BKE - Earnings call transcript Q2 2019

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Operator

Ladies and gentlemen, thank you for standing by and welcome to The Buckle's second quarter earnings release conference call. At this time, all participants are in a listen-only mode. Later, we will be conduct a question-and-answer session with instructions being given at that time. [Operator Instructions].

As a reminder, today's conference is being recorded.

Vice on Tom today of President Heacock, and Kelli management President Dennis Finance, of Buckle's Merchandising, Corporate CFO, CEO, Women's Secretary. Brady and Senior Molczyk, Counsel Men's of Merchandising the Senior Fritz, are call Nelson, Treasurer Bob and Members Carlberg, of General Vice and President Vice President

earnings reiterate Litigation As guidance the future XXXX, they X, which ended they review August following giving the the have Private of not operating like and results their to safe for sales under of or the Reform second quarter, statement XXXX. policy would harbor Act Securities

limited Securities or Accordingly, made All or projected company's financial and not may based company's statements factors uncertainties forward-looking or to, make factors publicly such future and differ involve expressed the update subject results even those those expressed Such statements. materially by any revise in forward-looking Commission. but that include, control. clear material in realized. on it risks beyond may not changes and to or implied results the does the company forward-looking be implied which performance change to may from are company's experience if Exchange be are company statements, and therein not undertake described the future any with any filings The the

inaccurate. express calls of be its information dissemination or recordings be audio transcripts should without not of consent. recordings reproductions does or company's as company relied reproduction the the quarterly the the call Additionally, conference authorize not Any may the of upon or written unauthorized

ahead. our host, over now would Heacock. Tom to I Please the conference go turn

Tom Heacock

this morning. and morning joining thanks Good for us

quarter XX-week quarter diluted $X.XX a the August reported income which prior for or year which for XXXX a ended compares ended year diluted $XX.X per on income net net $X.XX per per XXXX net was second that a press XXXX. prior was $XX.X basis ended share per release of million basis XX-week Our for the or the August period for period million ended to income basis, XX, or share X, net second X, which XX-week on million of income $X.XX which August $X.XX to August or share diluted XXXX XX-week basis X, diluted million August on share the which a XXXX. X, $XX Year-to-date $XX.X on compares

the ended net $XXX.X million week-second the in ended for $XX.X comparison X.X% to sales for X, for to store X.X% X.X% which million. of million to for increased net our the sales $XXX increased period sales X.X% the for net compared XX-week sales second for August XXXX, fiscal sales year period to period August were Comparable same X, period prior of XXXX. and store quarter to to to year-to-date sales year online million XX-week increased year $XXX.X the XX-week XX million. in XX-week period quarter fiscal compared X.X% to in the and X.X% prior prior Net million up sales quarter. the the sales same the prior $XXX.X Year-to-date decreased online Comparable comparison in year $XX.X increased XX-week

unit UPTs quarter, value approximately increased transaction decreased X% the average value and X%. Year-to-date, about transaction the the decreased X.X%. retail average the the UPTs and For approximately average approximately X.X%, X%, decreased average approximately X% decreased unit increased approximately retail

occupancy, margin, was by buying costs. XX the partially the prior quarter XX.X% was from distribution second sales in XX.X%, XX offset merchandise point as XX a and down The result quarter. in Gross margin year-over-year a basis net basis reduction year point of for improvement a basis points decrease the percentage of in

XX period XX.X%, in costs. and was basis was last point for for basis year. of in The from buying same period the period, gross approximately year-to-date decrease margin increase a distribution point and points year-to-date a basis XX XX margin reduction the the occupancy, For down the merchandise XX.X% result

percent of the to flat XX.X% XXXX. as for in expenses fiscal XX.X% Selling were net sales quarter Year-to-date, sales a of remained compared selling at expenses XX.X%.

increases marketing reductions expenses and payroll periods, store offset expense other and in certain expenses. online both in For fulfillment by selling were

of General primarily increased administrative sales were sales G&A quarter to of fiscal the expenses of well spending strategic X.X% were to X.X% compared initiatives. compared net payroll of net of XXXX. the G&A second Year-to-date increase as net in both X.X% year-to-date investments, sales fiscal for XXXX. attributable IT as for home is for in expenses other The increased office to quarter X.X% terms

operating second for XXXX. for compared fiscal was quarter X.X% Our to the XX% the margin quarter of

prior year-to-date the period income Other other year. the for second X.X% to margin $X.X was year. same period of period, $X to our was for fiscal year-to-date was last million for the compared in and compared operating the million the income For quarter to quarter million million $X.X XXXX compared for the XX.X% $X.X

XXXX, for Our million tax million for pretax compared quarter was XXXX, XXXX. XX.X% compared $XX.X XX.X% of to million income, income expense XXXX, for fiscal for to of percentage fiscal second was pretax net quarter $XX for $XX.X net bringing of XX.X% million to for to XXXX, in income XXXX. income to compared the income income also year-to-date compared fiscal a to fiscal $XX.X fiscal Year-to-date, as net second the fiscal taxes quarter XX.X% bringing

X% down which a the balance Our approximately X% comparable of $XXX.X was quarter-end, of million $XXX.X approximately included release inventory up Inventory and million compared sheet total X, $XXX.X markdown million X, inventory inventory of of a million At XXXX. as $XXX.X and included from and store following. as also XXXX which XXXX investments on was fiscal prior of $XXX.X and the August compares X, basis was end as which total year. million August to up cash August of to the press at XXXX, of

quarter the net of in $XXX.X accumulated ended with We million assets fixed depreciation.

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

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

the quarter, store store, year-to-date three two new our two Montana, and to closures. remodeling full one new completed full projects count we remodels bringing one store, store During in and one opened closed Kalispell,

We completing one prior full also additional anticipate store remodel to holiday.

Buckle still fiscal states store on to quarter of at XXXX. planned plans, states our be in Based capital and million the quarter the ended stores XXX $X compared current in of includes end IT XX expenditures the we which expect stores to with with million of range XXX XX both $XX second retail projects investments. the in

was million feet the end year square of feet square X.XX X.XXX total same our square to the at quarter the ago. a Additionally, at time compared footage million

it Kelli Molczyk, Women's over President turn now And Merchandising. I our of to Vice will

Kelli Molczyk

quarter I sales Tom. to quarter. fiscal for the start from the fiscal denim categories X.X% XXXX. the prior points would of up second by quarter of for in Average against fiscal women's second merchandise Women's $XX.XX quarter XXXX price Thanks highlighting quarter. in the year merchandise $XX.XX like approximately performance the of were decreased the our fiscal to

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

business. the shifted several align the patterns quarter to on summer deliveries in focus shopping guests the positive timing of for with continued women's categories and in seasons spring Our a resulted

disruptive created purchases. ankle within driving assortment patterns lengths, curvy various denim, fits For finishes excitement our and and QX

remains exclusively denim as to label guest important purchases. brands with point their private under additional Price with and as finding denim branded details denim predominantly Our favorite and developed well spur resonated retails around our fits shopping $XX. new

our into recently denim with have We added top new have stores roster continue our to selection and where denim brands in Wrangler introduce we expanded Levi's.

that a we fall denim for marketing reinforce in for our campaign feedback denim and around the offering can to we in have different encouraged fit message and it body launched highlight As campaign. our new by the to recently ties everybody and been initiatives types early all to products everybody, a styles

For light and weight looks working. were lengths, many to sweaters all sleeve to see well so Different different tops, pleased were received. heavier we fabrics tanks to

assortment the a denim and fashion mix guests wide business, their of through sweater with fashion wear and quarter. breadth Our favorite graphic pair for options bralettes tee or shorts to offered

are in everybody. tops continue for have we we the as nothing denim, brand to Just offering our to evolve doing

we offer newness and key Billabong, shopping to Crow like addition our selection White guest each our every brands upon building private our ThreePeople, and are and In for to expand assortments stores. label

their from Women's dollars and excitement to quarter and categories categories units shoes team forward from the did footwear with shoes, and accessories, spring fragrance, with platform guests add we the opportunities and pairings In and in fall inventory sandals while carried of summer job our holiday with reasons made and to cart. in mix through new for to of for accessories nice seasonal months. specialty new the controlling nicely a The casual the added and to and category building our earrings and belts QX look brands giving creating bracelets, easy apparel.

continue plan offer and with as to a of as partnering experience Cowboy, in Nashville the partnering boutique National American fall, bed in the enhancing their Society Urban For October. the official national with Cancer to engagement which events aimed sponsor various we at guest well Days Tennessee, includes breakfast Denim ultimate as

merchandise Men's to our Vice I category. over performance And men's discuss of to with Senior that, will the Merchandising, Carlberg, President it turn Bob of

Bob Carlberg

year were fiscal up the of X.X% XXXX Thank Average $XX.XX denim quarter. from you fiscal in prices XXXX. Kelli. prior in Men's comparison to $XX.XX quarter second for the merchandise the quarter the increased to in of fiscal sales second quarter fiscal

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

team proud partner talented design brands buying great serve to vendors, of and way our build the products, am guest. continued our I with has

second our include and positive the footwear. the button side. on result, categories denim, comps consecutive a seventh As represented Strong quarter men's fronts, quarter of youth

only disappointing are shorts we and that the year. to up next category For us for the inventory selection quarter, both were setting adjust able

private thousands all in brands for lifestyles. were time private newest strong Our quarter. selection Veece with our to to represent is the our in continue which second of first be stores the brand, all

to growth Coast event encourages shop and in branches our Lokai Hurley, way. we which only loyalty them mid-July, with not Our in traditional pricing also earlier. resulted strong promotion loyal event, fall rewards our to with quarter. Fox the the ran West Starting the special guest leading guests This during finish showed but annual another nice

carried the In addition, product youth-only locations started many Idaho. two opening testing years, quarter in of concept pop-up with for youth the stores during of the have we we although

in the to experience. early the with still test, are pleased and we we the Although product are the positive response

to our monitor business. of these is this holiday performance back-to-school strategy if the long-term We a locations determining will and continue before for throughout

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

grow and business XX% for our label of approximately to sales continues private quarter. the Our represented

Thank that, your welcome you. questions. with we And

Operator

Bank. of line Deutsche And will the Instructions]. from first [Operator Tiffany Kanaga go with our question Please come ahead.

Tiffany Kanaga

To for us sourcing is your would your coming on Chinese XX% Thanks product call, impacted from questions. December? vendors? that changing break you your percentage up in portion and you about later or of September our around China, to for shifting last List mix what update disclosure of down impact, how Hi. by taking in whether price X looking your increases there what mitigate Additionally, from tariffs any comes is are or follow

Dennis Nelson

a Well, vendors not morning. we year. before business are work tariffs still a us time with that are this makers that we of And throughout seeing period effect placing good have a very situations few on this branded that seeing orders. worked substantially Good as have handle year effect and we our will our long confirm having also we small this an over our a see throughout on very number the effect we prices, think we We with on and that have early I landed of on that prices year.

Tiffany Kanaga

it a to around which few with follow-up ask comments provide steeper the expect merchandise All might I right. into promotional? of would and dig you If in Would in been still trend all back-to-school margin you where the was bit you decline a holiday unusual the question. having in a for drivers them and quarter, the

Dennis Nelson

going against we think margin numbers. I some strong were Well,

we them. Tom still the mentioned quality in. liking our up our Inventories are margin narrative, look markdowns our in And to total. numbers the coming I product X% have think are And down. as of

we our situation year. we the So of into are with as half second comfortable go the

Tiffany Kanaga

Thank you right. so All much.

Dennis Nelson

Thank you.

Operator

to one. is Thank queue you. line Deysher John go then Pinnacle, then John one And it's before reminder, a we to star open. for questions, your star Deysher, with

John Deysher

Hello. you looks like making which What the driving the denim I is denim? than basic It have progress. dynamic are denim pressure the under side, on men's solid question, is is more why a price women's that?

Dennis Nelson

it's over the I mostly fashion change years. say would

will have the on substantially some of we brands range and ago the the our years selling label a have on $XXX several in And and even good brands remember, you As continue such, sold the we the over private denim though parts still of changed our $XXX that higher. as majority we brands and niche new environment are $XX in and that different below. country, we in our of lot

that's we the makes way our market. and in trend with go of so But to the it's are as gone the the sense selection, the just fits happy styles forward. change retail we the new substantial in the our prices kind new And and response but what has

fits looking as will deliver we guests So, their are looking they the what we what and forward. usual, and go and trying for have to as are favorite love our into market as

price and And so now. brand the different is that in working a right point market just it's

John Deysher

more on get is can is that up ASP most the actually ladies' right. years men's I quarter-to-date, explain X% I there thing and quarter specifically, denim that specific All But from mean, Is that? X%? ago. several why jeans whereas X% down in recent any

Dennis Nelson

brands remained have the less the the Well, There selling. vendors points has we men's, the consistent. price change been and in more in are

Just a there. consistency

So we have held up.

single a retails. would But ladies, the low I is go we it's see think The in some kind be remember it out about say, men's could feel be through drop possible that's as as a But leveled last the digit I the forward. there prices. good and with retails small of guess our at denim I presentation working still go half, percent was year there we now. don't the consistent I forward. we as decline and ladies' we of to continuing second think retail past would well

John Deysher

Okay. Thank you.

Dennis Nelson

Thanks asking. for

Operator

time. [Operator are up, Instructions]. time for Allowing participants to queue there no questions at this

Dennis Nelson

there hope rest we the has so no can day weekend. questions, today. the If up wonderful are us the joining for enjoys of call Thanks everyone and wrap a

Operator

Then X Central available after at today ladies AM and be midnight. XX:XX will September Time conference this replay for running through gentlemen,

your code again and and AT&T may TeleConference participation numbers access access That XXXXXX. code You Services. for conference replay AT&T for with the conclude by the using you today. X-XXX-XXX-XXXX access dialing or Those does X-XXX-XXX-XXXX entering XXXXXX. numbers system Thank of the our X-XXX-XXX-XXXX X-XXX-XXX-XXXX for

now may disconnect. You

The Buckle, Inc. (BKE) 23 Aug 192019 Q2 Earnings call transcript