In a Nutshell: The denim-centric retailer reported lower markdown inventory in the 2019 fiscal year, helping to improve the margins that weighed it down in the previous year.
Thomas Heacock, The Buckle’s senior vice president of finance, treasurer and chief financial officer, said inventory was down approximately 1.5 percent on a same-store basis.
CEO Dennis Nelson, addressing The Buckle’s reaction to the coronavirus (COVID-19) pandemic, said the company was expecting shipping delays from China.
“Presently, we are seeing, maybe, one to four weeks’ delay depending on the product from China both the men’s and the ladies, probably predominantly in the denim categories,” Nelson said in Friday’s quarterly conference call. “And in the gals’ tops, we are seeing similar delays as well.”
Factory partners, he added, have helped steer the company through the “tariff situation,” and now he is confident vendors are doing everything they can to “temper the impact of the coronavirus.”
Sales: Net revenue in the fourth quarter reached $271 million, a 2.5 percent increase over the comparable period and in line with Wall Street estimates of $271.08 million. Comparable store sales ticked up 3.3 percent in the quarter and online sales rose 7.5 percent to $36.4 million.
Sales increased at a slightly lower rate throughout the full year, up 1.7 percent to $900.3 million. Comparable store sales were up 2.2 percent and online sales climbed 6.9 percent.
The Buckle successfully focused on exclusivity through private-label and outside brand partners in its women’s wear, according to Kelli Molczyk, Buckle’s vice president of women’s merchandising.
“Sweaters once again drove the largest gains in our tops assortment, while our knit selection remains strong with continued guest preferences around moderate price points, simply stated fashion, super-soft fabrics, and easy to wear, easy-to-pair silhouettes,” Molczyk said.
The retailer also began a ship-from-store program in the fourth quarter, leading to a “nice impact” in online sales, Nelson said.
In men’s, The Buckle saw its ninth consecutive quarter of expansion in the category, with accessories, casual, footwear, outerwear and youth apparel driving growth.
Earnings: The Buckle topped Wall Street earnings per share (EPS) estimates by nearly 10 percent in Q4, marking the third time in the past four quarters that it has exceeded EPS estimates.
Income for The Buckle Inc. was $47 million in Q4, or 96 cents per share, above the 85 cents recorded in the comparable period as well as the 87-cent average Wall Street estimate.
For the full year, The Buckle reported net income of $104.4 million for $2.15 EPS, beating the $2.05 Wall Street was expecting.
CEOs Take: “Our strong operating results during the quarter, which included comparable store sales growth of 3.3 percent and 270 basis points of operating margin expansion, completed a positive fiscal year and have us well-positioned heading into 2020,” Nelson said.
“These results are a testament to the commitment and dedication of our many talented teammates to our mission of creating the most enjoyable shopping experience for our guests,” he added.