Surging comps and a boost from online sales propelled growth at The Buckle for the second quarter as the mall-based retailer continues to remain immune to market conditions that are wreaking havoc on the rest of the retail environment.
The Kearney, NE-based “denim destination” reported a spike in profits as sales increased 13.6% to $192.9 million from $169.8 million in Q2 last year, exceeding analysts forecasts. BKE reported earnings rose 12.1% to $25.0 million, or 55 cents a share, in Q2, from $22.3 million, or 49 cents, in Q2 last year.
Improvements were driven by an 8.6% increase in comps and online sales (not included in comps) that spiked by 39.9% to $10.1 million from about $6.1 million in the year-ago period.
A 130 basis point gross margin improvement was driven by 90 point increase in merchandise margins and by the leveraging of buying, distribution and occupancy costs, which had a 40 point impact. Management said merchandise margin improvement reflected reduced markdowns as a results of strong sell-throughs on new product.
Management for The Buckle said revenue improvement was significantly impacted by a 27.5% increase from women’s merchandise sales in the quarter, which saw strength from denim, knit tops, active apparel, accessories and footwear. For the quarter, the women’s business was approximately 60% of net sales as compared to 53.5% last year. Price points on the women’s side were up about 5.5%.
Men’s merchandise was down 2% despite strength from denim, woven shirts and active apparel. The men’s side accounted for 40% of net sales as compared to 46.5% last year. Price points increased about 8%.
Combined accessory sales for The Buckle were up about 20% while combined footwear increased about 14.5%. These two categories accounted for 8.5% and 5%, respectively, of total sales as compared to 8% and 5% in the same quarter last year.
Denim accounted for about 35.5% of sales and tops accounted for about 39% of sales, as compared to 35% and 41%, respectively, in the same quarter last year.
