The Buckle, Inc. Fourth Quarter 2026 Earnings Call - Women’s denim lifts comps as inventory and expansion pick up pace

Moderator, Call Moderator, The Buckle, Inc.: Good morning. Thank you for standing by, and welcome to Buckle’s fourth quarter earnings release webcast. As a reminder, all participants are currently in listen-only mode. A question and answer session will be conducted following the company’s prepared remarks with instructions given at that time. Members of Buckle’s management on the call are Dennis Nelson, president and CEO, Tom Heacock, senior vice president of finance, treasurer and CFO, Adam Akerson, vice president of finance and corporate controller, and Brady Fritz, senior vice president, general counsel, and corporate secretary. Before beginning, the company would like to reiterate its policy of not providing future sales or earnings guidance. All following statements made on the call are pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially due to risk and uncertainties described in the company’s SEC filings.

The company undertakes no obligation to publicly update or revise these statements except as required by law. Additionally, the company does not authorize the reproduction or dissemination of transcripts or audio recordings of the company’s quarterly conference calls without its express written consent. Any unauthorized reproductions or recordings of the calls should not be relied upon as the information may not be accurate. As a reminder, today’s webcast is recorded, and I would now like to turn the call over to Tom Heacock.

Tom Heacock, Senior Vice President of Finance, Treasurer, and CFO, The Buckle, Inc.: Good morning, and thanks for joining us this morning. Our March 13, 2026 press release reported that net income for the 13-week fourth quarter, which ended January 31, 2026, was $80.8 million or $1.59 per share on a diluted basis, which compares to net income of $77.2 million or $1.53 per share on a diluted basis for the prior year 13-week fourth quarter, which ended February 1, 2025. Net income for the 52-week fiscal year ended January 31, 2026, was $209.7 million or $4.14 per share on a diluted basis, which compares to net income of $195.5 million or $3.89 per share on a diluted basis for the prior year 52-week fiscal year, which ended February 1, 2025.

Net sales for the quarter increased 5.3% to $399.1 million compared to net sales of $379.2 million for the prior year. Comparable store sales for the quarter increased 3.9% in comparison to the same 13-week period in the prior year, and our online sales increased 6.4% to $74.2 million. Total sales for the full fiscal year increased 6.6% to $1.298 billion compared to net sales of $1.218 billion for the prior year. Comparable store sales for the year increased 5.6% in comparison to the same 52-week period in the prior year, and online sales increased 9.8% to $217.1 million.

For the quarter, UPTs decreased approximately 1.5%. The average unit retail increased approximately 5.5%, and the average transaction value increased about 3.5%. For the full year, UPTs decreased approximately 1%. The average unit retail increased approximately 3.5%, and the average transaction value increased about 2.5%. Gross margin for the quarter was 52.6%, consistent with the fourth quarter of 2024. For the quarter, merchandise margins increased 35 basis points, which was offset by increased buying distribution and occupancy expenses, which was down 35 basis points. Full year gross margin was 49%, up 30 basis points from 48.7% for the prior year.

The increase was the result of a 20 basis point increase in merchandise margins, along with 10 basis points of leverage buying distribution and occupancy expenses. Selling general administrative expenses for the quarter were 27.4% of sales, compared to 27.2% for the fourth quarter of 2024. For the full year, SG&A was 28.8% of net sales, compared to 28.9% in the prior year. The fourth quarter increase was due to a 30 basis point increase in marketing spend and a 20 basis point increase in G&A compensation related expenses, which were partially offset by a 10 basis point decrease in incentive compensation accruals and a 20 basis point decrease in other SG&A expense categories.

Our operating margin for the quarter was 25.2%, compared to 25.4% for the fourth quarter of fiscal 2024. For the full year, our operating margin was 20.2%, compared to 19.8% for the same period last year. Income tax expense as a percentage of pre-tax net income for the quarter was 23.3%, compared to 23.7% for the fourth quarter of 2024. For the full year, income tax expense as a percentage of pre-tax net income was 24%, compared to 24.2% in the prior year.

Our press release also included a balance sheet as of January 31, 2026, which included the following. Inventory of $139.5 million, which was up 15.5% from the same time a year ago, and $306.6 million of total cash and investments, which was after the payment of $225.1 million in dividends during the year. We ended the quarter with $162.4 million in fixed assets net of accumulated depreciation. Our capital expenditures for the quarter were $10.9 million, and depreciation expense was $7.2 million. For the full year, capital expenditures were $45.4 million, and depreciation expense was $25.4 million.

Full year capital spending was broken down as follows, $40.7 million for new store construction, store remodels, and technology upgrades, and $4.7 million for capital spending at the corporate headquarters and distribution center. During the quarter, we opened two new stores, completed five full store remodels, four of which were relocations into new outdoor shopping centers, and closed four stores, which brings our full year count for last year to six new stores, 20 full remodels, and seven store closures. Current plans for fiscal 2026 include the opening of 12-14 new stores and completing 12-14 full remodel projects, with at least half of the planned remodels being relocations into new outdoor centers. We have also closed one store so far year to date with no additional store closures currently planned.

Buckle ended the year with 440 retail stores in 42 states, compared with 441 stores in 42 states at the end of fiscal 2024. Now I’ll turn it over to Adam Akerson, our Vice President of Finance.

Adam Akerson, Vice President of Finance and Corporate Controller, The Buckle, Inc.: Thanks, Tom, and good morning. Q4 2025 marked the fifth consecutive quarter of double-digit growth for our women’s business, with merchandise sales increasing about 12% for the quarter. For the quarter, our women’s business represented approximately 46% of sales, which compares to 43% last year. The women’s denim category continued to be the driver of results, with denim up 10.5% year-over-year, and average denim price points increasing from $83.10 in the fourth quarter of fiscal 2024 to $90.20 in the fourth quarter of fiscal 2025. The rise in AUR reflects the exceptional performance of our Buckle Black label, which exceeded the growth of the overall denim category, together with notable momentum from other higher price point national brands.

We continued with planned increases to our denim inventory throughout the quarter to ensure we could support the heightened demand and service our guests not only in style and fits but also in sizes and inseams. We ended the quarter with a strong selection going into the new year. Building on our strong women’s denim offering, our team continued to deliver a fresh assortment for our guests. Our casual pants selection continued to provide a strong alternative bottom in a variety of prints and colors. We achieved growth across all women’s top categories, with the most notable growth in knits and sweaters. We also had strong performance in our outerwear and accessories business. In total, average women’s price points for the quarter increased approximately 6.5% from $51.55 to $54.95.

On the men’s side, merchandise sales were down about 0.5% against the prior year, representing approximately 54% of total sales compared to 57% a year ago. Our men’s denim business was down about 3.5% but was highlighted by slight growth in our key private label brands. Average denim price points increased about 0.5% from $86.30 in the fourth quarter of fiscal 2024 to $86.95 in the fourth quarter of fiscal 2025. In other categories, we saw growth in our knits and tees business, along with outerwear and accessories. For the quarter, overall average men’s price points increased approximately 4.5% from $56.30 to $58.80.

On a combined basis, accessory sales for the quarter increased approximately 3.5% against the prior year, while footwear sales were down about 3%. These two categories accounted for approximately 11% and 5%, respectively, of fourth quarter net sales, which is consistent with the same period a year ago. For the quarter, average accessory price points were up approximately 8%, and average footwear price points were up 8.5%. Together, our kids business delivered another standout quarter, growing approximately 16% year-over-year. This remains a key area of opportunity for growth in building the business and earning new guests from a young age.

For the quarter, denim accounted for approximately 44% of sales, and tops accounted for approximately 29.5%, which compares to 45% and 29% for each in the fourth quarter of fiscal 2024. Our private label business for the quarter represented 49.5% of sales versus 51% in the fourth quarter of 2024. This brings our full-year private label business to 47.5% of sales, which is consistent with a year ago. With that, we welcome your questions.

Moderator, Call Moderator, The Buckle, Inc.: Thank you. As a reminder for participants, if you would like to ask a question, please raise your hand in the Zoom app. Prior to asking your question, please state your name and firm affiliation. Again, if you would like to ask a question, please raise your hand using the Zoom application. We have a question from John. John, your microphone is unmuted.

John, Analyst: Good morning. Dennis?

Dennis Nelson, President and CEO, The Buckle, Inc.: Yes. Good morning, John.

John, Analyst: How are you?

Dennis Nelson, President and CEO, The Buckle, Inc.: Good. Thank you.

John, Analyst: It looks like you’re accelerating your store expansion plan. I think I heard 12-14 stores. Can you tell us a little bit about the strategy behind that?

Dennis Nelson, President and CEO, The Buckle, Inc.: Yeah, we’ve always taken an opportunity approach to our opening of stores, and we’ve been very successful with some of the premium and Tanger Outlets. We’ve looked at new opportunities there where a few years ago we weren’t as aggressive on outlets, but we found them to work very well for us. As the right ones come up, we’ve added that as well as a few select markets. Just with our success in several of the markets, that’s opened new opportunities for us. We look forward to those, as well as several of our relocations to outdoor centers and improvements in location in current malls that we’re in now, where we can expand as well.

John, Analyst: Okay. Adam, I keep reading reports about how strong the denim category is, you know, across the board and our office fashionista sort of confirms that. What’s driving the category? Is there something in particular that consumers are looking for?

Dennis Nelson, President and CEO, The Buckle, Inc.: I might take that again, John. As our ladies and women’s denim has grown, there’s a lot of new fashion. You know, we’ve had a lot of different bottom openings over the last couple years that have been great, different rises, finishes, and now the wide leg is added to it. It just gives us another fashion item to work with more of our traditional fits, and we continue to build our private brands along with our branded partners and just have a great selection of product. You know, we’ve expanded some of our sizes, inseams. We’ve just been aggressive on continuing to build that business, and the stores are really excited about the selection.

John, Analyst: Okay. One last question, Dennis. The kids category, the youth category doing very strong. Do all your stores have youth products? I know you had a couple stores that were maybe totally dedicated to youth sales. Do you still have those? Going back to the original question, do all your stores have youth product?

Dennis Nelson, President and CEO, The Buckle, Inc.: The majority of stores have a good selection of the youth. We have a small group that has mainly denim, jeans, and T-shirts. We have maybe 15% of the stores we do not have youth, usually because they don’t have enough room in their stores to hold their selection of men’s, women’s, and youth. Let’s see, what was the other part of the question?

John, Analyst: Do you still-

Dennis Nelson, President and CEO, The Buckle, Inc.: Oh, yeah. We used to have four youth stores at one time because we just needed more space for the product in those stores. They were very strong stores. We’ve expanded three of those stores and then put the youth back in with our regular store. We just have one separate youth store right now.

John, Analyst: Okay. All right. Thank you.

Dennis Nelson, President and CEO, The Buckle, Inc.: Yeah, thank you.

Moderator, Call Moderator, The Buckle, Inc.: Okay. We now have a question from, is it Henrik Nielsen?

Henrik Nielsen, Analyst: Yeah, that’s right. Can you hear me?

Moderator, Call Moderator, The Buckle, Inc.: Yes.

Henrik Nielsen, Analyst: Okay. Very good. Thank you. Thank you for the presentation on the update. Can you provide some information about your net cash flows as well, or you don’t do that in the updates here? Like, the net cash flow from the operating, investing, and financing activities.

Tom Heacock, Senior Vice President of Finance, Treasurer, and CFO, The Buckle, Inc.: This is Tom. We do not include cash flow in our press release. That’s typically just in our SEC filings.

Henrik Nielsen, Analyst: Okay. All right. Thanks.

Tom Heacock, Senior Vice President of Finance, Treasurer, and CFO, The Buckle, Inc.: Thank you.

Moderator, Call Moderator, The Buckle, Inc.: At this time, there are no further questions.

Tom Heacock, Senior Vice President of Finance, Treasurer, and CFO, The Buckle, Inc.: If there are no further questions, we can conclude the call. Thank you, everybody, for joining and participating, and have a great rest of the day and wonderful weekend.