The Buckle reported strong sales boosted its bottom line for the first quarter ended April 30, but the teen retailer missed on the lofty expectations of many analysts.
Net sales for first quarter increased 11.8 percent to $240.1 million compared to net sales of $214.8 million for the prior-year first quarter. Comparable store sales for the quarter increased 8.1 percent while online sales, which are not included in comps, increased 18.6 percent to $17.1 million, which was approximately 7.1 percent of net sales.
In a conference call with analysts, management said the strongest performing categories were mens denim, woven shirts, active apparel and accessories and womens denim, knit tops, active apparel, accessories and footwear. Mens and womens merchandise sales increased 14.5 percent and 10.0 percent, respectively.
Among other results, net income was $33.5 million, or 71 cents per diluted share, up 11.2 percent from net income of $30.1 million, or 64 cents per diluted share, in the year-ago period.
Gross margins for the quarter declined approximately 60 basis points to 42.9 percent of sales, which management attributed to an increase in distribution costs, which had a 40 basis point impact, and a 30 basis point decline in actual merchandise margins, which were partially offset by a reduction as a percentage of net sales in incentive bonus accrual.
Management noted that the increase in distribution costs was primarily attributable to the additional depreciation expense related to a new distribution center – which went live during the third quarter of last year – and also due to increased shipping costs.
