The Buckle, Inc. Q2 FY2025 earnings call

• Net income for the 13-week second quarter ended August 2, 2025, was $45 million or $0.89 per share vs $39.3 million or $0.78 per share in prior year. Year-to-date net income was $80.2 million or $1.59 per share vs $74.1 million or $1.48 per share. - Net sales for the 13-week second quarter increased 8.3% to $305.7 million. Comparable store sales increased 7.3%, online sales increased 17.7% to $43.6 million. Year-to-date net sales increased 6.1% to $577.9 million, comparable store sales up 5.2%, online sales up 10.5% to $90 million. - Gross margin for the quarter was 47.4% (50 basis points increase from prior year), year-to-date gross margin was 47.1% (60 basis points increase). - SG&A for the quarter was 29% of sales vs 29.8% prior year; year-to-date SG&A was 29.8% of sales vs 29.9% prior year. - Operating margin for the quarter was 18.4% vs 17.1% prior year; year-to-date operating margin was 17.3% vs 16.6% prior year. - Balance sheet as of August 2, 2025: inventory $142.5 million (up 8.4% y-o-y), total cash and investments $349.6 million, fixed assets net of depreciation $158.8 million. - Capital expenditures $12 million, depreciation $6.1 million for the quarter. Year-to-date capital expenditures $23.4 million, with $20.2 million for store construction/remodels/tech upgrades and $3.2 million for corporate HQ/distribution. - Opened 2 new stores, completed 4 full store remodels (1 relocation), closed 1 store in the quarter; year-to-date: 2 new stores, 9 full remodels, 3 closures; remainder of year: anticipate 4 new stores and 12 more full remodels.

For the second quarter, women's merchandise sales increased about 18.5% vs prior year, representing approximately 47.5% of sales. Men's merchandise sales were up about 1.5% vs prior year, representing approximately 52.5% of total sales. Accessory sales increased approximately 9.5% vs prior year, footwear sales were down about 0.5%. Kids business increased approximately 23% year-over-year, growing to ~4.5% of total business. Denim accounted for approximately 36% of sales and tops accounted for approximately 29.5%. Private label represented 43.5% of sales for the quarter.

• The company reiterates it does not provide future sales or earnings guidance. - Anticipates opening 4 additional new stores and completing 12 more full remodeling projects for the remainder of the year.

• Tariffs: Low to mid-single digit average cost increases on average; some vendors have seen higher single-digit cost increases. - Occupancy expense: Increased in Q2 compared to Q1 due to store projects, new store openings, and remodels moving out of malls to better locations, leading to higher base rent and percentage rent with strong sales.

Q: Can you elaborate more on the drivers behind merchandise margin expansion and impact of tariffs?

A: Tom mentioned merchandise margin growth was maintained with strong full regular price selling. Dennis noted tariffs have low to mid-single digit average cost increases on average, some vendors have higher single-digit increases.

Q: Follow-up on gross margin leverage from buying, occupancy, distribution; why didn't leverage flow through more?

A: Tom said occupancy expense was the driver, with occupancy expense increasing in Q2 vs Q1 due to store projects, new openings, remodels.

Q: Follow-up on SG&A components, specifically nonrecurring digital commerce investments lapping?

A: Tom said the benefit from nonrecurring digital commerce investments flows into Q3 as well, as efforts to improve buckle.com started late Q1 and continued into Q2 and Q3.