BKE - Earnings call transcript Q4 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Buckle’s Fourth Quarter Earnings Release. At this time, all participants are in a listen-only mode. Laer, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] 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; Adam Akerson, Vice President of Finance and Corporate Controller; and Brady Fritz, Senior Vice President, General Counsel and Corporate Secretary.

As they review the operating results for the fourth quarter, which ended January 29, 2022, they would like to reiterate their policy of not giving future sales or earnings guidance, and have the following safe harbor statement. subject the statements Litigation involves beyond made and and under XXXX Act material the statement on uncertainties forward-looking based All by are company’s harbor control. Private may Reform Securities of risks factors, Safe which change be to the Company Accordingly, future financial performance results from differ materially statements. the expressed such or forward-looking company’s those implied and may in any are the and but include, not company’s Exchange with factors those in limited Such described Securities filings the Commission. to, undertake update that realized. changes implied or not results forward-looking to even if future not any or does or statements make company The be publicly therein will expressed any revise experience clear it projected

the or relied upon or With the expressed call without Additionally, dissemination its that, be authorize of recordings or ahead, should consent. turn to not conference go reproduction of Nelson. audio our unauthorized Any be of calls does written transcripts may inaccurate. Please I’ll the host, over sir. Dennis reproductions company the not as the recordings company’s information the conference quarterly

Dennis Nelson

and thank you morning, joining for this. all Good

also continued disruptions our vendors. have the not of for years private ongoing in truly label success I’m congratulating the outstanding like could on over tireless to over would X,XXX positioned bedrock and Tom, past I without teammates by is are the year [ph] year. incredible efforts and start grit determination turning the come. it [we year confident our and despite at Buckle, Before for thanking been a we to and their such The play] to branded the nearly support to possible This them used

new trust high-quality your continued CFO, over numerous it partnerships and possible. We Tom guests, our To past loyalty. to our enjoyable year. all also despite now over are guests product want continued I I will turn to thank the thank challenges. you sincerely grateful the as we welcomed our our we deliver provide cherish experience every guests opportunity to for and have We Heacock. most the serve shopping for

Tom Heacock

for us and morning. morning, with thanks this Good being

for reported prior XX, a of billion sales store per Our XX.X% XX, comparison million, a the $XX.X to year. share January fiscal $XXX.X fourth March up which income on basis, that $X.XX the Net was to XX.X% for per for XX-week on $XX.X income XX.X% fiscal $XXX.X increase fourth share the of ended net ended prior XX% million the the the XX-week sales the a XX-week $XXX.X Comparable the $X.XX share which increased XX, to year XX-week million. increased the were basis compared compared compared comparison in share prior same for XX-week increased sales quarter online XX.X% and year to million, XXXX. fourth in Net net which store of the XX-week year income XX.X% ended XX-week prior to year XXXX. XXXX for compares for year or online sales diluted sales period million $X.XX to quarter. year press increased same a $X.XXX And for XX-week for the on for XX-week ended million. million net year sales $XXX.X XXXX, Comparable the January year. in diluted sales in prior per fiscal period was to year quarter the of to for in net XX, on $X.XX January XX, diluted $XXX.X, or or fiscal net income release prior year million, quarter, basis basis or quarter, January the Net per diluted $XXX.X to fourth to year XXXX sales $XX.X XX-weeks the

approximately the decreased the UPTs increased quarter, average approximately increased unit For X.X%. X.X%, average retail transaction the approximately value and X%,

to increase and approximately up of year, increased XXX UPTs from transaction approximately of XX.X% unit basis margin quarter compared net in the across fiscal sales, basis XX the to were fourth occupancy online the year XX fourth points average the year marketing result as just leverage costs. margin for XX.X% year The merchandise partially XX.X%, increases gross of with XXX quarter compared result XXXX was and XXXX. investments. margin XX.X% expenses full and expense sales XX.X% the gross merchandise the point the quarter. for retail buying XX.X% X%, SG&A Full decreased For categories, in value XX.X% fiscal points XXXX. for to fourth for leverage of average quarter the was offset compared freight XXXX. of XX.X% in sales was strong Gross administrative the quarter was basis leverage distribution margins, point and basis basis in increased improvement of was Selling, for X%, The Full and quarter gross slightly. coupled distribution result costs a several the with XXX buying of points in for increase the performance improvement a a costs general margin SG&A occupancy margin of full by of

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

net income the was was expense XX.X% of for a For fourth in Income XXXX. bringing compared $XX.X XX.X% the net quarter compared as compared for to $XX.X fourth for XX.X% million tax year, quarter last our margin full to year, fourth the income to for to pre-tax percentage XXXX operating XX.X% XXXX. quarter million

net XXXX, was net for fiscal $XXX.X XX.X% million to million income year, fiscal income bringing XXXX $XXX.X to income, to for fiscal compared compared XXXX. full in XX.X% the expense pre-tax of For tax

assets, with included depreciation. inventory was during includes in up ended year. of net $XXX.X sheet a million year investments XX, inventory balance payment January of and January total press which XXXX release also as We fixed of which X% cash dividends XXXX, accumulated $XXX.X of the Our and following: XX, $XXX.X million the from of approximately after which million, of in as million was $XXX.X million, of $XXX.X the

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

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

year-to-date During and four which shopping the one full brings quarter, of full to store store. store, new XX a totals This we closed remodels remodels, four relocations outdoor completed five and were our centers new closures. and one

first XXXX. Additionally, fiscal full of we store closed following day the one

to Based Buckle on current and remodel five plans, of projects. on For with expenditures XX full million now, plan over fiscal retail quarter we Akerson, with XXXX, line Vice currently we I’ll states ended XX in opening XX stores it XXXX. our be $XXX to store compared the our end capital stores million. stores new XX of range turn expect in $XX $XX of the full XXX states completing And at in to quarter the fourth of President the Adam Finance. to

Adam Akerson

you, sales Tom. up Merchandise the prior approximately fiscal Women’s the Thank for XX.X% year fiscal were against quarter. quarter

to the the points fiscal increased about the price were approximately points business XX.X% decreased $XX.XX. $XX.XX fourth fiscal while our $XX.XX of in in X% quarter, overall quarter with fourth from $XX.XX consistent stayed sales, Women’s to year. denim of XXXX prior women’s quarter the price XXXX, was Average of from For average

to the quarter XXXX quarter, quarter up prior sales of fourth years. year against in side, decreased representing $XX.XX sales the the quarter XXXX. price points XX.X% Average the On of were for fiscal fiscal of approximately for fourth XX% total Men’s both the merchandise $XX.XX denim fiscal from in fiscal

men’s price average to increased the $XX.XX. points overall $XX.XX from For quarter, slightly

quarter were and compares XXXX. sales the approximate quarter each sales the and point average quarter Average respectively, result our negatively XX% prior the These by the fourth sales to approximately year missed categories denim Vietnam. and a brands and points up combined as up about footwear a accessory XX.X% for our were were approximately quarter for fourth fiscal During for basis, of in receipts were businesses net significantly due women’s X% in price price points points XX%, impacted to fiscal X.X%. XX.X% inventory shutdowns accessory about their limited in of X.X% higher accounted and price quarter, nationwide price fiscal two in the X%. footwear men’s On were up for

denim quarter, and XX% approximately to for XX.X% for in compares XX.X% and which XX.X%, the approximately of fourth accounted For for quarter sales the tops XXXX. each accounted fiscal of

label During business XX% of private to the compared quarter, our in sales XXXX. total fourth of the to grew quarter XX%

our quarter. year, due continue prime to label for lag able XX.X% still we the our sales limited versus to full for private approximately see For resulting we Overall, we in fiscal of outstanding Despite deliveries about trucking were guests, in deliver newness availability. challenges, or our amount XXXX. some accounted congestion for and XX.X% performance business delays, the to felt in of COVID good the our total these

Our work provide with buying adjust and teams vendor delivery diligently, strong continued both internally presentation. dates, to partners a online our and timelines to in-store and

proved Our to again inventory successful. approach channel agnostic

record on resulted every to low to markdowns. in in with of to strategy based continued nearly finish double-digit inventory have levels year This We allocate propensity greatest its the gains category sell. us enabled

trends, guest our product we encouraged file. strong to addition also In of the are growth by

grow year, to the month XX%. our active able over For by we XX- guests were

transactions quarter, that, guests, represented which approximately by increasing with all your our and XX% for during the guests, and to total highest-performing omni-channel proved welcome segment who quarter be Our approximately we most And in year. loyal the the fastest-growing XX.X% questions. of for resulted the

Operator

Capital. Instructions] first question [Operator of line ahead. Brotchie go the from comes with Brotchie Peter Our Please

Peter Brotchie

to Dennis, growth had spending didn’t to whether payments on great stimulus quarter Good your correlation that might but you a there you know the guidance, release be there. related and or not on some And morning, the of sustainability year. recent I Buckle’s thought give seems on you recent just and certainly rates. if and recent previous could add think congratulations premise. and calls I’m the high really don’t you on build rates growth sales was color February I asked a wondering

of XX% gift card related redemptions? excuse I’m how curious instance, much – For rate was February’s growth me, to

Dennis Nelson

last shut be morning, winter had store Well, there certainly such. wouldn’t the redemptions. from the very they was the Thank when closures, challenging South gift We’ve and in some card in February, year, Good power some February Peter. and off and Texas benefited throughout especially you.

But effort we our that. sales as from and improve our from benefit and just some categories. to of denim a total as relocations, our did well our sports continue to situations, from also teams, find as building we opportunities merchandise other business So great

was here, of pleased a February. So but things, with again, very I combination

Peter Brotchie

mitigate supply chain to able been chain issues. issues, are post-holiday create peers, Great. And Can the are you to on give then us those you in you do the many think easing airfreight operating what whether to of some and the on – spent or here problems your despite what have in seem heavily color your any that on supply QX regard? you thoughts year you not Or leverage coming

Dennis Nelson

there’s Right We to we as Well, delays still far and in continue little out now, on challenge. try plan be going advance the freights, seem better to did in shipping that to to very and enough air stuff. such. avoid things

but think so, improving, day a it’s And is every we new day.

the hoping for we’re best. So just

Peter Brotchie

And just circle on great. question. back Okay, that my to first

you said, profile guest or guest XX%. said was – on the think I that just the call up

new those color the guests the long-term repeat add in frequent going you sustainability, that to are of stores? so, and are continue but And are their guests, frequency, the you there? of think that store terms any Do to in Can those our visits. to visits terms

Dennis Nelson

our think just we team – sales just service our Well, are stores and terrific. our and is

as question? so that those more of we we’ll a guests. capture any details long-term lot do think have on you Adam, And

Adam Akerson

our I are expect as looked the some the file –as more performing. mean, what performing as loyal as are as far guests to or we are long-term of guest guests guests file, good at we new would

there’s So in guests. off significant recency those a frequency terms and not fall for of

Peter Brotchie

a bunch, All right. guys. Thanks

Dennis Nelson

thank Yep, you.

Operator

next Our go from Braatz question comes ahead. Please Kansas City Capital. from Jon

Jon Braatz

morning, everyone. Good

Dennis Nelson

Good Jon. morning,

Jon Braatz

are stores XXXX be – What I if marketplace? since correctly, store that on first you opening XXXX, the you support plan I’ve added seeing this additional stores new changes? some increase. would Dennis, changes you stores seen Have new or seeing new first I heard five in are heard in What you growth? this the think

Dennis Nelson

on smart as and think of ourselves, that some growing that found we be certain established think stores markets for cities had especially have would space markets additional relocation. growing there’s in for our outdoor and developed us, of are we ideal in we well and shopping centers that as some some as centers have we our power success Well, there’s

that. of advantage taking we’re So

those to of be there out. wait to that new might ones. a eventually have out store we’ll see – and be how five, is the that close we Now just That’ll close that plays a somewhat all couple

Jon Braatz

Do out continuing Do you think legs? some years? this see that that increase you has into the

Dennis Nelson

Well, might take grows, better. and for certain And looking other as our we to markets at at in we’re that there’s that, regions always as continue haven’t been stores we opportunities. another business certain do aggressive look

not So there. forecasting there’s but anything that possibility, we’re

Jon Braatz

assume I assume, but I lease are favorable Okay. the pretty – rates maybe stores? shouldn’t new on

Dennis Nelson

pretty we’re them, wouldn’t Yeah, Yeah. them. comfortable we with doing or be

Jon Braatz

Yeah.

Okay. Thank you. All right.

Dennis Nelson

Yep.

Operator

Our Deysher next question from comes go ahead. from John Please Pinnacle.

John Deysher

solid Good year. morning, everyone, a and congratulations on

Dennis Nelson

you. Thank

John Deysher

the point? what’s curious, higher issue supply resolved at that impacted status been priced that? product, to your of this that ability Just import has Vietnam Or the

Dennis Nelson

production that’s since – November, consistent that – shipping. has and more become Yeah

could products shorts delay certain production first, denim forward they as excited be have there go but deliver We’re still full of that that denim, and to get from be it length pretty up to the out trying on our product online. tried steady some we’re and expecting we back some some as on to catch to to

John Deysher

overall, couple behind of and out during that dramatically? other In have of has the shaken – up new last how And kind – vendors you words, the certain the changed years? has Okay. picked are left the ones? of base all vendors over you has Or broadly speaking, pandemic,

Dennis Nelson

always vendors say product great but our There’s especially and I’d And our very the also, in quality long-term branded business years relationships of developing that most a been been at we successful good from have there, majority price. changes there’s business, before. nice and are there’s vendors some always girl’s at with are on vendors top for are that the new consistent going changes. have

John Deysher

Thanks it. That’s it. much. Got Okay. very

Dennis Nelson

Okay. you. Thank

Operator

Taylor, Instructions] [Operator go next of Funds. Please question And from our comes line MAC the Jenifer ahead.

Jenifer Taylor

promotions it or like of that. terms and but talk quarter Nice nice changes did just questions answered, and in of bit you. Most about you morning, looks if to of wondering of management like. little just expansion, operational a thank good elaborate And year. want and have progression to you’d sort some some could on my that I Hi, and I’m way been natural about talk the individuals any

Dennis Nelson

team, actively and product Okay. Bob. more, development Buckle our Well, Cari with thank you, On in Jenifer. then least if the and not buying and Presidents, our have the years, Co-Vice both Morrow, at men’s been involved Jennifer with Crocker of XX working

Operator

I this hear connected, you you If muted Are no please there connected. then yourself. press you’re It can conference. speaking as on like one, the may back AT&T sign you. And longer believe We have other you whole so speaking. no any And operator back we still is zero. questions? with hear longer can looks the

are time, no more questions. Now there at this

Dennis Nelson

Thank apologize. you. I

apologize Our for phone currently so line in we here disruption. the dropped,

happy where more answer We’re your to we’re out. happy to I’m it not are follow-up any, question. we if Jenifer, answer But didn’t questions there sure or if cut

Operator

line now Jenifer’s Thank And can you. open. is I line. your Instructions] [Operator open

Jenifer Taylor

Hi, all.

But talking – and the I of just some promotion. about if you You did can of length think you we – were the drop commitment out.

know to leverage just basis? if more that of sounds had that to just of on cost should don’t to So continue like that evolution I the line sort occupancy if tag on seem it give trend a – on to an color those – other would on it a side. little as get the a it costs, just careers. back natural you you can getting only seems you of absolute bit mind, me don’t to I actually any that, But sort of there’s

Adam Akerson

Yeah.

down, landlords job, we’ve Brad rent. rent with I mean, working base reductions the seen abroad, side, in done we’ve and in nice Dennis On rents a

leverage where over So been ongoing the the couple of last years. years of several has for and most that’s been the that’s an effort

lot of percentage of that’s offset we’re rent. this some Now, year, a in obviously, paying situations,

the would So future. a continue but we’ve rent the business, seen some into of rents there those strong percentage with outside increases of otherwise rest

Jenifer Taylor

Okay. markets? trend really rents depend And down up or Or generally? your of is does of is the – percentage it sort on there

Adam Akerson

situation Each is different.

once above that based benchmark, those a above get So percentage and in as really we’re additional benchmarking markets. that it’s sales sales of some rent they store on paying

line driven top entirely it’s in So by stores. those

Jenifer Taylor

of locations necessarily of any kind of in outdoor Okay. versus space the the And not sort alignment mall. more There’s and…? environment not terms traditional

Dennis Nelson

in not The majority do of have part the lease. outdoor cases, a the of most centers, percentage rent

Jenifer Taylor

Okay.

Okay, great. Well, very you the nice that’s year. quarter, it Thank And for me. much. again, and

Dennis Nelson

Thank you much. very

Operator

no queue. [Operator at time, Instructions] other are this there And in questions

Dennis Nelson

apologize and for day. difficulties for everybody, and participating you, wish technical thank we you the a all Well, great

So you much. thank very

Operator

for Thank AT&T that gentlemen, today. using and Conferencing participation Ladies for our Service. for and you your conference concludes

disconnect. now You may

The Buckle, Inc. (BKE) 11 Mar 222021 Q4 Earnings call transcript