The Buckle (BKE) Q4 2025 Earnings Call Transcript

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DATE

Friday, March 13, 2026 at 10 a.m. ET

CALL PARTICIPANTS

• Chief Financial Officer — Thomas B. Heacock
• Vice President of Finance — Adam J. Akerson
• President and Chief Executive Officer — Dennis H. Nelson

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TAKEAWAYS

• Net Sales -- $399.1 million, up 5.3% year over year, with full-year sales of $1.298 billion, a 6.6% increase.
• Net Income -- $80.8 million, or $1.59 per diluted share, compared to $77.2 million, or $1.53 per diluted share, in the prior year.
• Comparable Store Sales -- Increased 3.9% for the quarter and 5.6% for the year.
• Online Sales -- Rose 6.4% to $74.2 million for the quarter and 9.8% to $217.1 million for the year.
• Gross Margin -- 52.6% for the quarter, unchanged, and 49% for the year, up from 48.7%.
• Selling, General, and Administrative Expenses -- 27.4% of sales for the quarter, rising from 27.2% due to marketing and G&A compensation increases.
• Operating Margin -- 25.2% for the quarter, slightly down from 25.4%; 20.2% for the year, up from 19.8%.
• Inventory -- $139.5 million at quarter-end, representing a 15.5% year-over-year increase.
• Cash and Investments -- $306.6 million after distributing $225.1 million in dividends during the year.
• Capital Expenditures -- $10.9 million for the quarter, and $45.4 million for the year, with $40.7 million for store and technology investments.
• Store Activity -- Opened two new stores, completed five full remodels (four relocations), and closed four stores during the quarter.
• Planned Expansion -- Management expects to open 12 to 14 new stores and complete 12 to 14 remodel projects in the upcoming year, with at least half being relocations into outdoor centers.
• Women's Business Growth -- Fifth consecutive quarter of double-digit growth, with merchandise sales up approximately 12% and accounting for 46% of sales versus 43% a year ago.
• Women's Denim Category -- Up 10.5% in sales, with average price points rising from $83.10 to $90.20.
• Average Transaction Value -- Up about 3.5% for the quarter and 2.5% for the year.
• Unit Per Transaction (UPT) -- Decreased about 1.5% for the quarter and 1% for the year.
• Men's Segment -- Sales down about 0.5%, representing 54% of total sales, compared to 57% last year.
• Men's Denim -- Down approximately 3.5%, with average price points rising from $86.30 to $86.95.
• Accessory Category -- Sales grew around 3.5% with average price points up 8%.
• Footwear Sales -- Down about 3%, with average price points up 8.5%.
• Kids Business -- Delivered approximately 16% growth year over year and remains a core growth focus.
• Private Label Business -- Represented 49.5% of quarterly sales and 47.5% for the full year, consistent with the previous year.
• Store Count -- Ended the period with 440 stores in 42 states.
• Income Tax Expense -- 23.3% of pre-tax income for the quarter and 24% for the year, both slightly below prior-year levels.

SUMMARY

Management highlighted the continued outperformance in women's merchandise, particularly denim, which saw significant price increases and share gains within the business mix. The company is executing an accelerated store expansion strategy for the coming year, focusing on new locations and remodels, notably within outdoor centers and outlet formats. Broad-based growth in the kids segment and enhancements in product assortment were emphasized as foundational for future revenue gains. Cost discipline was maintained as SG&A and gross margin performance balanced revenue investments and merchandising margin improvements. Cash levels remain high following substantial shareholder returns through dividends, while inventory investments increased to support growing demand.

• President and CEO Dennis H. Nelson said, "We have always taken an opportunistic approach to our opening of stores, and we have been very successful with some of the premium and Tanger outlets."
• Inventory build was described as strategic to "ensure we could support the heightened demand and service our guests not only in style and fits, but also in sizes and inseams."
• The mix of private label remained steady, reflecting management’s intent to balance own-brand and third-party offerings per strategic goals.
• Plans for 2026 expansion specifically target relocations to higher-traffic outdoor centers and premium outlet opportunities identified by management.

INDUSTRY GLOSSARY

• UPT (Unit Per Transaction): Average number of items purchased per single customer transaction, used to analyze basket size trends.
• AUR (Average Unit Retail): Average selling price per merchandise unit, indicating pricing power and product mix shifts.

Full Conference Call Transcript

Thomas B. Heacock: Good morning, and thank you for joining us this morning. Our March 13, 2026 press release reported that net income for the 13-week fourth quarter, which ended January 31, 2026, was $80.8 million, or $1.59 per share on a diluted basis, which compares to net income of $77.2 million, or $1.53 per share on a diluted basis, for the prior-year 13-week fourth quarter, which ended February 1, 2025. Net income for the 52-week fiscal year ended January 31, 2026, was $209.7 million, or $4.14 per share on a diluted basis, which compares to net income of $195.5 million, or $3.89 per share on a diluted basis, for the prior-year 52-week fiscal year, which ended February 1, 2025.

Net sales for the quarter increased 5.3% to $399.1 million compared to net sales of $379.2 million for the prior year. Comparable store sales for the quarter increased 3.9% in comparison to the same 13-week period in the prior year, and our online sales increased 6.4% to $74.2 million. Total sales for the full fiscal year increased 6.6% to $1.298 billion compared to net sales of $1.218 billion for the prior year. Comparable store sales for the year increased 5.6% in comparison to the same 52-week period in the prior year, and online sales increased 9.8% to $217.1 million.

For the quarter, UPTs decreased approximately 1.5%, the average unit retail increased approximately 5.5%, and the average transaction value increased about 3.5%. For the full year, UPTs decreased approximately 1%, the average unit retail increased approximately 3.5%, and the average transaction value increased about 2.5%. Gross margin for the quarter was 52.6%, consistent with 2024. For the quarter, merchandise margins increased 35 basis points, which was offset by increased buying, distribution, and occupancy expenses, which was down 35 basis points.

Full-year gross margin was 49%, up 30 basis points from 48.7% for the prior year, and the increase was the result of a 20 basis point increase in merchandise margins along with 10 basis points of leverage in buying, distribution, and occupancy expenses. Selling, general, and administrative expenses for the quarter were 27.4% of sales, compared to 27.2% for 2024, and for the full year, SG&A was 28.8% of net sales, compared to 28.9% in the prior year.

The fourth quarter increase was due to a 30 basis point increase in marketing spend and a 20 basis point increase in G&A compensation-related expenses, which were partially offset by a 10 basis point decrease in incentive compensation accruals and a 20 basis point decrease in other SG&A expense categories. Our operating margin for the quarter was 25.2% compared to 25.4% for 2024, and for the full year, our operating margin was 20.2% compared to 19.8% for the same period last year.

Income tax expense as a percentage of pre-tax net income for the quarter was 23.3% compared to 23.7% for 2024, and for the full year income tax expense as a percentage of pre-tax net income was 24% compared to 24.2% in the prior year. Our press release also included a balance sheet as of January 31, 2026, which included the following: inventory of $139.5 million, which was up 15.5% from the same time a year ago, and $306.6 million of total cash and investments, which was after the payment of $225.1 million in dividends during the year. We ended the quarter with $162.4 million in fixed assets, net of accumulated depreciation.

Our capital expenditures for the quarter were $10.9 million, and depreciation expense was $7.2 million. For the full year, capital expenditures were $45.4 million, and depreciation expense was $25.4 million. Full-year capital spending was broken down as follows: $40.7 million for new store construction, store remodels, and technology upgrades, and $4.7 million for capital spending at the corporate headquarters and distribution center. During the quarter, we opened two new stores, completed five full store remodels, four of which were relocations into new outdoor shopping centers, and closed four stores, which brings our full-year count for last year to six new stores, 20 full remodels, and seven store closures.

Current plans for fiscal 2026 include the opening of 12 to 14 new stores and completing 12 to 14 full remodel projects, with at least half of the planned remodels being relocations into new outdoor centers. We have also closed one store so far year-to-date, with no additional store closures currently planned. The Buckle, Inc. ended the year with 440 retail stores in 42 states, compared with 441 stores in 42 states at 2024. I will now turn the call over to Adam J. Akerson, our Vice President of Finance.

Adam J. Akerson: Thanks. Tom, and good morning. Q4 2025 marked the fifth consecutive quarter of double-digit growth for our women's business, with merchandise sales increasing about 12% for the quarter. For the quarter, our women's business represented approximately 46% of sales, which compares to 43% last year. The women's denim category continued to be the driver of results, with denim up 10.5% year-over-year and average denim price points increasing from $83.10 in 2024 to $90.20 in 2025. The rise in AUR reflects the exceptional performance of our Buckle Black label, which exceeded the growth of the overall denim category, together with notable momentum from other higher price point national brands.

We continue with planned increases to our denim inventory throughout the quarter to ensure we could support the heightened demand and service our guests not only in style and fits, but also in sizes and inseams. We ended the quarter with a strong selection going into the new year. Building on our strong women's denim offering, our team continued to deliver a fresh assortment for our guests. Our casual pants selection continued to provide a strong alternative bottom in a variety of prints and colors. We achieved growth across all women's top categories, with most notable growth in knits and sweaters.

We also had strong performance in our outerwear and accessories business, and in total, average women's price points for the quarter increased approximately 6.5% from $51.55 to $54.95. On the men's side, merchandise sales were down about half a percent against the prior year, representing approximately 54% of total sales compared to 57% a year ago. Our men's denim business was down about three and a half percent, but was highlighted by slight growth in our key private label brands. Average denim price points increased about half a percent, from $86.30 in 2024 to $86.95 in 2025. In other categories, we saw growth in our knits and tees business, along with outerwear and accessories.

For the quarter, overall average men's price points increased approximately 4.5% from $56.30 to $58.80. On a combined basis, accessory sales for the quarter increased approximately 3.5% against the prior year, while footwear sales were down about 3%. These two categories accounted for approximately 115% respectively, of fourth quarter net sales, which is consistent with the same period a year ago. For the quarter, average accessory price points were up approximately 8%, and average footwear price points were up 8.5%. Together, our kids business delivered another standout quarter, growing approximately 16% year-over-year. This remains a key area of opportunity for growth in building the business and earning new guests from a young age.

For the quarter, denim accounted for approximately 44% of sales, and tops accounted for approximately 29.5%, which compares to 45% and 29% for each in 2024. Our private label business for the quarter represented 49.5% of sales versus 51% in 2024, and this brings our full-year private label business to 47.5% of sales, which is consistent with a year ago. We will now open for questions.

Operator: Thank you. As a reminder for participants, if you would like to ask a question, please raise your hand in the Zoom app. Prior to asking your question, please state your name and firm affiliation. Again, if you would like to ask a question, please raise your hand using the Zoom application. We have a question from John. John, your microphone is unmuted.

John Bratz: Good morning. Dennis?

Dennis H. Nelson: Yes. Good morning, John.

John Bratz: How are you?

Dennis H. Nelson: Good. Thank you.

John Bratz: It looks like you are accelerating your store expansion plan. I think I heard 12 to 14 stores. Can you tell us a little bit about the strategy behind that?

Dennis H. Nelson: We have always taken an opportunistic approach to our opening of stores, and we have been very successful with some of the premium and Tanger outlets. We have looked at new opportunities there where a few years ago, we were not as aggressive on outlets, but we found them to work very well for us. As the right ones come up, we have added that, as well as a few select markets. With our success in several of the markets, that has opened new opportunities for us. We look forward to those, as well as several of our relocations to outdoor centers and improvements in location in current malls that we are in now, where we can expand as well.

John Bratz: Okay. Adam, I keep reading reports about how strong the denim category is across the board, and our office fashionista confirms that. What is driving the category, and is there something in particular that consumers are looking for?

Dennis H. Nelson: I might take that again, John. As our ladies' and women's denim has grown, there is a lot of new fashion. We have had a lot of different bottom openings over the last couple of years that have been great, different rises, finishes, and now the wide leg is added to it. It just gives us another fashion item to work with our more traditional fits, and we continue to build our private brands along with our branded partners and have a great selection of product. We have expanded some of our sizes and inseams, so we have been aggressive on continuing to build that business, and the stores are really excited about the selection.

John Bratz: Okay. One last question, Dennis. The kids category, the youth category, is doing very strong. Do all your stores have youth products? I know you had a couple of stores that were maybe totally dedicated to youth sales. Do you still have those? Going back to the original question, how many of your stores have youth product?

Dennis H. Nelson: The majority of stores have a good selection of youth. We have a small group that has mainly denim jeans and T-shirts, and then we have maybe 15% of the stores where we do not have youth, usually because they do not have enough room in their stores to hold their selection of men's, women's, and youth. What was the other part of the question?

John Bratz: Do you still—

Dennis H. Nelson: We had four youth stores at one time because we just needed more space for the product in those stores. They were very strong stores. Since then, we have expanded three of those stores and then put the youth back in with our regular store, so we just have one separate youth store right now.

John Bratz: Okay. Thank you.

Dennis H. Nelson: Thank you.

Operator: Okay. We now have a question from Henrik Nies Nielsen. Henrik, your microphone is unmuted.

Henrik Nies Nielsen: Can you hear me?

Henrik Nies Nielsen: Yes.

Henrik Nies Nielsen: Okay. Very good. Thank you. Thank you for the presentation and the update. Is it—can you provide some information about your net cash flows as well, or you do not do that in the updates here? Like the cash flow from the operating, investing, and financing activities.

Thomas B. Heacock: We do not—this is Tom. We do not include cash flow in our press release. That is typically just in our SEC filings.

Henrik Nies Nielsen: Okay. Okay. Alright. Thanks. Thank you.

Operator: At this time, there are no further questions.

Thomas B. Heacock: There are no further questions. We can conclude the call. Thank you, everybody, for joining and participating. Have a great rest of the day and a wonderful weekend.

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