The Buckle Inc.

 

The Buckle is a specialty apparel retailer that was a growth darling up to 2013, growing revenues to 1.1bn which stagnated to 2016 and then declined to 885m by FY19. They started to see modest growth prior to the pandemic which started to accelerate after the initial pandemic hit with revenue hitting a record 1.3bn in FY23. They subsequently have been experiencing modest digestion in FY24 (which ended January 2024) with still solid 20% operating margins.  The company has a solid net-cash balance sheet, an almost 4% dividend in addition to a history of regular annual special dividends in January. The Chairman (who was 81 in 2023) owns more than 30% of the stock and the company has largely been orphaned by the sell-side.

 

Ests:

                        3Q25   4Q25   FY25    FY26

Revs                 281.7   366.8   1.2bn   1.25bn

EPS                  0.90     1.33     3.70     3.95

 

Special dividends/sh Jan 2024 2.50, Jan 2023 2.65, Jan 2022 5.65, Jan 2021 2.00,

 

P=47.66, Cash/sh=7.01, div=1.40, yield=2.9%, additional NWC per share 1.17, very solid balance sheet, TTM EPS=3.93, P/E=12X, FY26 P/E=12X, FY25 and FY26 est probably too low.

 

3Q25   .88 vs 1.04, est .90 up from .87

  • Nov 22, 2024, P=47.66, TTM EPS=3.93, P/E=12X, FY26 P/E=12X

  • Revs -3.2% to 293.6m (est 281.7m), GM 47.7% vs 48.5%, OM 18.6% vs 21.1%

  • Comps -0.7%, Online +1.1% to 46.6m, UPTs -1%, AUR +1.5%?

  • Private label 48.5% vs 47%

  • Merch margins improved approx. 55bps, partly offsetting increased occupancy and distribution

  • Women’s denim +9%, private label denim up mid-teens, men’s denim -1% but private label denim up LSD

  • Valuation looks less unreasonably low but still about 10X on EV basis, div yield also looking more normal but doesn’t factor the annual special dividend, looking closer to a turning point in operations.

2Q25   .78 vs .92, est .79

  • Aug 23, 2024, P=41.67, TTM EPS=4.09, P/E=10X, FY26 P/E=11X

  • Revs -3.4% to 282.4m (est 276.7m), GM 46.9% vs 47.3%, OM 17.1% vs 19.4%

  • Comps -6.6%, Online -15.2% to 37m, UPT -1.5%, AUR +2%, avg transaction value +0.5%

  • July sales were +3.8%, although too early to indicate a trend, sales started declining in Feb 2023 and TTM revs are 9% below the peak.

  • Private label 43% vs 41%

  • Opened 2, remodeled 7 including 1 relocation, closed 2, for remainder of year plan on 5 new, 6 remodels. Ended 2Q with 440 stores.

  • Making improvements to website functionality to improve online experience, saw improved conversion and other metrics, next step to focus on traffic

1Q25   .69 vs .86 est .74 down from .77

  • May 24, 2024, P=36.47, TTM EPS=4.22, P/E=8.6, 7X ex cash

  • Revs -7.2% to 262.5m, GM 46% vs 47.2%, OM 16.2% vs 19%

  • Vs 1Q20 201m, GM 38.1%, OM 9.3%, EPS .31

  • Comps -9%, Online -13.4% to 44m, UPT -5.5%, AUR +6.5%, avg transaction value +1%

  • Completed 5 remodels 4 of which were relocations to new outdoor shopping centres, closed 4. For remainder of the year, expect opening 7 new stores and 14 remodels

4Q24 1.50 vs 1.76, est 1.44, FY24 EPS=4.40 vs 5.13

  • Mar 15, 2024, P=37.66, TTM EPS=4.40, P/E=8.6X, 7X ex cash

  • Revs -4.8% to 382.4m (est 383.6m), GM 52.4% vs 53%, OM 25.2% vs 27.4%

  • Comps -9.6%, Online -12.4% to 65.5m (17% of total)

  • Women comps -12.5%, were 41% of sales, Men’s comps -5.5%, avg price point increased for both, accessories comps -7.5%, footwear -41% (6% of sales), Buckle Black label was +18.5% and core BKE line performed better than average, Private label 50% vs 48%

  • Revs slightly up vs 2 years ago but Eps 6% lower but still well above 3 yrs ago.

  • FY24 did 11 relocations to outdoor shopping malls (42 over past 3 years), bigger stores and better locations seeing improved sales. Ended FY24 with 444 stores vs 441.

  • Feb trends are weaker, women’s tops came in a bit later, also lower traffic

3Q23 1.04 vs 1.24 vs 1.26 vs 0.86

  • TTM EPS=4.11

  • Revs -8.7% to 303.5m , GM 48.5% vs 49.8%, OM 21% vs 23.9%