BKE - Earnings call transcript Q1 2021

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Operator

Ladies and gentlemen, good morning. Thank you for standing by and welcome to the Buckle’s 2021 First Quarter Earnings Release. 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; Brady Fritz, General Counsel and Corporate Secretary.

As they review the operating results for the first quarter which ended May 1st, they would like to reiterate their policy of not giving future sales or earnings guidance and have the following Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. All forward-looking statements made by the company involve material risks and uncertainties and are subject to change based on factors which may be beyond the company’s control. performance or results statements. implied future from differ company’s expressed those in the and may financial materially Accordingly, such forward-looking factors the not the are include, those Such in described limited company’s and Securities to with Exchange Commission. filings but publicly results undertake statements, experience therein realized. not expressed changes or does future revise clear it if or be to implied company any update The that or make not forward-looking even any projected will

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

Tom Heacock

Good for morning and thanks us this morning. joining

quarter of million. of in million our partially the XXX.X% a on first occupancy general, net compensation point XX.X% strong basis shipping in about incentive quarter that quarter $XX.X XXXX the $XX.X diluted first retail X.X%, coupled sales XXXX increase for to XX $X.XX along first XX.X% with was e-commerce of net SG&A gross first of an several to net sales buying which Our first margin improvement $X.XX XX.X% first in to administrative $XX.X basis release the were increased as basis $XXX.X to of of year increase costs, income fiscal compared income unit result approximately points increase fiscal a $XX.X XXXX. increased quarter UPTs XXXX, in and million leverage year for quarter to compared quarter a and savings the XX XXX the fiscal quarter diluted the XXXX. merchandise in XXXX per and a XXXX point average a point of point is of XXX XXXX. result The equity a with basis offset XXX compared net the the quarter significantly leverage improvement the May XXX a decreased sales continued were $XX.X a increase a in approximately due compares XX-week quarter increase reduction X.X%. was on increased share per XXXX, Again Online the expenses. quarter sales $X.XX ended expenses. Xnd, million first XXXX increase basis compared transaction result expenses basis of or an in $XXX.X to quarter XX.X% increase marketing-related point sales for compensation point a basis XX May and margins, and prior the net in first quarter. Gross Xst, reduction the in for diluted by accruals, prior to across XXXX. XX-week basis for margin quarter and XX-week costs quarter basis, basis a for to in performance of and the from $XX.X or to the XXXX XXXX These for point share basis in the Selling, first compared first performance, reported million the net XX-week the to store to related million XX.X% other and of increased The compared quarter of XX.X% share million Compared May on labor-related the the XX loss for of sales of quarter press the of for travel value XXXX million were of and strong first expense, million, was the per XXX% for XXst, a average or from for of distribution XX.X% ended Net of first X.X%, to expenses $XXX.X of costs the XX% compared sales of first quarter.

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

years, net was XXXX compared for to rate million of the for $XX.X income XX.X% income million million of a bringing tax for quarter three XXXX, to net effective quarter each first of net of and Our $XX.X XXXX. $XX.X the for first loss

a XXXX, million $XXX.X and May of total investment of and Xnd, net Xst, May release the million, the press and fixed with from as $XX $XXX million in included which We which $XXX.X as inventory Xth, million. of down of quarter included Our was May also XXXX, balance following; cash inventory of accumulated sheet $XXX.X depreciation. million of of ended as XXXX assets

for expense were expenditures million and capital was the capital remodels, for spending the distribution at store $X.X follows; down $X.X quarter headquarters new store is construction, technology for $X.X million and and depreciation spending corporate capital Year-to-date and million Our center. million. as $X.X broken upgrades

in the we five shopping store. one and closed outdoor of we quarter, the were full During new remodels, completed also which all centers relocations

the remodel of expect on opening stores store on planned And now to Kelli XX still with new in at includes the in of one additional compared six be use IT we this states the both states range the which also over end store later President completing ended million XXXX. our Vice Women's fiscal $XX current to full XXX closure capital first and turn I'll expenditures For of to have XXX in and plans, the to month. of we projects, $XX one year, quarter stores million, projects store it planned store plan Molczyk, Merchandising. XX Based quarter investments. retail Buckle

Kelli Molczyk

up categories women's I prior for quarter would the against in the all approximately our quarter. Women's fiscal for be by were Tom. first quarter year, sales of will the merchandise start to XX.X% sales highlighting comparisons the due merchandise quarter that against of first Thanks Please of the XXXX. the XXXX. like note the disruption to fiscal performance

results, was pleased For our a fit of the were wide with Women's from stretch QX for from first XXXX. Denim the fabrics, to business the traditional in were $XX.XX teammates. of first of quarter $XX.XX to price $XX approximately quarter XXXX and super fiscal quarter from points denim points of XX% guests In nicely compared quarter be of $XX.XX first our is and price with and support to in quarter performed in the openings skinny fashion; XXXX. sales; variety to $XX.XX for from quarter, in clean of resonating rigid; the our $XX.XX and continue bottom reviewing our XXXX compared average we Overall quarter first in to product flare. the women's finishes, to to how busted; continues the

and Our to denim and alternatives perform continue full length shorts crops also well.

As with we as home the casual mix, forward. out a all our fashions our step to foot more look gradually and best footwear, we graphic uptick of living, out accessories to out to nice their tees, fashion guests transition saw fashion and

fit in Our kind one categories for all a creating private to footprint label our product expand guests. continues of

regular representing smaller on our drive our positive markdown Our price of product have with margins. inventory the regular percentage impact business a price sales sales a merchandise continues with Exclusive mix total. to had more combined

we omni-channel enhancements in the gains addition, for to In online our quarter. the nice business with experience, saw our

conjunction from available With in our early once the with working flow of goods a our as continue flow shipments fill spring our worked for product through by inventory, where the hard Those as goods planned plan, set to with in-season product extremely beating the stores up in applicable. new to sales guests. steady chasing in partners at fresh well performance our gaps team quarter throughout any valued

We season. of prepare turn newness Carlberg, healthy continue performance of the plan to over to to our categories. Men's to Vice And I'll Bob that quarter Men's the second Merchandise flow stores it Merchandising the a with back-to-school Senior President discuss for for through of

Bob Carlberg

fiscal comparison for first Thank up quarter XXXX. Men's sales in you, fiscal Kelli. XX.X% the Merchandise quarter to the of were

business growth their performance and the quickly $XX.XX XXXX position led of largest been our hats, fiscal in were and total denim a QX an incredible compared receipts The $XX.XX were departments accessories, to provided fragrance all XXXX. was which Oakley are in QX where compared Rock the The and for Revival strength assortment. guests way points quarter denim $XX.XX our footwear of points great the Salvage, to quarter, the our BKE with given QX, and throughout XXXX. XX% $XX.XX QX with both way. had Overall back to and up the the into going XXXX. team was particular of sales. in quarter Denim approximately board Buckle. in first and the youth to net the quarter a dollars to of for new XXXX. quarter of XXXX percentage gains. $XX.XX has amazing percent Men's showing response compared price $XX.XX the brands growth QX In exclusive replenish to Street and was in largest continue in quarter also For to the of strong QX the across first as all inventory sunglasses, quarter were price Average our working the

to get brands Our working incredible product with just did growth. our an sustain incredible team to job of an of and quarter sources enough

is inventory markdown lower, us risk to while even to the of manage add level giving low usual inventory. we more Our ability work

sources in line delivered faster competitors. product strong made the than us put brand partnerships our with and first get Our to

we two able a to of were many product that product percentage quarter, weeks the late. plus with there in During been time, the chain being deliver have small supply overall, most challenges only on

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

represented we For label welcome of XX% your quarter, And private Thank business you. questions. sales. approximately our with the that,

Operator

question Please go line Associates. C.L. & the [Operator our come will of from ahead, Instructions] King first And representing Marotta sir. Steve

Steve Marotta

I bit about everybody. morning, supply Good speak just little a chain. to like the

weeks behind. little point bit the you was two beginning about You think at And now? year running some Can talk the equilibrium? mentioned where where it is this places quarter? it's of when about the we'll maybe reach a it Where of you

Dennis Nelson

Good men's Thank you want the Bob, morning, product Steve. do the question. first? address for to you

Bob Carlberg

on of time. things quicker already kind Sure, that we've than others the I order that would kind into knew had -- changes earlier of and account shipping fact to we in ahead there be think moved some we take about of

So, building to don't going inventory going a have we be in it's should impact months. overall, next the our forward and couple material of on I think deliveries

Dennis Nelson

you add? do have Kelli, anything to

Kelli Molczyk

overall, Bob move I But the we forward. quarter. first so fairly very impact well echo Few they we what we'll to said, partners fared I from fairly mean, continue little would we feel ran some as do into had -- challenges. and No.

Dennis Nelson

I that-- Steve, add might

Steve Marotta

helpful. That’s

Dennis Nelson

history for six might April, that now have. and March been And product to gains I all the us huge news you a it's very strong with be as fourth past as bringing fresh. good product we is months have develop sales in well the know problem to on. in add the continues we're And to good good quarter the

Steve Marotta

in just moment But quarter where retail want bricks-and-mortar on more you latest little you to as Are could at reopening? about form, That's you there. as is dollar basis, take Or in helpful. or its talk is it April whole in as the want know assuming about holding digital if and up time? can, bit own? takes a I'm current online is you Can the its a proxy talk this to strength puts don't seeing you is Maybe whether take you penetration, maybe your months. as I

Dennis Nelson

correct? Yes, the I Tom is up believe that was was brick-and-mortar April, XX%,

Tom Heacock

stores. We've for I then part think I growth that's story. the and the quarter, and to excited be the seen in mean the guests whole both in really, online seeing really back stores. of

incredible was coupled growth. whole over XX%, were and the in-store quarter, up For which with sales our online

our We first periods to were we of growth were the But quarter, continue have online to stores and for difficult sales level whole for closed. with certainly comfortable sales where year I the mean, some that's and the a for a comparisons XX% grow. to ago about want online feel

I or and in-store guests seeing omni-channel guests along new and that a guests. online and we're think are lot obviously, our guests guests shopping growth is best seeing nice growth both -- reactivated of with and are there

lot with things of online and our a good business in-store. So,

Steve Marotta

helpful. That's you. Thank very

Operator

[Operator Instructions] anybody up Speakers, I'm else not now. getting right queuing

Dennis Nelson

If give and the a hope you questions, very much. everyone up and we everyone it there's quickly no day Thank and can enjoys wrap back some wonderful time has today weekend.

Operator

you more one to We end. did up the Would take at like queue that? get person to right

Dennis Nelson

Sure.

Operator

Mr. please ahead, Wang, sir. Okay. go

Unidentified Analyst

question. my All right. Good taking morning. Thanks for

way checks, too, the already measure wondering March stimulus you mentioned big and how and be to guys. going holiday thinking checks, if you compared that a continuing do or more talked that thoughts the impact upwards season to some assuming importantly, are you have to big you April are to from from And stimulus half think Thank want more into impact of going What any about you. the just do is second of you trend, we planning back-to-school, XXXX? sales many sales. you drive to they year, in Just are uptrend? the So, of how about appear, to getting there's going give not

Dennis Nelson

since the the in company, good of very teams. quarter a predict future, things our trend and I before, XXXX on of even fourth to we believe the had we -- but try won't the lot going -- our

and great merchandising teams Our the have had product response from guests.

been excellent training teams sales to have experience. Our

improve; continues shopping to everyone. Our team the IT has satisfying marketing the online for more made even

last future. just we're the looking year the a what excited real half accomplished on so forward over and And and everyone's to

Unidentified Analyst

Thank you. All right.

Dennis Nelson

you. Thank

Operator

ahead, line will Our of Kavanaugh. Mr. next question come go Kavanaugh Palisade representing Kyle from Capital. Please

Kyle Kavanaugh

last today. call Good benefits along question are Thanks -- the everybody. of about we're for different, and seeing morning you're year, clearly, on is the that a that. the environment the with I all side had coming still other

you're merchandising of benefits think was that's margins referenced you full some last of benefit. through you real the some getting your referenced it's time, And or also, and I on and coming And estate a price margin whether call then on selling. not your

estate to real You negotiate were your able some of dynamics as well.

you forward, know company but want I bit. I going sustainable, like now be as we normalize you're some going wondering about the curious, of margins back can curious expand are of there forward. trends into sustain to those just I'm forecast So, some and right of a XXXX. second benefits I'm productivity don't Is sales these given this the the ability receiving the you half in even upon of them was thoughts year if or little going to to

Dennis Nelson

at thank that and and to I'm both the Kyle. Bob merchandise looking end Kelli low. quarter, think inventory were I -- of markdown you question, terms hard and for in margins that's the mean, we're called of particularly mean, I say I the at

merchandise we're on perspective, can high difficult we at maintained always So, and project. margins build improvements seeking looking the those. sourcing answer continue but do that's last, I several And for to in really margin a to from mean, the level years, been and merchandise we've what a

benefit. structure, cost the we're talked rest lot we rent. looking In of of the terms We a areas where of got at about

in into centers, rent for they're of reduced rents. worked stores then to the out have We're and the outdoor and We will of those presentation also positive that of a over in into looking those the of benefit rents the of opportunities several last reduce to that years; thing, terms out future stores product lifestyle for power underperforming continue that's results the both been stores. move and centers, malls seeing

So, year in with the three I last that I had of five we'll first think forward. remodels those and quarter, going strategy continue

I level a at big really far I to to level improvement first labor store we've it continue that's the and there, was and It of several staffed certainly going the piece we'll business we for quarter. holiday. hold plan, big to we close don't nice think in exceeding back had is weren't mean, other been The years, sales focus was did that see

see hiring smart I can running we'll on teams hopefully as take and hard some so working been But to on fast store And our that. don't and level -- leverage be think care have and we'll and expect to the focus leverage most to see as guests. same that but payroll, really of continue we'd continue we certainly of

Kyle Kavanaugh

inline gave -- -- -- questions. quarter? traffic I didn't more give levels Are sales? could the give stores? comparable mean, couple traffic a like able the give you store -- you you in for I traffic to you in your the know actually, same Just comparison

Dennis Nelson

don't We counters traffic store. in have our

difficult -- don't and specific share have to it's stores. So, we metrics traffic for our

Kyle Kavanaugh

just your with enough -- Or curious; want -- forecast, what have just has you supply in any is you are to the of vendors, go sales merchandise. chain? what said I'm to of is it they low then like been of is And it anything is kind -- because early customer is now But, kind it -- -- where -- just and data around or kind right that. everything so actually trends well, a that I'm new of just to you're just exists everything some fashion very the inventories is now? dynamics selling Kind you

Dennis Nelson

as well And denim things the silhouettes. side, it's men's in area her received. That's been business the well. done working it. in selection The and staff lot our I business; I there's of The behind different great. been mean, product-focused. fun, denim have their pretty short of the stores a of has has excellent. footwear very mentioned such variety good our with lot getting tops just Kelli the going job has shorts in has well in exciting gal's both Denim well-received have think trend the presentation, much a as been as knit has been been categories on been well, very and good on so team very as and very been

the helping But production be we certain catch good continue have challenges overall, as Our through shape the vendors, think we us naturally up. goes. be in for most season. we'll part, will the as They

Kyle Kavanaugh

well on And staff know, or the environment? increase just to need enough within last the yourself, as throughout today's as would do you question one And or staffed we you for labor Okay. move stores characterize year, side, you both? then online

Dennis Nelson

in might they're of we stores, of say staffing it's certain I'd the a great looking needs. the see we're to can be markets company others. more a problem. our majority don't got Certainly than to as competitive, the we be that on there back the year, and challenge and pretty environment add people and in We shape always half good so that exciting a huge working as go

Kyle Kavanaugh

all? or I you paying you wage minimum Can labor your have moved ask scales at

Dennis Nelson

this then We've raised new whichever their teammates base minimum we is some be its would and at that our be wage and higher so commission, the plus levels. of have better -- -- experienced commission base guaranteed or staff then more

Kyle Kavanaugh

so everybody. you much, Thank Okay. it. Appreciate

Dennis Nelson

you. Thank Yes.

Operator

who investor. now have go Hillenbrand do -- follow-up from or Please from we private Mr. a have [ph] a we And question ahead. is a Mr.

Your line Mr. open, is Hillenbrand.

Unidentified Analyst

you. Thank

far your just And get your have the margins net like been online on information to Just and that your as goes? compared sales growth to are what sales some online in-store. how as the of trends

Tom Heacock

what that online. inventory omni product, terms been stock of the a exposing that and and again, several we've have we over of years of selection added in growth to big of online the in-store comparable. reducing goods expanding merchandise sale or is driver. better of be of outs a our story product guests all available margins capabilities a the big of has pretty seen, shipped the the been the from they're difference part margins, and we've There's lot big part so and last giving inventory, our store and for And the growth not that's in a the have in online, terms we that online really store In of a

Unidentified Analyst

you. Okay. Thank

Tom Heacock

Does question? answer your that

Unidentified Analyst

It does, yes.

Dennis Nelson

Operator, have do more we questions?

Operator

other no participants gentlemen. at there's up And this queued time,

Dennis Nelson

you. Thank

Operator

Would like the you to conclude call?

Dennis Nelson

Now, last we but participating once you everybody questions, day. thank we'll have any up more wrap and wonderful minute get and a it for

Operator

Teleconference. conclude conference does using Ladies today. and gentlemen, AT&T your for this for Thank you your the Executive participation

You now disconnect. may

The Buckle, Inc. (BKE) 21 May 212021 Q1 Earnings call transcript