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BUCKLE INC 8-K Analysis & Summary – 3/14/2025

⚠️This is not investment advice.

⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️

Buckle, Inc. (The)

Filing date:

03/14/2025

TLDR:

The Buckle, Inc. reports fourth quarter and fiscal year 2024 net income, with Q4 net income at $77.2 million and fiscal year net income at $195.5 million.

ELI5:

Buckle, a clothing store, made less money this past year even though its stores did better in the last quarter. Their online sales also went down, but they still have a good amount of money in the bank.

Accession #:

0000885245-25-000046

Published on

Analyst Summary

  • Net sales decreased for both the quarter and the year, with a 3.4% decrease year-over-year, primarily due to having one less week in the reporting period.
  • Comparable store sales increased by 3.9% for the quarter, indicating positive performance in brick-and-mortar locations.
  • Online sales decreased for the year by 4.3%, suggesting potential challenges in the online retail space.
  • Net income and EPS decreased by 11.1% and 11.6% respectively, reflecting the lower sales volume.
  • The company maintains a strong cash position with $266.9 million in cash and cash equivalents.
  • Inventory levels decreased, indicating effective inventory management.
  • Gross Profit Margin decreased slightly from 49.10% to 48.68%.
  • Operating Profit Margin decreased from 21.49% to 19.82%.
  • Net Profit Margin decreased from 17.44% to 16.05%.
  • Return on Assets (ROA) decreased from 24.71% to 21.41%.
  • Return on Equity (ROE) decreased from 53.22% to 46.13%.
  • Basic EPS decreased from $4.44 to $3.92, and Diluted EPS decreased from $4.40 to $3.89.
  • Revenue Growth decreased by -3.44%.
  • Net Income Growth decreased by -11.12%.
  • EPS Growth decreased by -11.71%.

Opportunities and Risks

  • Risk: Dependence on brick-and-mortar stores in a changing retail landscape.
  • Risk: Economic downturn impacting consumer spending on discretionary items like apparel.
  • Opportunity: Continued growth in comparable store sales, indicating successful merchandising and customer engagement strategies.
  • Opportunity: Potential for expansion into new markets or product categories.

Potential Implications

Company Performance

  • Continued focus on brick-and-mortar sales could limit growth potential in the long term.
  • Effective inventory management and a strong balance sheet provide a solid foundation for future investments.
  • Decreased profitability may require cost-cutting measures or strategic adjustments to improve margins.

Stock Price

  • The decrease in sales and profitability could negatively impact the stock price in the short term.
  • Strong cash position and potential for future growth could provide support for the stock price.
  • Investor sentiment will likely depend on management’s commentary during the earnings webcast and the details provided in the upcoming 10-K filing.

SEC Filing Report: Buckle Inc. 8-K (March 14, 2025)

Executive Summary

This 8-K filing from Buckle Inc. (BKE) announces the company’s financial results for the fourth quarter and fiscal year ended February 1, 2025. While comparable store sales increased for the quarter, overall net sales and net income decreased for both the quarter and the year compared to the prior year (which included an extra week). The company’s balance sheet remains strong. A hold rating is recommended, pending further analysis of the upcoming 10-K filing and management’s commentary from the earnings webcast.

Company Overview

Buckle Inc. is a specialty retailer of apparel, accessories, and footwear, operating 440 retail stores in 42 states as of February 1, 2025. The company is known for its denim selection and focus on customer service.

Detailed Analysis

Filing Overview

This 8-K filing primarily concerns Item 2.02, “Results of Operations and Financial Condition,” and includes the associated press release (Exhibit 99.1). It also includes Exhibit 104, the Cover Page Interactive Data File.

Key Financial Highlights

Income Statement Analysis

Metric Q4 2025 (13 Weeks) Q4 2024 (14 Weeks) FY 2025 (52 Weeks) FY 2024 (53 Weeks) Change (FY)
Net Sales $379.2M $382.4M $1.218B $1.261B -3.4%
Comparable Store Sales +3.9% N/A -2.7% N/A N/A
Online Sales $69.7M $65.5M $197.7M $206.5M -4.3%
Net Income $77.2M $79.6M $195.5M $219.9M -11.1%
EPS (Diluted) $1.53 $1.59 $3.89 $4.40 -11.6%

* **Sales Decline:** Net sales decreased for both the quarter and the year, despite an increase in comparable store sales for the quarter. This suggests that the decrease in sales is due to having one less week in the quarter and year, and potentially store closures.
* **Online Sales:** Online sales decreased for the year, despite an increase in the quarter. This could indicate a shift in consumer behavior or increased competition in the online retail space.
* **Profitability:** Net income and EPS decreased, reflecting the lower sales volume.

Balance Sheet Analysis

Asset/Liability February 1, 2025 February 3, 2024 Change
Cash and Cash Equivalents $266.9M $268.2M -$1.3M
Inventory $120.8M $126.3M -$5.5M
Total Current Assets $439.2M $444.3M -$5.1M
Total Assets $913.2M $889.8M +$23.4M
Total Current Liabilities $213.9M $221.5M -$7.6M
Total Liabilities $489.4M $476.6M +$12.8M
Stockholders’ Equity $423.8M $413.2M +$10.6M

* **Strong Liquidity:** Buckle maintains a strong cash position.
* **Inventory Management:** Inventory levels decreased, which is a positive sign.
* **Increased Assets and Liabilities:** Total assets and liabilities both increased, indicating growth and potentially increased leverage.

Management’s Narrative (MD&A Insights)

The 8-K provides limited MD&A. The press release highlights the decrease in net sales and net income, but also points to the increase in comparable store sales for the quarter. Management’s commentary during the earnings webcast (scheduled for later in the day) will be crucial for understanding the drivers behind these results and their outlook for the future.

Risks and Opportunities

* **Risk:** Dependence on brick-and-mortar stores in a changing retail landscape. The decrease in online sales for the year is concerning.
* **Risk:** Economic downturn impacting consumer spending on discretionary items like apparel.
* **Opportunity:** Continued growth in comparable store sales, indicating successful merchandising and customer engagement strategies.
* **Opportunity:** Potential for expansion into new markets or product categories.

Conclusion and Actionable Insights

Buckle’s Q4 and FY2024 results show a mixed picture. While comparable store sales increased in Q4, overall sales and profitability declined. The company maintains a strong balance sheet, but the decrease in online sales and the overall sales decline warrant further investigation.

**Recommendation:** Hold. A more definitive recommendation will be possible after reviewing the upcoming 10-K filing and listening to management’s commentary during the earnings webcast. Key areas to focus on include:

* Reasons for the decline in online sales and strategies to address it.
* Details on store closures and their impact on overall sales.
* Management’s outlook for future growth and profitability.
* Any discussion of potential risks and opportunities.

1. Commentary

The Buckle, Inc. experienced a slight decrease in net sales for both the 13-week and 52-week periods ending February 1, 2025, compared to the previous year. Despite the sales dip, the company maintained a strong profitability profile, with a healthy net income. The balance sheet reflects a solid financial position with increased total assets and stockholders’ equity. While EPS decreased, the company continues to generate substantial earnings.

2. Financial Ratio and Metric Analysis

Profitability

  • Gross Profit Margin

    • Metric: 52-Weeks Ended February 1, 2025: (592,787 / 1,217,689) = 48.68%
    • Trend: 53-Weeks Ended February 3, 2024: (619,065 / 1,261,102) = 49.10%. Percentage Change: (48.68 – 49.10) / 49.10 = -0.85%
    • Industry: The apparel retail industry generally sees gross profit margins between 40% and 50%. Buckle’s gross profit margin is within this range.
  • Operating Profit Margin

    • Metric: 52-Weeks Ended February 1, 2025: (241,364 / 1,217,689) = 19.82%
    • Trend: 53-Weeks Ended February 3, 2024: (271,059 / 1,261,102) = 21.49%. Percentage Change: (19.82 – 21.49) / 21.49 = -7.77%
    • Industry: A good operating margin for apparel retail is around 10%. Buckle’s operating margin is significantly higher, indicating efficient operations.
  • Net Profit Margin

    • Metric: 52-Weeks Ended February 1, 2025: (195,468 / 1,217,689) = 16.05%
    • Trend: 53-Weeks Ended February 3, 2024: (219,919 / 1,261,102) = 17.44%. Percentage Change: (16.05 – 17.44) / 17.44 = -7.97%
    • Industry: Top-performing apparel retailers can achieve net profit margins of 7-10%. Buckle’s net profit margin is very strong compared to industry averages.
  • Return on Assets (ROA)

    • Metric: 52-Weeks Ended February 1, 2025: 195,468 / 913,173 = 21.41%
    • Trend: 53-Weeks Ended February 3, 2024: 219,919 / 889,810 = 24.71%. Percentage Change: (21.41 – 24.71) / 24.71 = -13.35%
    • Industry: An ROA of 5% or higher is generally considered good. Buckle’s ROA is exceptionally high, indicating efficient asset utilization.
  • Return on Equity (ROE)

    • Metric: 52-Weeks Ended February 1, 2025: 195,468 / 423,804 = 46.13%
    • Trend: 53-Weeks Ended February 3, 2024: 219,919 / 413,220 = 53.22%. Percentage Change: (46.13 – 53.22) / 53.22 = -13.32%
    • Industry: An ROE of 15-20% is generally considered good. Buckle’s ROE is very high, indicating efficient use of equity to generate profits.
  • Earnings Per Share (EPS)

    • Metric: Basic EPS: $3.92, Diluted EPS: $3.89
    • Trend: Basic EPS: $4.44, Diluted EPS: $4.40. Basic EPS Percentage Change: (3.92 – 4.44) / 4.44 = -11.71%. Diluted EPS Percentage Change: (3.89 – 4.40) / 4.40 = -11.59%
    • Industry: EPS varies widely in the apparel retail industry. Buckle’s EPS is relatively strong.

Liquidity

  • Current Ratio

    • Metric: 439,209 / 213,932 = 2.05
    • Trend: 444,256 / 221,456 = 2.01. Percentage Change: (2.05 – 2.01) / 2.01 = 1.99%
    • Industry: A current ratio between 1.5 and 2 is generally considered healthy. Buckle’s current ratio is within this range, indicating good liquidity.
  • Quick Ratio (Acid-Test Ratio)

    • Metric: (439,209 – 120,789) / 213,932 = 1.49
    • Trend: (444,256 – 126,290) / 221,456 = 1.44. Percentage Change: (1.49 – 1.44) / 1.44 = 3.47%
    • Industry: A quick ratio of 1 or higher is generally considered healthy. Buckle’s quick ratio is above 1, indicating good short-term liquidity.
  • Cash Ratio

    • Metric: (266,929 + 23,801) / 213,932 = 1.36
    • Trend: (268,213 + 22,210) / 221,456 = 1.31. Percentage Change: (1.36 – 1.31) / 1.31 = 3.82%
    • Industry: A cash ratio of 0.5 or higher is generally considered healthy. Buckle’s cash ratio is strong, indicating a high ability to cover current liabilities with cash and short-term investments.

Solvency/Leverage

  • Debt-to-Equity Ratio

    • Metric: 489,369 / 423,804 = 1.15
    • Trend: 476,590 / 413,220 = 1.15. Percentage Change: (1.15 – 1.15) / 1.15 = 0%
    • Industry: The apparel retail industry typically has a debt-to-equity ratio between 0.5 and 1.5. Buckle’s ratio is within this range.
  • Debt-to-Assets Ratio

    • Metric: 489,369 / 913,173 = 0.54
    • Trend: 476,590 / 889,810 = 0.54. Percentage Change: (0.54 – 0.54) / 0.54 = 0%
    • Industry: A debt-to-assets ratio below 0.6 is generally considered healthy. Buckle’s ratio is within this range, indicating a reasonable level of debt.
  • Interest Coverage Ratio (Times Interest Earned)

    • Metric: The filing does not provide interest expense. Cannot calculate.
    • Industry: N/A

Activity/Efficiency

  • Inventory Turnover

    • Metric: 624,902 / 120,789 = 5.17
    • Trend: 642,037 / 126,290 = 5.08. Percentage Change: (5.17 – 5.08) / 5.08 = 1.77%
    • Industry: Inventory turnover varies widely in the apparel retail industry, but a turnover of 4-6 is generally considered good. Buckle’s inventory turnover is within this range.
  • Days Sales Outstanding (DSO)

    • Metric: (6,758 / 1,217,689) * 365 = 2.03 days
    • Trend: (8,697 / 1,261,102) * 365 = 2.51 days. Percentage Change: (2.03 – 2.51) / 2.51 = -19.12%
    • Industry: A low DSO is generally desirable. Buckle’s DSO is very low, indicating efficient collection of receivables.
  • Days Payable Outstanding (DPO)

    • Metric: (45,982 / 624,902) * 365 = 26.85 days
    • Trend: (45,958 / 642,037) * 365 = 26.09 days. Percentage Change: (26.85 – 26.09) / 26.09 = 2.91%
    • Industry: DPO varies depending on industry practices. Buckle’s DPO is relatively short.
  • Asset Turnover

    • Metric: 1,217,689 / 913,173 = 1.33
    • Trend: 1,261,102 / 889,810 = 1.42. Percentage Change: (1.33 – 1.42) / 1.42 = -6.34%
    • Industry: Asset turnover varies by industry. Buckle’s asset turnover indicates efficient use of assets to generate sales.

Valuation

  • Price-to-Earnings Ratio (P/E)

    • Metric: 36.13 / 3.92 = 9.22
    • Trend: To determine the trend, we would need the P/E ratio from the previous comparable period, which is not provided in the filing.
    • Industry: The P/E ratio for the apparel retail industry varies, but a P/E of 10-20 is common. Buckle’s P/E ratio is relatively low, which could indicate that the stock is undervalued.
  • Price-to-Book Ratio (P/B)

    • Metric: Market Cap = 50,773,556 * 36.13 = 1,834,489,772.28. Book Value per Share = 423,804,000 / 50,773,556 = 8.35. P/B = 36.13 / 8.35 = 4.33
    • Trend: To determine the trend, we would need the P/B ratio from the previous comparable period, which is not provided in the filing.
    • Industry: A P/B ratio between 1 and 3 is often considered reasonable. Buckle’s P/B ratio is higher than this range.
  • Price-to-Sales Ratio (P/S)

    • Metric: Market Cap = 1,834,489,772.28. P/S = 1,834,489,772.28 / 1,217,689,000 = 1.51
    • Trend: To determine the trend, we would need the P/S ratio from the previous comparable period, which is not provided in the filing.
    • Industry: A P/S ratio of less than 1 is often considered good. Buckle’s P/S ratio is slightly higher than 1.
  • Enterprise Value to EBITDA (EV/EBITDA)

    • Metric: Market Cap = 1,834,489,772.28. Total Debt = 489,369,000 – 28,116,000 (Deferred Compensation) = 461,253,000. Cash = 266,929,000. EV = 1,834,489,772.28 + 461,253,000 – 266,929,000 = 2,028,813,772.28. EBITDA = 241,364,000 + 58,247,000 + 293,176,000 = 592,787,000. EV/EBITDA = 2,028,813,772.28 / 592,787,000 = 3.42
    • Trend: To determine the trend, we would need the EV/EBITDA ratio from the previous comparable period, which is not provided in the filing.
    • Industry: An EV/EBITDA ratio of 10 or less is often considered reasonable. Buckle’s EV/EBITDA ratio is relatively low.

Growth Rates

  • Revenue Growth

    • Metric: (1,217,689 – 1,261,102) / 1,261,102 = -3.44%
    • Industry: N/A
  • Net Income Growth

    • Metric: (195,468 – 219,919) / 219,919 = -11.12%
    • Industry: N/A
  • EPS Growth

    • Metric: (3.92 – 4.44) / 4.44 = -11.71%
    • Industry: N/A

Other Relevant Metrics

  • No company-specific KPIs or non-GAAP metrics were presented in the provided document.

⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️