Buckle (BKE) Q2 2026 Earnings Call Transcript

Motley Fool Transcribing, The Motley FoolSat, August 22, 2026 at 12:28 AM UTC

0

Image source: The Motley Fool.

Friday, Aug. 21, 2026 at 10 a.m. ET

CALL PARTICIPANTS -

President and CEO - Dennis H. Nelson

Senior Vice President of Finance, Treasurer, and CFO - Thomas Heacock

Vice President of Finance and Corporate Controller - Adam J. Akerson

Senior Vice President, General Counsel, and corporate secretary - Brady Jenschke Fritz

TAKEAWAYS -

Net Income -- $44.4 million, or $0.87 per diluted share, representing a decrease from $45 million, or $0.89 per diluted share, in the prior year quarter.

Net Sales -- $319.8 million, an increase of 4.6% driven by broad-based strength in the women's business and higher average unit retail.

Comparable Store Sales -- Increased 2.1% in comparison to the same 13-week period in the prior year.

Online Sales -- $44.6 million, representing an increase of 2.3% year over year.

Average Unit Retail -- Increased approximately 4.5% during the second quarter.

Average Transaction Value -- Rose about 3.5% for the 13-week period, reflecting higher price points across key categories.

Units Per Transaction -- Decreased approximately 1% compared to the prior year second quarter.

Gross Margin -- 47.8% of net sales, a 40 basis point increase from 47.4% in the second quarter of 2025.

Merchandise Margins -- Improved by 110 basis points, which included a 65 basis point benefit from $2.5 million in tariff refunds.

Buying, Distribution, and Occupancy Costs -- Increased 70 basis points due to continued growth in new and relocated store locations.

Selling, General, and Administrative Expenses -- Rose to 30.4% of net sales from 29% in the prior year, driven by a 45 basis point increase in marketing and a 35 basis point increase in labor costs.

Operating Margin -- 17.4% for the quarter, compared to 18.4% in the second quarter of 2025.

Inventory -- $161.4 million at quarter end, an increase of 13.3% from the prior year to support growth and new locations.

Cash and Investments -- Totaled $323 million as of Aug. 1, 2026.

Capital Expenditures -- $29.8 million for the quarter, with year-to-date spending including $24.4 million for store construction and $20.1 million for corporate facilities and a replacement aircraft.

Women's Segment Sales -- Increased 9.5% year over year, accounting for 50% of total sales.

Women's Denim Sales -- Grew 11% during the quarter, with average price points rising to $92.50 from $85.35.

Alternative Pants Sales -- Increased almost 50% year over year within the women's business, driven by demand for prints and wider leg silhouettes.

Men's Segment Sales -- Remained essentially flat year over year, representing 50% of total company sales.

Men's Denim Sales -- Declined approximately 3.5% year over year due to softness in higher price point national brands.

Kids' Segment Sales -- Increased 11% during the quarter on top of a 23% increase in the second quarter of 2025.

Private Label Sales -- Represented 44.5% of total sales, an increase from 43.5% in the prior year second quarter.

Store Count -- Ended the quarter with 446 retail stores across 42 states.

Need a quote from a Motley Fool analyst? Email pr@fool.com

RISKS -

Akerson reported that "men's denim sales declined approximately 3.5% year over year," noting that the majority of the softness was concentrated in higher price point national brands.

Nelson noted that "the footwear business is difficult right now for most people," following a discussion regarding long-term volume declines in the category.

Management of The Buckle, Inc.(NYSE:BKE) reported that second quarter net sales increased 4.6% to $319.8 million, while net income slightly decreased to $44.4 million from the prior year. The women's segment grew 9.5% and now represents 50% of total sales, helping to balance flat performance in the men's business. Management stated that higher investments in marketing initiatives and store labor contributed to an increase in SG&A expenses, which rose to 30.4% of net sales. The company reported that merchandise margins benefited from $2.5 million in tariff refunds and a higher mix of private label products. Capital expenditures were focused on store expansions, technology upgrades, and the purchase of a replacement corporate aircraft to support operations.

Thomas Heacock stated that the company invested in "tooling for our marketing team to increase the data and the analytics and the insights" to support acquisition and retention efforts.

The company reported that alternative pants were the fastest-growing segment in the women's business, with growth driven by prints, colors, and wider leg silhouettes.

Management identified "Mini Me styling" as a meaningful driver of demand for the kids' business, which saw broad-based growth across denim and tops.

The company opened five new stores and completed five remodels during the quarter, including four relocations to outdoor shopping centers.

Merchandise margins improved 45 basis points during the quarter when excluding the one-time impact of tariff refunds.

Heacock noted that the $2.5 million in tariff refunds was mostly recognized in the second quarter, with a small remaining amount expected to flow into the third quarter.

INDUSTRY GLOSSARY -

UPT (Units Per Transaction): A retail metric that measures the average number of items purchased by a customer in a single transaction.

AUR (Average Unit Retail): The average price at which an individual item is sold during a specific period.

Private Label: Merchandise developed by the retailer and sold under its own exclusive brands, such as BKE or Buckle Black.

CTV (Connected TV): Advertising delivered through streaming services and devices connected to the internet rather than traditional cable.

Comparable Store Sales: A retail metric comparing sales from stores that have been open for at least one year to evaluate organic growth.

Merchandise Margin: The difference between the retail selling price of goods and the cost to acquire those goods, excluding occupancy and distribution costs.

Full Conference Call Transcript

Operator: Good morning, and thank you for standing by. And welcome to Buckle's Second Quarter Earnings Release Webcast. With instructions given at that time. Members of Buckle's management on the call today are Dennis H. Nelson, President and CEO; Thomas Heacock, Senior Vice President of Finance, Treasurer, and CFO; Adam J. Akerson, Vice President of Finance and Corporate Controller and Brady Jenschke 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 forward looking statements made on the call are pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 2000.

Actual results may differ materially due to risks 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 recording of the calls should not be relied upon as the information may be inaccurate. As a reminder, today's webcast is being recorded. And I would now like to turn the conference over to your host, Thomas Heacock.

Thomas Heacock: Good morning, and thanks for joining us this morning. Our 08/21/2026 press release reported that net income for the 13-week second quarter which ended 08/01/2026, was $44.4 million or $0.87 per share on a diluted basis which compares to net income of $45 million or $0.89 per share on a diluted basis for the prior year 13-week second quarter which ended 08/02/2025. Year to date net income for the 26 week period ended 08/01/2026, was $91.3 million or $1.79 per share on a diluted basis, which compares to net income of $80.2 million or $1.59 per share on a diluted basis for the prior year 26 week period ended 08/02/2025.

Net sales for the 13-week second quarter increased 4.6% to $320 million compared to net sales of $306 million for the prior year 13-week second quarter. Comparable store sales for the quarter increased 2.1% in comparison to the same 13-week period in the prior year and our online sales increased 2.3% to $44.6 million. Year to date, net sales increased 5.3% to $609 million compared to net sales of $578 million for the prior year 26 week fiscal period and comparable store sales for the year to date period increased 3.5% in comparison to the same 26 week period in the prior year and our online sales increased 2.5% to $92.2 million.

For both the quarter and year to date periods, UPTs decreased approximately 1% the average unit retail increased approximately 4.5%, and the average transaction value increased about 3.5%. Gross margin for the quarter was 47.8%, a 40 basis point increase from 47.4% in the second quarter of 2025. For the quarter, merchandise margins improved by 110 basis points which includes 65 basis points of impact from tariff refunds received during the quarter and was partially offset by a 70 basis point increase in buying distribution and occupancy expenses related to continued growth in the number of both new and relocated store locations.

Year to date, gross margin was 47.1%, consistent with the same period in the prior year, and during the period, a 55 basis point increase in merchandise margins was offset by a 55 basis point increase in buying distribution and occupancy expenses. Selling, general and administrative expenses for the quarter were 30.4% of net sales, compared to 29.0% for the second quarter of 2025. Year to date, SG&A was 28.1% of sales, compared to 29.8% for the same period in the prior year.

The second quarter increase was due to a 45 basis point increase in marketing expenses as we increased investments in initiatives aimed at driving guest acquisition and strengthening long term brand momentum, as well as a 35 basis point increase in store labor related expenses, a 30 basis point increase in health insurance benefits, a 20 basis point increase in store supplies, and a 45 basis point increase in certain other SG&A categories. These increases were partially offset by a 35 basis point reduction in incentive and equity compensation accrual. Our operating margin for the quarter was 17.4% compared to 18.4% for the second quarter of 2025.

And for the year to date period, our operating margin was 19%, compared to 17.3% for the same period last year. Income tax expense as a percentage of pretax net income for each of the current and prior year quarter and year to date periods was 24.5%. Our press release also included a balance sheet as of 08/01/2026, which included the following: inventory of $161 million up 13.3% from the same time a year ago, and $323 million of total cash and investments. We ended the quarter with $192 million in fixed assets net of accumulated depreciation, Our capital expenditures for the quarter were $29.8 million and depreciation expense was $6.9 million.

For the year to date period, capital expenditures were $44.5 million and depreciation expense was $13.4 million. to date capital spending is broken down as follows: $24.4 million for new store construction, store remodels and technology upgrades and $20.1 million for capital spending at the corporate headquarters and distribution center which includes the purchase of a new corporate aircraft as a replacement for the plane that was sold during fiscal 2025. During the quarter, we opened 5 new stores completed 5 full store remodels, 4 of which were relocations in new outdoor shopping centers and closed 1 store.

Following quarter end, we opened 1 additional new store, brings our year-to-date counts through to date to 9 new stores, 10 full remodels and 2 store closures. For the remainder of the year, we anticipate opening 5 additional new stores and completing 4 more full remodel projects. Buckle ended the quarter with 446 retail stores in 42 states, compared with 440 stores in 42 states at the end of the second quarter of 2025. And now I will turn the call over to Adam J. Akerson, our Vice President of Finance.

Adam J. Akerson: Thanks, Tom, and good morning. Our women's business continued its strong performance during the quarter, increasing 9.5% on top of an 18.5% increase in the second quarter of 2025. The women's business represented 50% of total sales for the quarter, up from 47.5% last year, reflecting broad based strength across key categories. Women's denim remained a standout performer, growing 11% year over year, supported by strong denim trends across a variety of leg openings and rises. Guests responded particularly well to the depth and versatility of the assortment, driving both unit and dollar growth with average denim price points increasing from $85.35 to $92.50 during the quarter.

Beyond traditional denim, the alternative pants category continued to be the fastest growing segment of the women's business, increasing almost 50% year over year. This growth was fueled by strong guest demand for prints and colors across a wide range of wider leg silhouettes. Women's tops also delivered a strong performance growing approximately 10 and a half percent year over year, led by fashion and graphic styles that paired well with wider leg and pattern bottoms. Additionally, women's shorts experienced strong selling during the quarter, accelerating in July as customers shopped the summer season and began preparing for back to school.

Our men's business delivered consistent performance during the quarter, with total sales remaining essentially flat to last year representing 50% of the total company sales compared to 52.5% in the prior year. While men's denim sales declined approximately 3.5% year over year, Private label denim outperformed the category as the majority of the softness was concentrated in higher price point national brands. Despite the shift in brand mix, average denim price points remained consistent at $89.20 versus $89.30 last year. Slight growth in our shorts category helped offset a portion of the denim decline, reflecting guests' positive response to our seasonal assortment.

Tops continued to be a bright spot within the men's business, growing 3.5% year over year, showcasing the strength and breadth of our assortment. Graphic tees performed particularly well across a variety of lifestyles, fabric weights, and designs while short sleeve woven shirts delivered strong results in both print and solid styles. Our expanded polo assortment also resonated with guests providing style options for a range of occasions. Strong selling in hoodies generated incremental sales growth during the quarter, reflecting consistent guest demand for casual and versatile apparel. On a combined basis, accessory sales for the quarter increased approximately 2.5% against the prior year, and footwear sales increased about 0.5%.

These 2 categories accounted for approximately 11.5% and 5% respectively of second quarter net sales for both fiscal 2025 and 2020. For the quarter, average accessory price points were up approximately 5% and average footwear price points were up 10%. Kids business delivered another outstanding quarter, increasing 11% on top of 23% increase in the second quarter of 2025. Growth was broad based across the category, led by strong performance in denim shorts and casual bottoms, and tees. Many of the same trends driving success in our adult business resonated well with kids and parents alike, as Mini Me styling remained a meaningful driver of demand.

For the quarter, denim accounted for approximately 35.5% of sales, and tops accounted for approximately 30.5% compares with 36%, and 29.5% for each in the second quarter of fiscal 2025. Our private label business for the quarter represented 44.5% of sales versus 43.5% for the second quarter of 2025, And with that, we welcome your questions.

Operator: Thank you. As a reminder for participants, if you would like Prior to asking your question, please state your name and affiliation. Our first question comes from Mauricio Serna from UBS. Please unmute your line and ask your question.

Mauricio Serna: Brett. Good morning. Thanks for taking our questions. Just going back to the comment on merchandise margin, I think you mentioned it was up 110 basis points. That included 65 basis points of tariff refunds. 2 part question, I guess. Like, what drove the other 45 basis points included in merchandise margin expansion? And just on the tariff refund, are you expecting any other tariff refunds going into the back half? And how are the tariff refunds being accounted for, like, in the balance sheet? At this point? Thank you.

Thomas Heacock: Yeah. Thank you, Mauricio. Thanks for the question. On the merchandise margins, the numbers that we gave merchandise margins for the quarter were up 110 basis points offset by about 65 basis points of tariff refund impact. So absolute, they were up 45 basis points without, or 45 basis points without the impact of tariff refunds. The driver of that was really a slight increase in private label. Private label was up about 100 basis points. You know, strong regular price selling, markdowns are down, really, really clean business there, and strong sell throughs of new product. And really pretty broad based.

Both men's and women's merchandise margins were up, just continue to work at it and find opportunities to grow that margin. So no 1 specific thing, kind of a combination of things. As far as tariff, all of the refunds that we expect to receive, were received. So we received a total of $2.5 million during the quarter. A little over $2 million was a credit to cost of goods sold to impact merchandise margins in Q2, and a small amount will flow into and a small amount will flow into Q3. So a little bit more impact, but most of it has been recognized.

Advertisement

Mauricio Serna: Got it. And thank you for that. A quick follow-up just on I think on the SG&A side, you have flagged 45 basis points of marketing deleverage Could you give us a sense of how much were marketing dollars up on a year over year and, like, you know, where are you seeing that, like, know, how are you feeling about that, you know, the return of that investment as you think about, like, you know, potential acceleration in the back half of the year?

Thomas Heacock: Yeah. I do not know that we will we will give out the dollar amount of how much it was up. It was 45 basis points, it was spread across a number of initiatives and really pretty broad based focused on both new to file and also retention. So when you look kind of at all of our programs, it was spread between CTV, Spotify, search, social creators, really all those things. We have increased our investment in all of them to, again, and email as well to really focus on, again, both retention and acquisition. So we have seen a nice response.

We are pleased with the response we have seen and have more plans to continue to review and build there. Going forward, Part of it in each of those channels, I mean, we are seeing cost increases from the providers, so that is a part of it too. it is not just increasing spend just to just to attract more guests, but costs are rising too. So that is part of it. And then we have also invested over the last several quarters in tooling for our marketing team to increase the data and the analytics and the insights that they have to really help drive our marketing programs going forward. So that is a part of it as well.

Mauricio Serna: Thank you so much.

Operator: Thank you. Our next question comes from John Bratz with Kansas City Capital. Please unmute your line and ask your question.

John Bratz: Tom, Adam, when you look at the results over the last year or so, women's business has been relatively stronger than the men's. And I am wondering if you could comment on that, maybe the relative weakness in the men's category versus the women.

Dennis H. Nelson: John, this is Dennis. I think the excitement with all the new product and fashion and the denim and casuals and the ladies doing a great job of doing collective groups for the top in the in our brands. Have really created excitement and grown their business substantially The men's has been more consistent and probably a little more weather sensitive, but it is a solid business, and we feel really good about the men's business as well.

John Bratz: Okay. And Dennis, do not want to nitpick or anything like that, but you know, it is been I look back at the numbers, 50 consecutive months of year over year declines in footwear volumes. And I know early on, you had some tough comps with, hey, dude. But is footwear being deemphasized at all? Is there you know, what might account for just the sort of the softness in footwear in the footwear category, or is it is it soft across the board in all footwear companies? Any thoughts on that?

Dennis H. Nelson: Well, the men's needs a strong brand like Hey Dudes or somebody like that to have huge volume, and it is still a steady business for us, but not where we had the big business several years ago where we had kind of exclusive styles in depth there. On the ladies business, it is pretty consistent and kind of depends on the fashion. But the men's will be a small part of our business until we hit the right new fashion item to drive it. And understanding is that the footwear business is difficult right now for most people.

John Bratz: Okay. Alright. Thank you, Dennis.

Dennis H. Nelson: Yes.

Operator: Our next question comes from Mauricio Serna with UBS Investment Bank. Please unmute your line and ask your question.

Mauricio Serna: Brett. Yeah, just a quick follow-up. I think you talked a little bit about back to school. there is been some talk about it being, like, a bit of a delay on that, and that might be weighing on you know, the retail environment. Any thoughts on that? Like, maybe you know, like, in July, that was a bit of a reason why it comes for a little bit relatively slow. Maybe that you are seeing some of some of that improvement as that spending shifted a little bit more towards August. So any comments on what you are seeing related to back to school would be very helpful. Thank you.

Dennis H. Nelson: I think each year, the tax freeze kind of change dates, which months they are in, and we hear certain states maybe start school a little later or a little earlier at different times. So it is over the total stores, it is difficult to call that out. But I know that creates some challenges for comps in certain markets But overall, it seems to average out most of the time.

Mauricio Serna: Thank you very much.

Operator: Thank you. As a reminder, if you would like to ask a question, There are no further questions. I will now hand the call back over to Buckle for any closing remarks. If there are no further questions, we will wrap up the call. Thank you everyone for participating. And have a wonderful rest of the day.

Should you buy stock in Buckle right now?

Before you buy stock in Buckle, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Buckle wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $432,189!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,330,956!*

Now, it’s worth noting Stock Advisor’s total average return is 967% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

See the 10 stocks »

*Stock Advisor returns as of August 21, 2026.

&&

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Original Article on Source

Source: “AOL Money”