- Net Income Growth: Increased to $48.7M ($0.96 EPS) vs. $44.2M ($0.88 EPS) in Q3 2024.
- Net Sales Expansion: Rose 9.3% to $320.8M, with comp stores up 8.3% and online sales up 13.6% ($53M).
- Margin Improvements: Gross margin increased to 48% (up 30 bps), while operating margin rose to 19% (up 40 bps).
- Store Growth: Opened 2 new stores and completed 6 remodels, ending with 442 stores across 42 states.
- Women's Denim Momentum: Sales surged 17.5%, driving 19% overall growth in women's merchandise ($53M online).
Segment Performance
The women's business continued to accelerate, with merchandise sales increasing about 19%, led by denim, which rose approximately 17.5%. In contrast, men's merchandise sales were up about 1%, with denim sales also increasing by about 1%. According to Dennis Nelson, "guests seem excited about the product response," indicating a positive consumer reaction to Buckle's offerings.
Operational Highlights
Buckle ended the quarter with 442 retail stores in 42 states and $371.3 million of total cash and investments. The company opened 2 new stores and completed 6 full store remodels during the quarter. Inventory levels were at $165.8 million, up 11% from the same time a year ago, reflecting the company's efforts to support growing demand.
Valuation and Outlook
With a P/E Ratio of 13.54 and an EV/EBITDA of 10.29, Buckle's valuation appears reasonable. Analysts estimate next year's revenue growth at 2.6%, indicating a moderate pace. Buckle's strong denim business, particularly in women's denim, is expected to continue, with the company feeling "good about the consumer's health." The merchandise margin was down 10 basis points for Q3 due to a decrease in private label business and slight increases in costs related to tariffs and other flow-throughs.
Return Metrics and Dividend Yield
Buckle's return metrics remain impressive, with an ROE of 44.42% and an ROIC of 21.25%. The company's dividend yield stands at 7.01%, making it an attractive option for income investors. With a Free Cash Flow Yield of 7.4%, Buckle appears to be generating sufficient cash to support its dividend payments and potentially invest in growth initiatives.