BKE - Earnings call transcript Q3 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by and welcome to The Buckle's third quarter earnings release. At this time, all the participant lines are in a listen-only mode. [Operator Instructions] As a reminder, today's call is being recorded.

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

As they review the operating results for the third quarter, which ended November 2, 2019, they would like to reiterate their policy of not giving future sales or earnings guidance and have the following Safe Harbor statement, which is under the Private Securities Litigation Reform Act of 1995.

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

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

the With over sir. that call go to Mr. will said, ahead, I Heacock. Please being turn Tom

Tom Heacock

us thanks this Good for morning joining and morning.

XXXX release ended $X.XX for November X, for per Our or million basis compared XXXX. net a November third share million year share quarter prior to third income XX-week XX-week on the per of a diluted on press XXXX $XX or $XX.X that income ended the diluted basis XX, X, was net quarter reported $X.XX that November

$X.XX ended period basis to on November compared share Year-to-date, year $XX.X net $XX.X XX-week net per period prior for diluted per a income basis income for XXXX ended or X, was X, million $X.XX November XX-week on the a million or the share of XXXX. diluted a

online prior comparison XX-week quarter increased of sales million X.X% $XX.X quarter $XXX.X to increased quarter. Comparable the and sales store compared to sales period prior net the X.X% year for Net third XX-week $XXX.X third X.X% year the same in XX-week sales million million. in to for the for to increased

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

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

a quarter merchandise from occupancy, point was costs. the with Gross percentage for sales was increase the basis third a in prior and buying the margin result XXX XX XX% of year year-over-year point as up XXX basis of in improvement net points quarter. improvement The basis in along distribution XX.X%, margin

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

XXXX. XX.X% compared flat were The during net payroll quarter year at reduced the store for Year-to-date, improvement sales Selling of third the XX.X% with fiscal of XX.X% sales. prior for primarily remained quarter expenses of the with of quarter. sales expenses result selling was the net the of expense

the Year-to-date, for of sales. X.X% flat the with for sales quarter General quarter with net administrative third of remained of prior the G&A expenses were at expenses year compared sales year. X% X.X% net last net

and quarter year. our margin quarter for to year-to-date margin same operating was fiscal XX.X% the for operating period last for XXXX the the for the compared to of Our XX.X% XX.X% compared was XX.X% third period

third bringing to income tax XX.X% versus for year-to-date for with also for XXXX, million income the XX.X% XXXX. income XX.X% XX.X% of the for expense pre-tax fiscal $X.X for compared a $XX.X quarter was other third year. $X.X tax of of year-to-date $XX.X period $X.X compared percentage the for with XXXX, million the net income quarter compared XXXX. $XX for with compared net income pre-tax million for the Income was quarter to for quarter million was net income for and million of as bringing fiscal million Year-to-date, million with fiscal $X.X third fiscal compared expense $XX.X fiscal XXXX income fiscal million Other was to XXXX last fiscal quarter XXXX, net

November X, fiscal total million, of sheet $XXX.X which at the million, XXXX of balance as $XXX.X investments of million the to XXXX. a compares included XXXX end as and million included which inventory was from also release as and which $XXX.X X, down of and November cash of inventory following: XXXX, press $XXX.X $XXX.X November X, X.X% Our of approximately of million

At net quarter down of year. the depreciation. to prior a was accumulated assets, in on was basis the store markdown end, X.X%, with quarter total inventory million $XXX.X comparable compared down fixed approximately inventory ended We

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

year-to-date was period, expenditures $X.X were million the and expense For million. depreciation capital $XX

$X for the capital store is spending technology remodeling headquarters and corporate upgrades, distribution capital and broken down build as at and out for Year-to-date, million spending center. follows: $X.X million

During remodels any complete or full to new remodels count November, and year-to-date store the full bringing one quarter, five store. store any didn't to remodels. open two new We our stores complete we during plan

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

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

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

Kelli Molczyk

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

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

quarter, results During positive our across categories. we of several achieved key the

For dams well of a resonated and the assortment extension of fits, new finishes momentum. our Darker bottom denim, fit bottom of the introduction all expanded guests. in gained across broader in offerings our sizes openings, Overall, rises brands and with waist openings

our private-label assortment built We at addition to in continued our saw exclusively in in growth brand. Buckle only growth denim outside

narrow price points to our on overall gap denim from our percentage While large make a price denim average $XX denims QX. point of up continued we under did business, the

denim we partnered our American denim of support Denim to into to the their of tie $X be every from pair month with research efforts. the and brands. To October ACS or programming sponsor the donated Cancer official performance, of participating Approximately will for donated for we sold the Society $XXX,XXX as Days

and women's guest were For centered around fall tops, simplified preferences warm styling. soft fabric, [indiscernible] hand

and our other brands well brands received. sweaters as continue as within fashion to label outside many private Our cardigans well be

EVA did fashion our the replaced early For boots of women's categories casual footwear, these boot more We see short our aided expansion in looks our some and two category. growth at functional sale. branded into

as markets. selection reducing look. manage by to margins. inventory how are inventory. fashion all diversifying the Our our Overall, in our overall continue sustained women's were in feel well improving off the is we our quarter, nimble some and Across women's mark accessories, throughout in overall where And our we different with more quarter several perform we and through categories segmented streamlining improvement buys we inventory areas, downs continue categories, sell-through change pleased on evolve. we to and With specific positioned, to

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

Bob Carlberg

quarter in Kelli. X% the Merchandised fiscal comparison quarter prior Average to increased year third $XX.XX the the fiscal from of XXXX in price were quarter. sales quarter to in in $XX.XX of fiscal the third denim points XXXX. fiscal up

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

eighth as quarter decline marked the quarter outerwear All of that right The for is buying planned flows third route up. categories year. continue guest slight way and in and were we this bit outerwear sweaters we growth our later We these outerwear are except product. that men's found our the pleased was and flow categories, the we We believe going a forward. consecutive

be boots. and two Results our strongest on great Dude, Footwear and with continues Hey round. plan strength product maintain by stores to be to teammates were to teams business test year assortment both develop was the pressure of everywhere regular our marketplace. a our and exclusive of along exclusive downward positive growth well continually with price our portion fall most in continue them allows our in category by particular our keeping This received open Overall, the ability our selection strong for both large the that styles we a unique to else. used proud guests, styles keeps even fueled with us

XXXX. accounted X% Footwear X% two combined fiscal quarter X.X% fiscal in Accessory quarter. third the about approximately sales. to X%, This each prior sales the X% the results basis. quarter categories and Now to up on were These net for fiscal of a for against turning quarter and up approximately XX.X%. for of sales year respectively third were compares

combined points compares quarter accounted about the XX%. approximately Average the third for to for tops and average X.X%. This approximately accessory XX.X% each and XXXX. for quarter, accounted sales XX.X% for were basis price on price points fiscal were and down Again, a approximately X% of XX% footwear down in denim of

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

your And that, welcome with questions. we

Operator

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

Tiffany Kanaga

margin improvement dig still drivers to Hi. merchandise coming behind down. average quarter Would the the questions. despite key taking performance Thanks our the into margin gross you this break price down for points

expected. And have further in mix increase? how you. role leverage did For how a better Can play a if margin think Thank bit Additionally, we you than in have could point improvements your comment on example, with your gross margin evolved? be might leverage you the ahead?

Dennis Nelson

just you. margin inventory was improvement Good of reduced And ladies and I morning, held Tiffany. men's very area. especially Thank management markdowns, our our the the nicely. by in up believe

the and the response guests from So inventory the regular and price at team management our were product. the on we sell-through with and pleased

managing stores. was a payrolls our took leverage, of and expense in the to On team to approach that the effective management in payroll our different sales reduce stores some sales the

on benefit So that the was leverage. there a

Tom Heacock

certain to And much and Tiffany that side, in historically there. mid We today. gross margin that’s a rent down closer worked markets single-digit and brought the number was hard on really lower

leverage So margin it's side. under X% just the on gross get closer or to to probably

Tiffany Kanaga

Is season? is sales approaching inventory on quality versus inventory holiday a if that elaborate over the the including between And And levels than Thanksgiving X%. usual, you headed how Black down Okay. Would and holiday the feel up follow-up window with you X.X% into Christmas? front Friday, you’re question, your also, on like of overall the it? where and shorter given differently the you any

Dennis Nelson

of on consistent with we’re so We arrivals, new our shape years the no are previous. to Markdowns in we’ve excited to guest -- to and our approach are the the our good holiday I and product is reduced different that mean is a inventory. lot present season

Tiffany Kanaga

Thank you very Right. much.

Dennis Nelson

Thank you.

Operator

will next And & Marotta King Please to ahead. with we go Associates. Steve go CL

Steve Marotta

everybody. was I fast the third I price missed that. women's average in morning, you but Good Can that. I as can, I missed reduction review please denim as writing quarter?

Dennis Nelson

Yes, Steve.

have Kelli to We respond will that.

Kelli Molczyk

decrease the from about Sorry XX.XX to was It price XX. that. -- actually

Dennis Nelson

the [indiscernible] denim. he think I

Kelli Molczyk

Oh quarter that what in year that. you’re $XX.XX. price Is to point, Denim sorry. last wanting? third the of $XX.X

Steve Marotta

prices anything and Yes. previous prices horizon abating so be you denim been seems have I differentials a basis year-over-year could comp, that about somewhat. the a price much to there headed headwind on points think where in why? those you average -- Is and to where denim know And -- or on that talk significant are

Dennis Nelson

Steve, Dennis. this is

to got as think will point price but with the denim higher have the with inventory third pretty probably some same be be still points the denim, and nice expect a last quarter. we points I before quarter. the price consistent price volume sell those of but We consistent at not

Steve Marotta

us omni-channel in are you you where remind can And endeavors?

Dennis Nelson

to consistently on of will improving uses we new the Well, to amount -- started the are we this been brought earlier on beneficial which of senior well early opportunities test in from has be a which store beneficial as on that director there. marketing stores and updated working just fall guest, We've as think certain shipped year. in we our CRM we this

So have we we think smaller good that we be think several for projects will us.

Steve Marotta

there quarter a can third your in you traffic you talk on guidance trends standpoint can about a obviously? and that specifically much lastly, bit without you saw And stabilization the obviously commenting did comment from and traffic future expect ideas about little how trends you

Dennis Nelson

Yes.

done favorite of a such. think I outfits So, for as a location we denims this good stores in destination and and up our have studying job finding our

And in the job. know, in if We’ve so contact guests list merchandise. the to I I to was invite quarter are traffic teams our teams the favorite much think them but a product the -- lead don't good on what added on past can a their different, doing

So we benefited that. from

So for well. working our guests that's and on that from felt it's teams mouth word also is always -- best just a advertisement the and that with the loyal stores working in we’ve our of our

Steve Marotta

Helpful. Thank you.

Dennis Nelson

Thank you.

Operator

Capital. Please And go [Operator ahead. Instructions] next with David Berman with Berman

David Berman

guys. Hi,

Dennis Nelson

David. morning, Good

David Berman

turns. inventory ratios about really the good This than grown your It's or eight inventories good back. where It's sales quarter in your you’ve you inventory have had looking nine -- faster that's interesting, is to to sales first and always and turns, your see good. at

Dennis Nelson

you. Thank

David Berman

what you in the it disappointed more have you you Have past. obviously just change? on What how been of the did focused -- sort -- line? -- have I inventories always you you Was must know top because

Dennis Nelson

and promoted to think building top they think Then added given of men's styles are expanded line, a leaders guest. our think quarters product are think the a denim job lot store on I very continues men's the teams, are our I a stores of think the gains I Bob store doing invest we’ve denim, the and I the But about we as brands. our the great kind in in -- business merchandise, I within. the continue and up in-house continually And eight Well, product fits and the in men's that. -- mentioned we new excited who curvy have the gal's of where people from good

and -- of together things. combination quarter. came to The working a last this a teams good it teams are just hard the So improve teams in and merchandise store just

David Berman

mean, you goal do I continue keep So to is low? think are try the you that keep that you and to focus? a like -- will now inventories like that

Dennis Nelson

don’t think have of I goals changed. any Well, our

do of made such. there, keep prices some before higher and the But sales think there's to we going used more for opportunities and always after in inventories of Sometimes was that I part product denim we’ve our worked line much hard difference. to with those kind a

we’ve catching we’re think had with go I denim kind So up many a to high years just against of how prices.

David Berman

Right.

Okay. Well, good.

of more see Thank Congratulations. Let's this. you.

Dennis Nelson

Nice to hear from you again.

David Berman

Thank you, Dennis.

Dennis Nelson

Yes.

Operator

go have we Please Richard Longport from question And next a Dearnley with Partners. ahead.

Richard Dearnley

morning. base, so somewhat relatively to don't it company. the initiative more the is new, X%. be online Good the seem relatively The than gains base your be increase the I like store is understand would if And would new, But so would … I’m dramatic new modest.

Dennis Nelson

Yes.

company XX% had had such. e-comm and we I of it So many and growth gain this our quarter, and believe we substantial was that leveled this online sales little a us. out years a for we continue gain. promotional And the then quarter, have for less might so bit And is at probably believe goods to I factored had work in also, we a which that high solid

Richard Dearnley

And XX the though Okay. net about looking dividend. at or looks then year years it policy is corporate payout the for so, as the income last in to

does that So policy or is just happened? that a

Dennis Nelson

reviews Board the at its those And look making in December, history Well, don't past the dividends. think we I decisions. thoughts been each it's the usually -- in past year on any

Richard Dearnley

Okay. Thank you.

Dennis Nelson

Yes.

Operator

on we no questions call, queue. further presenters the to And have in the

Dennis Nelson

participation, holiday week. a for call today. next week wrap can If wish questions, wonderful thank we and there's everybody joining us up We their no everybody and additional the

Operator

for today. Thank you conclude Ladies does and your participation. conference call gentleman, for your that

You disconnect. now may

The Buckle, Inc. (BKE) 22 Nov 192019 Q3 Earnings call transcript