30 in Q4 2022 to $51.00 in Q4 2023.

Men’s
Men’s merchandise sales for the fourth quarter were down about 2 percent against the prior-year fiscal quarter, representing approximately 59 percent of total sales compared to 57.5 percent in the prior-year quarter. On a 14-week comparable basis, Men’s merchandise sales were down roughly 5.5 percent.

Overall, average men’s price points for the quarter increased approximately 3 percent from $54.50 to $56.05. Average denim price points increased from $86.25 in the fourth quarter of fiscal 2022 to $87.15 in the fourth quarter of fiscal 2023.

“Compared to the same 14-week period ago, our Men’s denim business was down about 1 percent, primarily due to reducing our inventory of street fashion brands,” said company VP Finance Adam Akerson. “In our core denim brands, we saw positive trends for the quarter, with the business in BKE and Buckle Black both improving year-over-year. The Men’s business had a nice performance in short sleeve tees, soft shells and vests in several of our accessory categories. We also saw strong sell-throughs in our private branded wovens, knits and sweaters for the quarter.”

Accessories and Footwear
On a combined basis, Accessory sales for the 14-week 2023 fourth quarter were down approximately 7.5 percent compared to the prior-year 14-week quarter, while Footwear sales were down about 41 percent. The two categories reportedly accounted for roughly 11 percent and 6 percent, respectively, of fourth-quarter net sales, compared to 10.5 percent and 9 percent for each in the fourth quarter of fiscal 2022.

“Our Q4 comparisons also continued to be challenged with declines in our HeyDude volume, particularly on the Men’s side,” Akerson said. “Fourth quarter net sales for our Men’s business without HeyDude compared to the same 14-week period a year ago were down about 1.5 percent.”

For the quarter, average Accessory price points were up approximately 1.5 percent and average Footwear price points were up 10.5 percent.

Denim and Tops
Denim accounted for approximately 44 percent of sales in the 2023 fourth quarter, while tops accounted for approximately 29.5 percent in the period, compared to 41.5 percent for denim and 30 percent for tops in the fourth quarter of fiscal 2022.

The women’s denim business for the quarter was reportedly down about 6.5 percent compared to the comparable 14-week period in fiscal 2022. While the overall women’s denim business was down, the retailer said it was excited about the continued growth in the performance of premium fits and fabrics in the company’s Buckle Black Label, which grew about 18.5 percent during the 2023 fourth quarter. The core BKE line also reportedly performed better than the average.

Average denim price points increased from $79.75 in the fourth quarter of fiscal 2022 to $81.25 in the fourth quarter of fiscal 2023.

“For tops, our fashion tops continued to be challenging, with many of our women’s guests focusing on essential styles and easy-to-wear pieces,” shared Akerson.

Youth
Akerson also said the retailer continued to see growth in the Youth business during the quarter, with combined youth business growing approximately 4 percent over the prior-year 14-week period.

Private Brands
“Our overall private brand penetration continued to grow as our buying teams continued to develop and deliver a strong assortment across all categories, he noted. “Private label represented approximately 50 percent of Q4 sales compared with 48 percent a year ago and 46 percent for fiscal 2023, compared with 44.5 percent in fiscal 2022.

Income Statement
Consolidated gross margin for the quarter was 52.3 percent of net sales, down 70 basis points from 53 percent in the fourth quarter of 2022. Company CFO Tom Heacock said the current quarter decline results from deleveraged buying, distribution and occupancy expenses partially offset by a 20 basis point improvement in merchandise margins.

Selling general administrative (SG&A) expenses for the quarter were 27.1 percent of net sales compared to 25.6 percent for the fourth quarter of 2022.

Heacock said the fourth quarter SG&A increase was due to a 150 basis-point increase in store labor-related expenses, a 35 basis-point increase in marketing spend, a 30 basis-point increase in G&A salaries, a ten basis-point increase in equity compensation expense and a 25 basis point increase in other SG&A expense categories, and these increases were partially offset by a 60 basis-point reduction in incentive compensation accruals and a 40 basis-point decrease in e-commerce shipping expenses.

“Our operating margin for the quarter was 25.2 percent compared to 27.4 percent for the fourth quarter of fiscal 2022,” he said.

Net income for the fourth quarter of fiscal 2023 was $79.6 million, or $1.59 per diluted share, compared with $87.8 million, or $1.76 per diluted share for the fourth quarter of fiscal 2022.

Fiscal Full Year Results
Net sales for the 53-week fiscal year ended February 3 (fiscal 2023) decreased 6.3 percent to $1.26 billion, compared to net sales of $1.35 billion for the 52-week fiscal year ended January 28, 2023 (fiscal 2022). Comparable store net sales for fiscal 2023 decreased 8.0 percent from comparable store net sales for the prior year 53-week period ended February 4, 2023.

Online sales decreased 10.3 percent to $206.5 million for fiscal 2023, compared to net sales of $230.4 million for fiscal 2022. Online sales were down 11.8 percent year-over-year compared to the corresponding 53-week period in fiscal 2022.

For the full year, UPTs were flat. The average unit retail increased approximately 1 percent, and the average transaction value increased approximately 1 percent.

For the full year, gross margin was 49.1 percent, down 120 basis points from 50.3 percent in the prior year. The current quarter decline is due to deleverage buying, distribution and occupancy expenses and a 20 basis point reduction in merchandise margins.

For the full year, SG&A had 27.6 percent sales compared to 25.9 percent for fiscal 2022. The full-year increase was said to be due to a 135 basis-point increase in store labor-related expenses, a 30 basis-point increase in G&A salaries, a 25 basis-point increase in marketing spend, a 20 basis-point increase in equity compensation expense, and a 20 basis=point increase in other SG&A expense categories and these increases were again partially offset by a 60 basis-point reduction in incentive compensation accruals.

Full year operating margin was 21.5 percent of net sales in fiscal 2023 compared to 24.4 percent for fiscal 2022.

Net income for the 2023 fiscal year was $219.9 million, or $4.40 per diluted share, compared with $254.6 million, or $5.13 per diluted share for the fiscal year ended January 28, 2023.

Balance Sheet Items
Inventory was $126.3 million at year-end, up about 1 percent from the prior year-end. Total cash and investments of $315.4 million, which was after payment of $196.7 million in dividends during the year.

“We ended the quarter with $128.8 million in fixed assets of accumulated depreciation,” Heacock shared.

Store Count
The Buckle ended the year with 444 retail stores in 42 states, compared with 441 stores in 42 states at the end of fiscal 2022. During the quarter, The Buckle opened four new stores and completed four full store remodels, two of which were relocations into new outdoor shopping centers. BKE also closed three stores in Q4, bringing the full year counts to nine new stores, 18 full remodels and six store closures.

“Of our 18 full remodels during the year, 11 were relocations to new outdoor shopping centers, reflecting our ongoing strategy of ensuring that we are located in the best shopping environment in each of our markets,” Heacock explained. “Cumulatively, over the last three years, 42 of our 56 full remodels have been relocations to new outdoor centers. Besides making better locations, these remodels also frequently enable us to take on more space with our new stores.”

Heacock said that for two of their recent projects, the extra square footage allowed BKE to close a standalone new store and move everything back under one roof.

Current plans for fiscal 2024 include opening eight new stores and completing 15 to 19 full remodel projects with at least half of the planned being relocations to new outdoor centers.

“We also have closed two stores year-to-date, and two additional store closures are planned for early April,” Heacock shared.

The Buckle does not provide future sales or earnings guidance.

Image courtesy The Buckle