Buckle’s fourth quarter earnings beat expectations thanks to 2017 holiday shopping season

Buckle’s fourth quarter earnings beat expectations thanks to 2017 holiday shopping season
World-Herald News Service

Kearney-based Buckle Inc. reported a bright spot to investors Thursday: an improvement in the company’s bottom line, despite more falling sales in the fourth quarter.

The teen clothing retailer with stores in malls across the country has reported falling sales for nearly five years, sometimes with declines in the double digits. The chain has been hard hit by falling mall traffic, online shopping trends and low commodities prices, affecting many of the local economies where Buckle has stores.

Buckle reported net income in the fourth quarter of $42 million, or 87 cents per diluted share, compared with $36 million in the same quarter a year ago. Analysts surveyed by data provider FactSet had expected 72 cents a share.

Buckle may have seen a boost from overall retail sales during the 2017 holiday shopping season, when sales were up 5.5 percent nationally over 2016, according to the National Retail Federation. That’s the largest growth since 2010.

Buckle’s comparable store sales, which measure sales at stores open at least a year, were down about 3 percent for the quarter and about 7 percent for the company’s fiscal year.

Regardless, investors greeted the company with open arms Friday as its income beat expectations of Wall Street analysts: The stock was up 7 percent by the end of day, closing at $19.50 a share.

Sales of women’s merchandise were down 4.5 percent for the quarter; men’s merchandise sales were up 5 percent compared with the same period last year.

Buckle Chief Financial Officer and Senior Vice President of Finance Tom Heacock attributed the boost in profits to less discounting; more private label sales, which have higher gross margins; and an extra week in the company’s fiscal year. The company also saw tax savings due to the federal tax overhaul , Heacock said.

Chief Executive Dennis Nelson said more tax savings are expected in 2018, and that savings would be re-invested in the company’s online operation, its employees and its bricks-and-mortar stores.

“But that is all consistent with our strategy from almost day one,” Nelson said.

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