Buckle Inc (BKE) 2003 Q4 法說會逐字稿

Hi this is Tom Ecock (ph) with The Buckle, and this is a recording and a Buckle's commentary related to the company's March 4th, 2004 press release with jointly reported fourth quarter earnings and February sales.

Our March 4th, 2004 press release reported that net income for the 13-week period ended January 31st, 2004 was $15 million or 69 cents per share on a diluted basis. This was an increase in net income with 20.5% on an 8.8% net sales increase over the corresponding 13-week period in fiscal 2002.

Net income for the 52 weeks fiscal year ended January 31st, 2004 was 33.7 million or $1.56 per share on a diluted basis. This was an increase of 5.2% on a 5.4% net sales increase over the corresponding 52-week period in fiscal 2002.

For the fourth quarter of fiscal 2003, our gross margin dollars increased 16.8% compared to the prior year's fourth quarter. This resulted in a gross margin percentage of approximately 38.6%, which was an increase of approximately 265 basis points as a percentage of net sales, compared to the fourth quarter of fiscal 2002.

Looking at the components of cost of goods sold, actual merchandise margins improved over 240 basis points as a percentage of net sales. The company also reductions in fourth quarter expense as a percentage of net sales related to occupancy, buying and distribution. These improvements were partially offset by an increase in the bonus accrual.

Selling expense for the fourth quarter was 18.9% as a percentage of net sales, relatively even with the fourth quarter of the prior year. The company experienced increased expense during the period resulting primarily from increases in the bonus accrual, insurance costs and certain other selling expenses, which were almost equally offset by reductions as a percentage of net sales related to sales salaries, advertising, travel, selling supplies, bad debt expense and the expense associated with our annual, physical inventory.

General and administrative expenses for the fourth quarter as a percentage of net sales increased approximately 100 basis points compared to the same fiscal quarter a year ago and were equal to 3.8% as a percentage of net sales. The increase expense was attributable to an accrual for a compensation expense, created by unrealized gains in the non-qualified deferred compensation plan for the quarter, an increase in the accrual for vacation pay, an accrual for restricted stock compensation, which accounted for approximately 60 basis points of the increase, and an increase in maintenance supplies expense.

Income from operations was 16% as a percentage of net sales for the fiscal quarter ended January 31st, 2004, versus 14.4% for the quarter ended February 1st, 2003. Other income during the fourth quarter 2003 was up compared to the fourth quarter of fiscal 2002, primarily due to the income recorded on unrealized gains in the company's non-qualified deferred compensation plan, and due to an increase in income earned on the higher levels with cash and investments.

The aforementioned changes resulted in an overall increase of approximately 21% and our fourth quarter pre-tax net income compared to the fourth quarter of fiscal 2002. Income tax expense increased approximately 22% for the fourth quarter of fiscal 2003 compared to the same period a year ago, bringing net income for the period to 15 million or approximately 11.2% as a percentage of sales.

Our press release also includes the following selected balance sheet data as of January 31st, 2004. Cash and investments of 194.5 million, inventory at 61.2 million, net property and equipment of 66.3 million and accounts payable of 14.2 million. The complete balance sheet will be presented in the company's 2003 annual report.

We also reported in our press that February net sales for the four-week period ended February 28th, 2004 increased 14.9% to 29.3 million from sales of 25.5 million in the corresponding four-week period ended March 1st, 2003. Comparable store stales for stores open at least one full year for the four-week period ended February 28th, 2004 increase 10.8% in comparison to the four-week period ended March 1st, 2003.

At this time I'd like to briefly highlight some of the details from our various merchandise categories that led to February's 10.8% comparable store sales increase.

On the guys' side of the business, total sales were up over 10.5% from the same four weeks in the prior year and represented approximately 46% of the total sales for the month versus approximately 48% in the prior fiscal February.

Strong categories on the guys side included denims and woven shirts, both of which experienced double-digit sales growth from the same period in the prior year. For the fiscal month, overall price points on the guys' side of the business decreased slightly.

On the gals side of the business total sales were up over 19.5% from the same four weeks in the prior year and represented approximately 54.0% of the total sales for the month, versus approximately 52% in the prior fiscal February.

Strong categories on the gals side included denims and accessories, both of which experience double-digit sales growth from the same period in the prior year. For the fiscal month overall price points on the gals' side of the business were down slightly.

Within the guys' and gals' categories, combined accessory sales increased approximately 38.5% while combined footwear sales declined approximately 15% during the period. These two categories accounted for approximately 13% and 8% respectively of February's net sales.

Average price points in both categories were down from the same period in the prior year. In the aggregate, both UPT's and average dollars per transactions were up slightly for the four-week period, ended February 28th, 2004.

As of the end of the period, inventory on a company total basis was up nearly 9% and inventory on a comparable store basis was up approximately 6% in comparison to inventory levels as of March 1st, 2003.

For the month, merchandise margins were slightly improved in comparison to the same period a year ago. Total mark downs at the end of the period were up slightly from the prior year on a dollar basis, but down as a percentage of total inventory.

The Buckle currently operates 316 retail stores in 38 states, compared to 306 stores in 37 states at the same time a year ago.

It's our company policy to refrain from providing any guidance on current sales or to project results for the next quarter. Additionally, any forward-looking statements made during this commentary involve material risks and uncertainties and are subject to change based on factors which may be beyond the company's control. Accordingly, the company's future performance of financial results may differ materially from those expressed or implied in any such forward-looking statements. Such factors include, but are not limited to those described in the company's filings with the SEC.

I hope this brief commentary has answered your questions. If however, you have any further questions, please call Karen Rhoads at 308-236-4440 or myself at 308-238-2443. Thanks.