Buckle Inc (BKE) 2004 Q3 法說會逐字稿

Good morning. Hi, this is Tom Hickock (ph) with The Buckle, and this is a recording of The Buckle's commentary related to the Company's quarterly earnings press release for the 13-week period ended October 30, 2004. Our November 11, 2004 press release reported net income for the 13-week period ended October 30, 2004 was 14.9 million or 67 cents per share on a diluted basis. This was an increase in net income of 22.4 percent on a 10.2 percent net sales increase over the corresponding 13-week period in fiscal 2003. For the quarter, gross margin dollars increased 19.7 percent compared to the prior year's third quarter. This results in the gross margin percentage of approximately 39.1 percent, which was an improvement of approximately 310 basis points as a percentage of net sales from the third quarter of fiscal 2003.

Looking at the components of cost of goods sold, actual merchandise margins improved over 200 basis points as a percentage of net sales. The Company also had reductions in third-quarter expense as a percentage of net sales related to occupancy, distribution, and buying. These improvements were partially offset by an increase in the bonus accrual.

Selling expense for the third quarter was 18.5 percent as a percentage of net sales, which was an increase of approximately 95 basis points as a percentage of net sales compared to the third quarter of fiscal 2003. The increased expense was attributable to an increase in the bonus accrual and to increases in Internet expenses and certain other selling expenses. These increases were, however, partially offset by reductions as a percentage of net sales in travel costs, bad debt expense, selling supplies, health insurance expense, and certain other selling expenses.

General administrative expenses for the third quarter were 3.6 percent as a percentage of net sales, which was an increase of approximately 45 basis points as a percentage of net sales compared to the third quarter of fiscal 2003. This increase was attributable to an increase in the bonus accrual and an increase in airplane expenses. These increases were, however, partially offset by reductions as a percentage of net sales in certain other general administrative expenses.

Income from operations was 16.9 percent as a percentage of net sales for the fiscal quarter ended October 30, 2004, versus 15.2 percent for the quarter ended November 1, 2003. Other income during the third quarter of fiscal 2004 was up compared to the third quarter of fiscal 2003, primarily due to an increase in income earned on the Company's cash and investments. The aforementioned changes result in an overall increase of approximately 22.4 percent in our third-quarter pretax net income compared to the third quarter of fiscal 2003. Income tax expense for the period increased approximately 22.4 percent compared to the same period a year ago, bringing third-quarter net income to 14.9 million or approximately 11.2 percent as a percentage of net sales.

Our press release also includes the following selected balance sheet data as of October 30, 2004. Cash and investments of 194.9 million, inventory of 94.7 million, net property and equipment of 66.3 million, and accounts payable of 16.1 million. The Buckle ended the quarter with 327 retail stores in 38 states, and currently operates 329 retail stores in 38 states compared with 319 stores in 38 states at the same time a year ago. It is 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 and 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.