THE BUCKLE, INC. FORM 10-K FEBRUARY 1, 2025
The Buckle, Inc. reported its fiscal year ended February 1, 2025, with net sales of $1.19 billion, a 4.5% increase from the prior year. The company’s net income was $123.8 million, a 10.3% decrease from the prior year, primarily due to increased operating expenses and a higher effective tax rate. The company’s diluted earnings per share (EPS) were $2.42, a 9.5% decrease from the prior year. The Buckle’s gross profit margin decreased to 34.1% from 35.3% in the prior year, primarily due to higher merchandise costs and occupancy expenses. The company’s operating expenses increased by 6.1% to $444.8 million, driven by higher store operating expenses and selling, general, and administrative expenses. The Buckle’s cash and cash equivalents decreased to $143.8 million from $173.8 million in the prior year, primarily due to the payment of dividends and share repurchases.
Financial Performance Overview
The Buckle, Inc. is a leading retailer of casual apparel, footwear, and accessories. In the fiscal year ended February 1, 2025, the company reported net sales of $1.218 billion, a 3.4% decrease from the prior year. Comparable store net sales also declined 2.7% during the year. The reduction in total net sales was primarily due to a 4.2% decrease in the number of transactions and a 2.0% decrease in the average number of units sold per transaction, partially offset by a 2.8% increase in the average unit retail price.
Revenue and Profit Trends
Fiscal 2024 Compared to Fiscal 2023:
- Net sales decreased 3.4% to $1.218 billion
- Comparable store net sales decreased 2.7%
- Online sales decreased 4.3% to $197.7 million
- Gross profit as a percentage of net sales decreased from 49.1% to 48.7%
- Income from operations decreased from $271.1 million to $241.4 million
- Net income decreased from $219.9 million to $195.5 million
Fiscal 2023 Compared to Fiscal 2022:
- Net sales decreased 6.3%
- Comparable store net sales decreased
- Gross profit as a percentage of net sales decreased from 50.3% to 49.1%
- Income from operations decreased from $327.8 million to $271.1 million
- Net income decreased from $254.6 million to $219.9 million
The decline in net sales and profitability over the past two fiscal years was driven by a combination of factors, including decreases in customer transactions and units sold per transaction, partially offset by higher average unit retail prices. Gross margin also contracted due to deleverage in occupancy, buying, and distribution expenses.
Strengths and Weaknesses
Strengths:
- Strong brand recognition and loyal customer base
- Ability to adjust merchandise mix and pricing to changing consumer preferences
- Solid financial position with $318.8 million in cash and investments as of February 1, 2025
- Consistent history of positive cash flow from operations
Weaknesses:
- Declining net sales and profitability over the past two fiscal years
- Increasing selling, general, and administrative expenses as a percentage of net sales
- Reliance on brick-and-mortar retail stores, which face ongoing industry challenges
The Buckle’s key strengths include its well-established brand, flexible merchandising strategy, and strong liquidity. However, the company has struggled with declining sales and profitability in recent years, driven by lower customer traffic and transactions. Increasing operating expenses have also put pressure on margins. To address these weaknesses, the company will need to find ways to drive traffic and sales, both in-store and online, while carefully managing costs.
Outlook and Future Prospects
Looking ahead, The Buckle plans to continue its store expansion and remodeling efforts, with 7 new stores expected to open and 18-22 store remodels/relocations planned for fiscal 2025. The company estimates total capital expenditures of $50-$55 million for the year, primarily for these store projects and technology investments.
Management believes the company’s existing cash, investments, and cash flow from operations will be sufficient to fund these capital expenditures and working capital requirements for the foreseeable future. However, future conditions could reduce the availability of funds, such as a decrease in product demand, changes in the competitive landscape, or general economic factors.
Overall, The Buckle faces a challenging retail environment, but its strong brand, flexible business model, and solid financial position provide a foundation for weathering near-term headwinds. Successful execution of its store expansion and remodeling plans, along with initiatives to drive traffic and sales, will be critical to returning the company to sustainable growth and profitability in the years ahead.
