Some interesting nuggets emerged from The Buckle’s second quarter earnings conference call, which I’m catching up on from last week.
While competitors are cutting prices left and right to move inventory, The Buckle has one of the lowest markdown rates the company has ever had and average price points have edged up.
For men’s denim, price points in the second quarter rose to $79.35 vs. $74 the same period last year. For women’s denim, average price points reached $80.55 vs. $78.50.
For all men’s merchandise categories, the average price point rose 9.5 percent to $32.20.
For all women’s merchandise, the average price point increased 1 percent to $35.75.
CEO Dennis Nelson said “…The customers have shown us that they are willing to pay for the right fashion looks and style so we see it as kind of a market driven situation with the brands providing quality, excitement, and newness that justify the price points. Then, we will try to do our best to get a great selection without going overboard on those.”
The Buckle, of course, has been one of the best performers in the retail sector. Analysts keep trying to figure out their secret, but Buckle executives stress there is no magic bullet. Rather, they say the company has been trying to do a better job on selection and service for a long time.
I had my own positive Buckle experience lately. I went into the Irvine Spectrum store to find a pair of jeans. The sales staff was extremely helpful, listening to my description of what I wanted, then bringing me several different brands, sizes and styles to try on.
I didn’t end of buying anything, but when I left, they gave me a little card that listed the styles and sizes I liked the most. It reminded me of Nordstrom service but in a smaller store.
Here are some more details from The Buckle’s second quarter.
Net income: up 89 percent to $22.3 million.
Net sales: up 36.6 percent to $169.8 million.
Same store sales: rose 27.8 percent.
Men’s sales: up 30 percent led by denim, wovens, knit tops and active apparel. “We’re real happy with the men’s business,” CEO Dennis Nelson said.
Women’s sales: up 33 percent led by denim, knit tops, active apparel and accessories.
Denim: accounted for 35 percent of sales. Strong brands include BKE, the Buckle’s brand, Big Star and MEK.
Accessories: up 32 percent.
Footwear: up 7.5 percent.
Private label: 25 percent of sales, down slightly from the same period last year.
Gross margin: 41.4 percent.
Inventory: Up 7.5 percent, but markdown levels down.
Total cash and investments at quarter end: $258.8 million.
Total stores currently: 382 in 39 states.
New stores planned for fiscal 2008: 21 new and 13 remodels costing $43 million to $44 million.
