The Buckle’s stellar year in fiscal 2007 surprised CEO Dennis Nelson.
During a conference call with investors this morning, Nelson said after a strong fall, the company felt good heading into the holiday season but was surprised just how well it turned out – especially since so many retailers had a tough fourth quarter.
“I expected we’d have a good year, I’ve felt good about our product and people…But I never guessed we’d have the sales increases that we had,” he said.
In the fourth quarter, net sales at The Buckle increased 18.3 percent to $207 million. For the full year, net sales increased 16.9 percent to $620 million.
Analysts on the call tried to pinpoint the reason The Buckle, with 370 stores in 38 states, is doing so well. Nelson did not have a definitive answer, but named several possible factors: more brands, a bigger variety of merchandise at different price points, and a wider age range of guests, i.e., older women, now shopping the stores for denim.
Speaking of price points, denim is a huge part of The Buckle’s business. In the fourth quarter, denim accounted for 45 percent of sales. For the year, denim accounted for 43 percent of sales. Price points rose in both time periods for men and women.
While many retailers have reported weakness in Southern California and Florida, The Buckle said its only soft area is some parts of Michigan. The company’s stores in Florida are relatively new, however.
A few more details from the call:
Fourth quarter net income: up 32 percent to $29.1 million
FY 2007 net income: up 35 percent to $75.2 million
Fourth quarter gross margins: 44.4 percent
FY 2007 gross margins: 41.1 percent.
Strong 2007 categories for women: Denim, wovens, knit tops, active apparel.
Strong 2007 categories for men: Denim, women and knit tops, sweaters and shorts.
No. of new stores planned for 2008: 19
