The Buckle’s Quarter

This, I’m happy to say, is going to be pretty short. But I’ve gone to the trouble of reviewing their information so I might as well write something. 

As I’ve noted before, what intrigues me about The Buckle is the way they’ve integrated their private label brands with the other brands they carry in their merchandising. They call it “…a collaboration on the styling details throughout brands and private label.” They are not an action sports retailer, describing the business as “…a retailer of medium to better priced casual apparel, footwear, and accessories for fashion conscious young men and women.”   Nor, given their pricing are they focused on fast fashion, though no retailer can ignore the issue of fresh product and time to market these days.
 
At the end of their quarter on August 3, they had 452 stores in 43 states, up from 439 a year ago. Their 10Q and conference call are notable for their brevity (a good thing from my point of view as the one who has to read it) but also their lack of useful information (a bad thing, though I suppose one leads to another).
 
Sales for the quarter rose 7.9% to $232.5 million compared to the same quarter last year. Comparable store sales rose 3.2%. This was “…primarily due to a 3.5% increase in the average number of units sold per transaction and a 1.2% increase in the average retail price per piece of merchandise sold, partially offset by a 1.6% decline in the number of transactions at comparable stores during the period.” However, they also had more stores, a one week shift in the fiscal period, and online sales growth. Online sales were up 5.3% to $16.8 million. The Buckle does not include online sales when calculating comparable store sales.
 
The chart below from their 10Q shows their sales by category. 
 
 
It makes you think what the impact on various retailers in addition to The Buckle would be if denim became unpopular. I know, that’s hard to imagine.
Their gross profit margin (which, remember, for a retailer includes buying, distribution and occupancy costs- not just product cost) from 40.1% to 40.6%. That’s a pretty attractive margin. It increased because of the extra week and due to leveraging certain costs over more stores.
 
There’s nothing particularly notable about their selling and general and administrative expenses. They were up in line with sales growth.
 
Net income rose from $23.2 to $25.1 million. In both periods, that was 10.8% of revenue.
 
The balance looks fine, but there’s literally no discussion of it or any footnotes. Too bad. There are some items I was curious about.
 
Why, as one analyst asked,  are you bucking the trend we’ve seen in some retailers recently? CEO Dennis Nelson says, “We take a true specialty store approach, where not only the selection of the product of continuing to flow new product in to create the excitement, but we really have a high quality sales management team throughout the company that supports our managers who are promoted from within. And they do a very nice job of developing teams that can help the guest and really benefit them in finding the right fits and the outfits. And that’s a real key part of our business as our team in the stores and our sales management team that helps develop them and keeps them looking for the next level.”
 
That is just an excellent job of not saying all that much, though I have no doubt, whatever it means, that it’s true.
 
And that is the end of what I think is the shortest article on a 10Q I’ve ever written.