Buckle Inc (BKE) 2005 Q3 法說會逐字稿

Hi, this is Tom Hicock 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 ended October 29, 2005. Our November 10, 2005 press release reported that net income for the 13-week week period ended October 29, 2005 was 16.6 million or $0.82 cents per share on a diluted basis. This was an increase in net income of 11.5% on a 3.2% net sales increase over the corresponding 13-week period in fiscal 2004.

For the quarter, gross margin dollars increased 7.8% compared to the prior year's third quarter. This resulted in a gross margin percentage of approximately 40.7% which was an improvement of approximately 170 basis points as a percentage of net sales from the third quarter of fiscal 2004.

Looking at the components of cost of goods sold, actual merchandise margins improved approximately 185 basis points as a percentage of net sales. The Company also had a reduction in second-quarter expense as a percentage of net sales related to the incentive bonus accrual. These reductions were, however, partially offset by an increase in occupancy expense during the period.

Selling expense for the third quarter were 19.6% as a percentage of net sales which was an increase of approximately 105 basis points from the third quarter of fiscal 2004. This increase was primarily attributable to increases in Internet expenses, store salaries, bank card fees, advertising expense, travel cost and insurance expense. These increases were, however, partially offset by a reduction as a percentage of net sales in expense related incentive bonus accrual.

General and administrative expenses for the third quarter were 3% as a percentage of net sales which was a decrease of approximately 60 basis points compared to the third quarter of fiscal 2004. This decrease was attributable to a reduction in the amount of restricted stock compensation recognized during the quarter compared to the prior year, a reduction in expense related to the incentive bonus accrual, and a decrease in compensation expense related to net unrealized gains in the nonqualified deferred compensation plan.

Income from operations was 18.2% as a percentage of net sales for the fiscal quarter ended October 29, 2005, versus 16.9% for the quarter ended October 30, 2004. Other income during the third quarter of fiscal 2005 was up compared to the third quarter of fiscal 2004 due to an increase in income earned on the Company's cash and investments during the period resulting from higher interest rates. The aforementioned changes resulted in an overall increase of approximately 11.5% in our third quarter pretax net income compared to the third quarter of fiscal 2004.

Income tax expense for the period increased approximately 11.5% compared to the same period a year ago bringing second-quarter net income to 16.6 million or approximately 12% as a percentage of net sales.

Our press release also included the following selected balance sheet data as of October 29, 2005. Cash and investments of 155.2 million; inventory of 101.3 million; net property and equipment of 90.9 million; and accounts payable of 16.9 million. The Buckle currently operates 338 retail stores in 38 states compared with 329 stores in 38 states at this 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 that 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.