Buckle Inc (BKE) 2002 Q4 法說會逐字稿

Our March 6, 2003 press release reported net income of $12.4m, or $.57 per share on a diluted basis for the fourth quarter ended February 1, 2003. This is a decrease of 9.2% on a 1½% sales increase for the quarter. For the fourth quarter fiscal 2002, our gross margin dollars increased just 31 basis points compared to the prior year fourth quarter, resulting in a 36% gross margin percentage which was a decrease of about 40 basis points as a percentage of net sales compared to fourth quarter of 2001.

Looking at the components of cost of goods sold, actual merchandise margins were down less than 20 basis points as a percentage of net sales. This was due to January markdowns in the merchandise categories and especially in the guys' knit category. Cost also increased in occupancy and distribution categories for the fourth compared to the prior year. Occupancy costs increased just slightly primarily in utilities and depreciation expense and distribution costs were up as the company received more new freight in the fourth quarter this year than in the prior year.

Selling expense for the fourth quarter was 18.9% as a percentage of net sales, up 125 basis points from the fourth quarter of the prior year as a percentage of net sales. The increase resulted primarily from additional payroll expense for store sales and management personnel. Also our fourth quarter holiday gift wrapping supplies, bad checks and bank card charges were up from a year ago. General and administrative expenses for the fourth quarter as a percentage of net sales increased nearly 40 basis points compared to the same fiscal quarter a year ago. Most categories were very consistent with the prior year with increased expense in payroll expense and administrative supply costs.

Income from operations was 14.4% as a percentage of net sales for the fiscal quarter ended February 1, 2003, compared to 16.4% for the fourth quarter ended February 2 of 2002. Other income during the fourth quarter was basically even with the fourth quarter of 2001. And our income on the cash and investments did increase for the quarter while other income decreased. In cash and investments, the company did have higher levels of cash and investments during the quarter, however, our average interest rates continued to be lower than the prior year. These changes resulted in a 10.6% decrease in our fourth quarter pretax net income compared to the fourth quarter of fiscal 2001. Our income tax expense was down about 13% for the fourth quarter, bringing net income to $12.4m which is 9.2% as a percentage of net sales. That was down over 1% as a percentage of net sales from the fiscal 2001 fourth quarter net income to sales ratio.

Our press release includes only selected BS data as of the end of the fourth quarter. The complete BS will be presented in the company's audited financial statements as part of our annual report.

The company also released February sales results today. Reported net sales for the four week period ended March 1, 2003, increased 3.7% to $25.5m from sales of $24.6m in the corresponding 4-week period ended March 2, 2002. Our comparable store same store sales for sales open at least one year were up .5% for the same period.

Next, I will touch briefly on merchandise categories. Guys' denim was up slightly, gals’ denim were up double-digits, increasing total denim business by more than 12%. Woven and knit shirts were down on the guys' side and both up on the gals’ side of the business, sweater sales were down on both sides of the business and overall tops increased slightly as a percentage of net sales for the month. Guys and gals’ accessories on a combined basis in February saw sales increase of over 2% compared to last year, with guys' accessories down and gals’ accessories up. Outerwear sales were up on both sides of the business with an increase on a combined basis of over 42%. Footwear sales on both the guys and gals’ side were down bringing footwear sales to 11% of February sales versus 12% for this category and in February of 2002. Our average price points were down compared to last year in footwear, particularly on the guys' side, resulting from January markdowns.

Overall, the company's average price points were up slightly for fiscal February compared to a year ago and our inventory on a company total basis was up over 10% and on a comparable store basis up 7%. It is our company policy to refrain from providing any guidance on current sales and to project net quarter earnings results.