BKE - Earnings call transcript Q3 2018

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the conference call.

For today's call, members of Buckle's management on the call today are Dennis Nelson, president and CEO.

We have Tom Heacock, senior vice president of finance, treasurer and CFO; Kelli Molczyk, vice president of women's merchandising; and Bob Carlberg, senior vice president of men's merchandising.

As they review the operating results for the third quarter, which ended November 3, 2018, they would like to reiterate their policy of not giving future sales or earnings guidance and have the following safe harbor statements. the Litigation under XXXX. Act statement harbor Private Reform Securities of Safe factors, beyond forward-looking company subject and on the made to may material based All by uncertainties involve statements company's the control. risks and change, which be are results future expressed from in such financial implied differ forward-looking materially Accordingly, the statement. and may company's any performance those or factors but are Commission. in with filings company's and include, not Exchange described Such the the limited to, Securities those if therein, revise The or company projected to undertake make forward-looking clear future experience does be even it publicly update changes any results, statements or expressed will not that realized. any or not implied

unauthorized does Additionally, or the company's company transcripts conference recordings or reproduction recordings not the Any or quarterly dissemination expressed of reproductions authorize the its calls of the of without audio consent. written as Heacock. be over sir. the go turn the may not like I Tom be conference now, should relied Mr. inaccurate. Please would host, information And call to ahead, to our upon

Tom Heacock

for afternoon. afternoon, joining Good us thanks this and

period diluted $X.XX of release per Our for $X.XX prior-year fiscal XX-week store November Comparable XXXX, for prior for XXXX, net or on compared November the million net year-to-date to to $XXX.X XX-week November compared compared for million to decreased XX, XXXX which to diluted of was quarter. prior-year $XX.X prior-year compares period store sales period October November sales reported prior-year ended million XX, a in sales XX-week quarter million basis, or $XXX.X ended Comparable which store third X, XX-week million or X, income million the XX-week X.X% sales XX, XXXX the the sales million to decreased to on X, the fiscal the for a third net period million, XXXX. the to share XXXX. for ended million for Online sales year, quarter net fiscal to third of press comparable to for net $XX.X basis, per on share for a from basis sales per the fiscal for X, sales quarter million prior-year period period, XX-week $XX.X period ended Net prior-year of the share XX-week to compares fiscal decreased the or sales million XXXX, which XX-week million XX-week and for $XXX.X X.X% period, compares increased diluted Year-to-date same a third ended for a $XXX.X ended $XX.X per November share period. income October $X.XX income $XX.X which sales the period. November XX-week ended the $XX.X diluted increased the Year-to-date X.X% were that XXXX. X.X% net was prior-year the X.X% for comparison on of sales net period $XX.X XX-week basis XX, on XX-week X.X% the XX-week $XX.X for for ended in down online XXXX. the net of income XX-week October X, to period $X.XX net

costs, and in year-over-year third XX deleveraged The a merchandise basis was points from margin XX.X% quarter. decrease quarter of value The by point date, prior-year to UPTs retail X.X%. about buying XX The offset down distribution the approximately average UPTs decreased transaction increased decreased approximately was occupancy X%. the XX increased approximately unit margin. average points transaction decreased and X.X%. X%. value and in the a the result the X%, quarter, basis For X%, approximately Year average the unit approximately average retail partially for of XX%, basis improvement decreased Gross

occupancy the same margin offset year-to-date gross period was of result XX% XX the a points a which compared costs. basis by XXXX. merchandise the improvement sales margins, increase quarter increase net for percentage net partially of up was XX.X% and buying sales in XX of the XX distribution sales to net fiscal from a point basis Selling third basis The of quarter XX.X%, was period, last of expenses as for point in For were for XX.X% year. the

expenses the XXXX. of For year-to-date XX.X% selling period, sales, were compared to XX.X% in fiscal

increase primarily to net in the fiscal the of to both fiscal other For compared both for year-to-date increased investments, XXXX. periods, quarter the sales expenses net for consulting G&A professional increased third also for well and to G&A were were spending of quarter strategic initiatives, by store as terms compensation compared compensation attributable expense. net X.X% of to partially was XXXX. of current-year and as primarily in home-office reductions and The X.X% the X.X% expenses administrative is offset X.X% is increase of which the General expense. sales, of quarter Year date, equity and fees result in increased IT payroll sales

percentage $XX.X for quarter income of was income bringing $XX.X pre-tax XX.X%, compared net to million a net million, compared was compared XX.X% income million quarter of for to for XX.X%, in third third XXXX, the for XX.X% compared year. net for $X.X to quarter the XX.X% XXXX, XX.X% quarter also Income-tax to million, million compared to for the third-quarter net same XXXX, for fiscal date, XXXX, margin margin income XXXX. and income last the to for of compared million XXXX. period $XX.X period for year-to-date bringing and XXXX third of period, year, compared expense XX.X%, million operating year-to-date $XX.X for income-tax this quarter was was prior to fiscal $X.X for income other expense quarter compared was fiscal to XX.X% as fiscal the $X.X to year-to-date the to for fiscal fiscal XXXX $X.X to was operating fiscal the Our the to our for the fiscal the for Other year. Year pre-tax million of

of total included of $XXX.X sheet XXXX release November to $XXX.X X% XXXX, fiscal up the cash press million, of quarter end fixed quarter also of was million million XXXX investments total comparable last of At the markdown accumulated inventory which net and which in following. up as same Inventory was a and year. of which and approximately $XXX.X October XX, of at inventory store up, XXXX. balance million XX% to basis Our $XXX.X from inventory end, as included period assets compares October X, We approximately depreciation. the $XXX.X and ended the as of million, XX, million the on with $XXX.X was compared

for quarter and expenditures million capital $X.X depreciation $X.X the were Our million. expense was

capital $X.X and million. $XX.X Year broken is remodels corporate capital date, million expense store depreciation period, year-to-date at the capital down $X.X as million were for was spending technology $X.X to For million distribution and the store headquarters expenditures and center. upgrades and for spending follows:

remodels. investments. both the or the any capital the or Based planned additional do expenditures During quarter. new any store to X, now the this quarter, IT fiscal year. time, quarter, have new $XX full-store which any of open On and includes remodels our be planned million, we to we million the November for fourth the after for expect stores of projects store complete not we for $X also we range At in any the plans, on finished our end did openings year fourth not full remodel total these

stores XX XX quarter end compared stores XXX at quarter closed to We period in the of XXX during of stores with the states, two the to the states fiscal XXXX. also end third retail in

square the X.XXX of I'll Additionally, million to quarter, the turn of Kelli our feet President at year was Women's a over now, time call end X.XXX footage compared Molczyk, the ago. total Vice square of to million our the same as Merchandising. And

Kelli Molczyk

categories Average women's quarter. period quarter decreased of merchandise down to fiscal of merchandise the for Women's I start of price points were to Tom. the the sales the were highlighting in like denim merchandise women's X%. third third same X.X% for XXXX. the approximately the would quarter. XX-week in down the Compared Thanks, fiscal fiscal fiscal performance to quarter quarter approximately ago, $XX.XX XXXX from against a $XX.XX sales year prior-year by our

approximately $XX.XX. women's to last about net quarter, decreased business sales, of the our and year XX.X% price For points X% to was $XX.XX average women's XX% compared from

to denim price as guest shifts still business, impacted points, to we continue see denim For continued at in regular average be fashion points $XX. price women's the by preferences lower to sales under

driven purchases length, and detailing. shorter Our higher end, at as and overall of well as by quarter quarter as points well alternative fashion of certain price added as new were denim receipts early other styles. extended of inventory inseams for the and under, subtle $XX was planned hemlines Drivers denim

through sweaters fashion cozy For drivers quarter. knits for simple and the soft sales were wear, fashion and

impacts the front more, buy with button of We We also program woven. tops and monthly saw continue sweaters. popover our sales simple drive offerings trading to fashion knits sales synthetic unit more and comfortable and save in of with

lift our Carlberg, comfortable winter outerwear And during more plan that feel discuss and our footwear both categories. private our fashion with sales, category. to a turn into label we buying Vice and performance warehouse in we capitalized dollar are I'll the into Later bit regional outerwear buys markets. deliveries specific key in Our saw performance to carried Bob and performance end same Senior sales inventories QX functional in comfortable move point sweaters. as President Of our that, to the Merchandising knits price paid categories, quarter's outside themes while manage unit also to we on weight and drive heavier brands and as from over and it and of wearing over in We brands men's merchandise helped inventory with time. for the men's in in-season off aided guests Similar neared footwear, more that are

Bob Carlberg

the men's down third price fiscal $XX.XX Kelli. denim same year approximately decreased quarter Compared sales the XX-week to the merchandise XXXX approximately sales of quarter. quarter in X.X%. of prior-year merchandise for XXXX. quarter third period X% $XX.XX Average fiscal a Thanks, ago, Men's against the fiscal points fiscal in to were the up were from

sales X% year XX% and XX.X% price For the our compared last from to approximately $XX.XX quarter, points net average men's was $XX.XX. business to approximately men's of decreased

growth quarter, long the response and sales all in unit good categories, denim sweaters with saw been bottoms, up. except accessories. The has we During

a retail, the dollars However, slight the decrease. lowering mentioned of earlier, the average as to took

by brands, selection. dominate to Our BKE continue private denim our driven

us needed. room are product Thanksgiving giving adjustments We the quality our for after Overall, are if comfortable and markdowns level with fall-winter down, of inventories.

did store For not promotion addition our Thanksgiving opening. we BKE, promotion American that was Participating through the to continued GWPs. our the year, guests Revival or practice Rock women's I'm credit Fighter, will Oakley day on brands card. Gimmicks, -- promotions, value business in the and sorry, holiday are with Buckle the of men's giving after our on added our start This both have start our and we

year, the GWPs save are will and Christmas, last give time merchandise we buy which have we on As first Oakley Rock with impact a is did redeemable the after Further, product the boost for us increased gift margins. more, planned floor, cards which Revival January. in to more no our

results for sales each quarter accessory and to accounted the respectively, fiscal were of quarter, the and combined for same to a points in of were were X% XX.X%, a for X.X%. net Again, third-quarter on the for sales, for of of XX% which for fiscal quarter XX-week accounted turning about footwear and compares ago, price period basis. XXXX. down approximately down XX% approximately Average up against were the categories third and Now X.X% to approximately footwear approximately X.X%. up in while each XX.X% X% Accessory sales tops quarter X.X% accounted denim These points XXXX. which year combined third for compares X%, approximately fiscal the two basis X.X% sales a on and approximately price average

XX% increased with Our private-label And during your mix under we sales. just welcome quarter, of questions. that, of representing net product the

Operator

Thank [Operator you instructions].

with the go Kanaga from Bank. Deutsche Please line first ahead. question, Our of Tiffany

Tiffany Kanaga

for touched we're inventory growth? over I up particular, a sales inventory as front? know would In expectation position the that But on margin into caught us, eye year negative compare your the a going which year, you position quarter, especially, up does shape how you fourth almost in despite merchandise our XX% tough your for it little. dig on being against

Tom Heacock

we felt in you, Thank our is low last guy's inventory way year The we gal's inventory in denim. we Tiffany. planned this year both and were

as knits, of a our us. for key well which that's part is category So as increase, big a

we Like have year planned we of ago. number on some even few the ago. new think, timing also. it if up month, a So think, effect we though had years two but a I look, inventory's And a I was that it, The over quite XX%, smaller receipts.

million $X good, have than will eight next actually be we'll this feel the but good see to weeks higher we and think, our key feel particular about how just I were inventory. margins We groups proceed.

Tiffany Kanaga

Buckle's if noticed mall, you're this year. I said beyond for Friday And strategy your and already overall? comment right. could deeper one you've what holiday We've more. for All some you Black discounts promotional around GWPs seeing get on Can in the the what

Dennis Nelson

Well, we wanted to seems the as us People in some there's point it extra kind and we additional extra sale seems And well. little so on don't did make seem for older sale, little there up a half-off our way. like clear of more help product to an groups of that the It to of discounting some malls attention. a third our shop like groups. needed

Operator

Thank you.

& King Our Associates. next Steve id of CL with from the question line Marotta

open. is Your line

Steven Marotta

a AURs? It merchandise mix under will be on bit perhaps either as when about stores a to within begin well? pressure. talk you your Good denim-AUR you think year denim over you comment, remains evening, everybody. Can that the on year the basis little or please, flat Can increase

Dennis Nelson

the lot the the and and I still by out that leveling $XXX maybe lower the see of when lot our on down -- A the brands think, And the in of that's of at the would styling demand the is is we single on especially for from what's we a right were that digit, in the going working points a of ladies, had price driven them plus. now with lot guests. brands quarter, men's. fourth fashion

of kind being this quarter quarter for to fourth see we similar the third so the And season.

Steven Marotta

over year, down saying? a year little you're bit, But

Dennis Nelson

Do you of have year? fourth quarter last

Tom Heacock

my the off top of Not head, no.

Dennis Nelson

I reported be it that what numbers we on thinking similar. have would to was for to comparing just third get quarter, you. We'd information those

Steven Marotta

And you drift much. little your we that stores. bit given about my footprint do very in? with with Would footprint, store probably last Can Are you it won't XXX upward at the age about comfortable I store roughly how you assume it question has drift omnichannel downward? a level? digital talk to live think

Dennis Nelson

We a close. the pretty the of couple we're end think might closings We have at more year.

sense now. prime to continue look at economics as come that have to they up. we we But yet. continue make and feel that to the right going review opportunities we areas We look But what's at on

Operator

so [Operator please instructions] continue. I have this at no additional time, questions

Tom Heacock

let wrap be and to today. There's We keep with questions. everyone their We no on need get additional don't day. everybody can up it quick and

very for a participation you have and your holiday. much great week thank wonderful So and a

The Buckle, Inc. (BKE) 26 Nov 182018 Q3 Earnings call transcript