Q2 2025 The Buckle Inc Earnings Call

August 23, 2024

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Speaker Change: Good morning, and thank you for standing by welcome to Buckles second quarter earnings release webcast as.

Unknown Executive: Good morning, and thank you for standing by. Welcome to Buckle's second quarter earnings release webcast. As a reminder, all participants are currently in a listen-only mode. A question and answer session will be conducted following the company's prepared remarks, with instructions given at that time.

Speaker Change: As a reminder, all participants are currently in a listen only mode. A question and answer session will be conducted following the company's prepared remarks with instructions given at that time.

Speaker Change: Members of Buckles management on the call today are Dennis Nelson, President and CEO, Tom Heacock, Senior Vice President of Finance.

Unknown Executive: Members of Buckle's management on the call today are Dennis Nelson, President and CEO; Tom Heacock, Senior Vice President of Finance, Treasurer, and CFO. Adam Akerson, Vice President of Finance and Corporate Controller. And Brady Fritz, Senior Vice President, General Counsel, and Corporate Secretary.

Treasurer and CFO.

Speaker Change: Adam Akerson, Vice President of finance and corporate controller and.

Speaker Change: And Brady Fritz Senior Vice President General Counsel and corporate Secretary.

Unknown Executive: As a review of operating results, they would like to reiterate their policy of not giving future sales or earnings guidance and have the following safe harbor statements. Safe harbor statement under the Private Securities Litigation Reform Act of 1995. All forward looking statements made by the company involve material risks and uncertainties and are subject to change based on factors which may be beyond the company's control. Accordingly, the company's future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. Such factors include, but are not limited to, those described in the company's filings with the Securities and Exchange Commission.

Speaker Change: As they review operating results they would like to reiterate their policy of not giving future sales or earnings guidance and have the following safe Harbor statement.

Speaker Change: Safe Harbor statement under the private Securities Litigation Reform Act of 1995.

Speaker Change: All forward looking statements made by the company involve material risks and uncertainties and are subject to change based on factors, which may be beyond the company's control.

Accordingly, the company's future performance and financial results may differ materially from those expressed or implied in any such forward looking statements. Such factors include but are not limited to those described in the company's filings with the Securities and Exchange Commission.

Unknown Executive: The company does not undertake to publicly update or revise any forward-looking statements, even if experience or future changes make it clear that any projected results expressed or impact plan will not be realized.

Speaker Change: The company does not undertake to publicly update or revise any forward looking statements, even if experience or future changes make it clear that any projected results expressed or implied and will not be realized.

Unknown Executive: Additionally, the company does not authorize the reproduction or dissemination of transcripts or audio recordings of the company's quarterly conference cause without its express or in consent. Any unauthorized reproductions or recordings of the cause should not be relied upon, as the information may be inaccurate.

Additionally, the company does not authorize the reproduction or dissemination of transcripts or audio recordings of the company's quarterly conference calls without its expressed written consent.

Unauthorized reproductions or recordings of the cause should not be relied upon as the information may be inaccurate.

Unknown Executive: As a reminder, today's webcast is being recorded, and I'd now like to turn the conference over to your host, Tom Heacock.

As a reminder, today's webcast is being recorded.

Speaker Change: I'd now like to turn the conference over to your host Tom Heacock.

Thomas Heacock: Good morning, and thanks for joining us this morning. Our August 23rd, 2024 press release reported that net income for the 13-week second quarter, which ended August 3rd, 2024, was 39.3 million, or 78 cents per share on a diluted basis, compared to net income of 45.6 million, or 92 cents per share on a diluted basis for the prior year, 13-week second quarter, which ended July 29th, 2023. Your today net income for the 26-week period ended August 3rd, 2024 was 74.1 million, or a dollar 48 per share on a diluted basis, compared to net income of 88.6 million, or a dollar 78 per share on a diluted basis for the prior year, 26-week period in a July 29th, 2023.

Tom Heacock: Good morning, and thanks for joining us this morning.

Tom Heacock: Our August 23rd 2024 press release reported that net income for the 13 week second quarter, which ended August three 2024 was 39.3 million or <unk> 78 per share on a diluted basis compared to net income of $45 6 million or <unk> 92 per share on a diluted basis for the <unk>.

Unknown Executive: Good morning, and thank you for standing by.

Unknown Executive: Good morning, and thank you for standing by. Welcome to Buckle's second quarter earnings release webcast. As a reminder, all participants are currently in a listen only mode. A question and answer session will be conducted following the company's prepared remarks with instructions given at that time.

Unknown Executive: Good morning, and thank you for standing by. Welcome to Buckle's second quarter earnings release webcast. As a reminder, all participants are currently in a listen only mode.

Unknown Executive: Welcome to Buckle's second quarter earnings release webcast.

Unknown Executive: As a reminder, all participants are currently in a listen only mode.

Unknown Executive: A question and answer session will be conducted following the company's prepared remarks with instructions given at that time.

Unknown Executive: A question and answer session will be conducted following the company's prepared remarks with instructions given at that time. Members of Buckle's management on the call today are Dennis Nelson, President and CEO Tom Heacock, Senior Vice President of Finance, Treasure and CFO. Adam Akerson, Vice President of Finance and Corporate Controller.

Unknown Executive: Members of Buckle's management on the call today are Dennis Nelson, President and CEO Tom Heacock, Senior Vice President of Finance, Treasure and CFO.

Unknown Executive: Members of Buckle's management on the call today are Dennis Nelson, President and CEO Tom Heacock, Senior Vice President of Finance, Treasure and CFO. Adam Akerson, Vice President of Finance and Corporate Controller.

Tom Heacock: Prior year 13 week second quarter, which ended July 29 2023.

Tom Heacock: Year to date net income for the 26 week period ended August three 2024, and was $74 1 million or $1 48 per share on a diluted basis compared to net income of $88 6 million or $1 78 per share on a diluted basis for the prior year 26 week period ended July 29 2023.

Unknown Executive: Adam Akerson, Vice President of Finance and Corporate Controller.

Unknown Executive: And Brady Fritz, Senior Vice President, General Counsel and Corporate Secretary.

Unknown Executive: And Brady Fritz, Senior Vice President, General Counsel and Corporate Secretary. As a review operating results, they would like to reiterate their policy of not giving future sales or earnings guidance and have the following safe harbor statements. Safe harbor statement under the private securities litigation reform act of 1995. All forward looking statements made by the company involve material risks and uncertainties and a subject to change based on factors which may be beyond the company's control.

Unknown Executive: As a review operating results, they would like to reiterate their policy of not giving future sales or earnings guidance and have the following safe harbor statements. Safe harbor statement under the private securities litigation reform act of 1995. All forward looking statements made by the company involve material risks and uncertainties and a subject to change based on factors which may be beyond the company's control.

Operator: SafeharborstatementunderthePrivateSecuritiesLitigationReformActof1995. Allforward-lookingstatementsmadebythecompanyinvolvematerialrisksanduncertaintiesandaresubjecttochangebasedonfactorswhichmaybebeyondthecompany'scontrol. Accordingly,thecompany'sfutureperformanceandfinancialresultsmaydiffermateriallyfromthoseexpressedorimpliedinanysuchforward-lookingstatements. Suchfactorsinclude,butarenotlimitedto,thosedescribedinthecompany'sfilingswiththeSecuritiesandExchangeCommission.

Thomas Heacock: Net sales for the 13-week second quarter decreased 3.4% to 282.4 million compared to net sales of 292.4 million for the prior year, 13-week second quarter. Comparable store sales for the 13-week fiscal quarter decreased 6.6% in comparison to the same 13-week period in the prior year, and online sales decreased 15.2% to 37 million for the 13-week fiscal quarter compared to 43.6 million for the prior year, 13-week fiscal quarter.

Tom Heacock: Net sales for the 13 week second quarter decreased three 4% to $282 4 million compared to net sales of $292 4 million for the prior year 13 week second quarter.

Tom Heacock: Comparable store sales for the 13 week fiscal quarter decreased six 6% in comparison to the same 13 week period in the prior year and our online sales decreased 15, 2% to $37 million for the 13 week fiscal quarter compared to $43 6 million for the prior year 13 week fiscal.

Unknown Executive: Accordingly, the company's future performance and financial results may differ materially from those expressed or implied in any such forward looking statements such factors include but are not limited to those described in the company's filings with the Securities and Exchange Commission. The company does not undertake to publicly update or revise any forward looking statements, even if experience or future changes make it clear that any projected results expressed or impact plan will not be realized.

Unknown Executive: The company does not undertake to publicly update or revise any forward looking statements, even if experience or future changes make it clear that any projected results expressed or impact plan will not be realized.

Operator: Thecompanydoesnotundertaketopubliclyupdateorreviseanyforward-lookingstatements,evenifexperienceorfuturechangesmakeitclearthatanyprojectedresultsexpressedorimpliedbythemwillnotberealized.

Tom Heacock: Quarter compared.

Thomas Heacock: Compared to the same 13-week period a year ago, online sales were down to 15%. Your today net sales decreased 5.3% to 544.9 million compared to net sales of 575.3 million for the prior year, 26-week fiscal period. Comparable source sales for the year-to-date period decreased 7.7% in comparison to the same 26-week period in the prior year. Online sales decreased 14.2% to 81.4 million for the year-to-date period compared to 94.9 million for the prior year 26-week fiscal period. Compared to the same 26-week period a year ago, online sales were down 14%.

Tom Heacock: Compared to the same 13 week period, a year ago online sales were down 15%.

Unknown Executive: Additionally, the company does not authorize the reproduction or dissemination of transcripts or audio recordings of the company's quarterly conference cause without its expressive or in consent. Any unauthorized reproductions or recordings of the cause should not be relied upon as the information may be inaccurate.

Operator: Additionally,thecompanydoesnotauthorizethereproductionordisseminationoftranscriptsoraudiorecordingsofthecompany'squarterlyconferencecallswithoutitsexpresswrittenconsent. Anyunauthorizedreproductionsorrecordingsofthecallsshouldnotberelieduponastheinformationmaybeinaccurate.

Tom Heacock: Year to date net sales decreased five 3% to $544 9 million compared to net sales of $575 3 million for the prior year 26 week fiscal period.

Unknown Executive: Any unauthorized reproductions or recordings of the cause should not be relied upon as the information may be inaccurate.

Comparable store sales for the year to date period decreased seven 7% in comparison to the same 26 week period in the prior year and online sales decreased 14, 2% to $81 4 million for the year to date period compared to $94 9 million for the prior year 26 week fiscal period.

Unknown Executive: As a reminder, today's webcast is being recorded and I'd now like to turn the conference over to your host Tom Heacock.

Tom Heacock: As a reminder, today's webcast is being recorded and I'd now like to turn the conference over to your host Tom Heacock. Good morning and thanks for joining us this morning. Our August 23rd, 2024 press release reported that net income for the 13-week second quarter which ended August 3rd, 2024 was 39.3 million or 78 cents per share on a diluted basis compared to net income of 45.6 million or 92 cents per share on a diluted basis for the prior year, 13-week second quarter which ended July 29th, 2023.

Thomas Heacock: As a reminder, today's webcast is being recorded and I'd now like to turn the conference over to your host Tom Heacock. Good morning and thanks for joining us this morning. Our August 23rd, 2024 press release reported that net income for the 13-week second quarter which ended August 3rd, 2024 was 39.3 million or 78 cents per share on a diluted basis compared to net income of 45.6 million or 92 cents per share on a diluted basis for the prior year, 13-week second quarter which ended July 29th, 2023.

Operator: Asareminder,today'swebcastisbeingrecorded.

Tom Hickau: AndI'dnowliketoturntheconferenceovertoyourhost,TomHickau.

Thomas Heacock: Good morning and thanks for joining us this morning.

Tom Hickau: Goodmorning,andthanksforjoiningusthismorning.

Thomas Heacock: Our August 23rd, 2024 press release reported that net income for the 13-week second quarter which ended August 3rd, 2024 was 39.3 million or 78 cents per share on a diluted basis compared to net income of 45.6 million or 92 cents per share on a diluted basis for the prior year, 13-week second quarter which ended July 29th, 2023.

Tom Hickau: OurAugust23rd,2024pressreleasereportedthatnetincomeforthe13-weeksecondquarter,whichendedAugust3rd,2024,was39.3million,or78centspershareonadilutedbasiscomparedtonetincomeof45.6million,or92centspershareonadilutedbasisfortheprioryear,13-weeksecondquarter,whichendedJuly29th,2023.

Tom Heacock: Compared to the same 26 week period, a year ago online sales were down 14%.

Tom Heacock: For the quarter U P. T decreased approximately one 5% the average unit retail increased approximately 2% and the average transaction value increased about 5%.

Thomas Heacock: The average unit retail increased approximately 2%, and the average transaction value increased about a half percent. Year-to-date UPP decreased approximately 3.5%; the average unit retail increased approximately 4%; and the average transaction value increased approximately a half percent. Gross margin for the quarter was 46.9%, down 40 basis points from 47.3% in the second quarter of 2023. The current quarter decline was the result of a 90 basis point increase in occupancy costs, along with a 20 basis point increase in distribution and buying costs, both of which were partially offset by a 70 basis point improvement in merchandise margins.

Tom Heacock: Year to date <unk> decreased approximately three 5% the average unit retail increased approximately 4% and the average transaction value increased approximately a half percent.

Tom Heacock: Your today net income for the 26-week period ended August 3rd, 2024 was 74.1 million or a dollar 48 per share on a diluted basis compared to net income of 88.6 million or a dollar 78 per share on a diluted basis for the prior year, 26-week period in a July 29th, 2023. Net sales for the 13-week second quarter decreased 3.4% to 282.4 million compared to net sales of 292.4 million for the prior year, 13-week second quarter.

Thomas Heacock: Your today net income for the 26-week period ended August 3rd, 2024 was 74.1 million or a dollar 48 per share on a diluted basis compared to net income of 88.6 million or a dollar 78 per share on a diluted basis for the prior year, 26-week period in a July 29th, 2023. Net sales for the 13-week second quarter decreased 3.4% to 282.4 million compared to net sales of 292.4 million for the prior year, 13-week second quarter.

Tom Hickau: Year-to-datenetincomeforthe26-weekperiodendedAugust3rd,2024,andwas74.1million,or$1.48pershareonadilutedbasiscomparedtonetincomeof88.6million,or$1.78pershareonadilutedbasisfortheprioryear,26-weekperiodendedJuly29th,2023.

Tom Heacock: Gross margin for the quarter was 46, 9% down 40 basis points from 47, 3% in the second quarter of 2023.

Thomas Heacock: Net sales for the 13-week second quarter decreased 3.4% to 282.4 million compared to net sales of 292.4 million for the prior year, 13-week second quarter.

Tom Hickau: Netsalesforthe13-weeksecondquarterdecreased3.4%to282.4millioncomparedtonetsalesof292.4millionfortheprioryear,13-weeksecondquarter. Comparablestoresalesforthe13-weekfiscalquarterdecreased6.6%incomparisontothesame13-weekperiodintheprioryear,andouronlinesalesdecreased15.2%to37millionforthe13-weekfiscalquarter,comparedto43.6millionfortheprioryear13-weekfiscalquarter.

Tom Heacock: The current quarter decline was the result of a 90 basis point increase in occupancy costs, along with a 20 basis point increase in distribution and buying costs, both of which were partially offset by a 70 basis point improvement in merchandise margins.

Tom Heacock: Comparable store sales for the 13-week fiscal quarter decreased 6.6% in comparison to the same 13-week period in the prior year and are online sales decreased 15.2% to 37 million for the 13-week fiscal quarter compared to 43.6 million for the prior year, 13-week fiscal quarter. Compared to the same 13-week period a year ago, online sales were down to 15%. Your today net sales decreased 5.3% to 544.9 million compared to net sales of 575.3 million for the prior year, 26-week fiscal period.

Thomas Heacock: Comparable store sales for the 13-week fiscal quarter decreased 6.6% in comparison to the same 13-week period in the prior year and are online sales decreased 15.2% to 37 million for the 13-week fiscal quarter compared to 43.6 million for the prior year, 13-week fiscal quarter. Compared to the same 13-week period a year ago, online sales were down to 15%. Your today net sales decreased 5.3% to 544.9 million compared to net sales of 575.3 million for the prior year, 26-week fiscal period.

Thomas Heacock: Year-to-date gross margin was 46.5%, down 70 basis points from 47.2% in the prior year. The year-to-date decline was the result of a 110 basis point increase in occupancy costs, and a 20 basis point increase in distribution and buying costs, which were partially offset by a 60 basis point improvement in merchandise margins. Selling general administrative expenses for the quarter were 29.8% of net sales, compared to 27.9% for the second quarter of 2023. And year-to-date SG&A was 29.9% of net sales, compared to 28% for the same period last year. The second quarter increase was due to a 125 basis point increase in store labor-related expenses, a 65 basis point increase related to digital commerce investments, a 25 basis point increase in marketing spend, a 25 basis point increase in GNA salaries, and a 35 basis point increase in certain other SG&A expense categories.

Tom Heacock: Year to date gross margin was 46, 5% down 70 basis points from 47, 2% in the prior year.

Tom Heacock: On a year to date decline was the result of 110 basis point increase in occupancy costs, and a 20 basis point increase in distribution and buying cost, which were partially offset by a 60 basis point improvement in merchandise margins.

Thomas Heacock: Compared to the same 13-week period a year ago, online sales were down to 15%.

Tom Hickau: Comparedtothesame13-weekperiodayearago,onlinesalesweredown15%. Year-to-datenetsalesdecreased5.3%to544.9millioncomparedtonetsalesof575.3millionfortheprioryear,26-weekfiscalperiod.

Selling general and administrative expenses for the quarter were 29, 8% of net sales compared to 27, 9% for the second quarter of 2023 and year to date SG&A was 29, 9% of net sales compared to 28% for the same period last year.

Thomas Heacock: Your today net sales decreased 5.3% to 544.9 million compared to net sales of 575.3 million for the prior year, 26-week fiscal period.

Tom Heacock: Comparable source sales for the year-to-date period decreased 7.7% in comparison to the same 26-week period in the prior year, an online sales decreased 14.2% to 81.4 million for the year-to-date period compared to 94.9 million for the prior year 26-week fiscal period compared to the same 26-week period a year ago, online sales were down 14%. The average unit retail increased approximately 2% and the average transaction value increased about a half percent. Year-to-day UPP decreased approximately 3.5%, the average unit retail increased approximately 4%, and the average transaction value increased approximately a half percent.

Thomas Heacock: Comparable source sales for the year-to-date period decreased 7.7% in comparison to the same 26-week period in the prior year, an online sales decreased 14.2% to 81.4 million for the year-to-date period compared to 94.9 million for the prior year 26-week fiscal period compared to the same 26-week period a year ago, online sales were down 14%. The average unit retail increased approximately 2% and the average transaction value increased about a half percent. Year-to-day UPP decreased approximately 3.5%, the average unit retail increased approximately 4%, and the average transaction value increased approximately a half percent.

Tom Hickau: Comparablesourcesalesfortheyear-to-dateperioddecreased7.7%incomparisontothesame26-weekperiodintheprioryear,andonlinesalesdecreased14.2%to81.4millionfortheyear-to-dateperiod,comparedto94.9millionfortheprioryear26-weekfiscalperiod. Comparedtothesame26-weekperiodayearago,onlinesalesweredown14%.

Tom Heacock: The second quarter increase was due to a 125 basis point increase in store labor related expenses.

Tom Heacock: 65 basis point increase related to digital commerce investments.

Tom Heacock: 25 basis point increase in marketing spend of 25 basis point increase in G&A salaries, and a 35 basis point increase in certain other SG&A expense categories.

Tom Hickau: Forthequarter,UPTsdecreasedapproximately1.5%,theaverageunitretailincreasedapproximately2%,andtheaveragetransactionvalueincreasedabout0.5%. Year-to-dateUPTsdecreasedapproximately3.5%,theaverageunitretailincreasedapproximately4%,andtheaveragetransactionvalueincreasedapproximately0.5%.

Thomas Heacock: These increases were partially offset by a 60 basis point decrease in incentive compensation accruals and a 25 basis point decrease in e-commerce shipping expenses. Our operating margin for the quarter was 17.1%, compared to 19.4% for the second quarter of fiscal 2023. And for the year-to-date period, our operating margin was 16.6%, compared to 19.2% for the same period last year. Income tax expense of the percentage of pre-tax net income for both the current and prior year fiscal quarter was 24.5%, bringing second quarter net income to 39.3 million for fiscal 2024, compared to 45.6 million for fiscal 2023.

Tom Heacock: These increases were partially offset by a 60 basis point decrease in incentive compensation accruals and a 25 basis point decrease in E Commerce shipping expenses.

Thomas Heacock: The average unit retail increased approximately 2% and the average transaction value increased about a half percent.

Thomas Heacock: Year-to-day UPP decreased approximately 3.5%, the average unit retail increased approximately 4%, and the average transaction value increased approximately a half percent.

Tom Heacock: Our operating margin for the quarter was 17, 1% compared to 19, 4% for the second quarter of fiscal 2023 and for the year to date period. Our operating margin was 16, 6% compared to 19, 2% for the same period last year.

Tom Hickau: Grossmarginforthequarterwas46.9%,down40basispointsfrom47.3%inthesecondquarterof2023. Thecurrentquarterdeclinewastheresultofa90basispointincreaseinoccupancycosts,alongwitha20basispointincreaseindistributionandbuyingcosts,bothofwhichwerepartiallyoffsetbya70basispointimprovementinmerchandisemargins.

Thomas Heacock: Gross margin for the quarter was 46.9%, down 40 basis points from 47.3% in the second quarter of 2023. The current quarter decline was the result of a 90 basis point increase in occupancy costs, along with a 20 basis point increase in distribution and buying costs, both of which were partially offset by a 70 basis point improvement in merchandise margins.

Tom Heacock: Gross margin for the quarter was 46.9%, down 40 basis points from 47.3% in the second quarter of 2023. The current quarter decline was the result of a 90 basis point increase in occupancy costs, along with a 20 basis point increase in distribution and buying costs, both of which were partially offset by a 70 basis point improvement in merchandise margins. Year-to-date gross margin was 46.5%, down 70 basis points from 47.2% in the prior year.

Tom Heacock: Income tax expense as a percentage of pretax net income for both the current and prior year fiscal quarter was 24, 5%, bringing second quarter net income to $39 3 million for fiscal 2024 compared to $45 6 million for fiscal 2023.

Thomas Heacock: Income tax expense of the percentage of pre-tax net income for both the current and prior year-to-date periods was also 24.5%, bringing year-to-date net income to 74.1 million in 2024, compared to 88.6 million in 2023. Our press release also included the balance sheet as of August 3rd, 2024, which included the following inventory of 131.4 million, down 3.4% from the same time a year ago, and 336.1 million in total cash and investments. We ended the quarter with 139.3 million and fixed assets net of accumulated depreciation. Our capital expenditures for the quarter were 11.5 million, and depreciation expense was 5.7 million. For the year-to-date period, capital expenditures were 22.3 million, and depreciation expense was 11.1 million.

Tom Heacock: Income tax expense as a percentage of pretax net income for both the current and prior year year to date periods was also 24, 5%, bringing year to date net income to $74 1 million in 2024 compared to $88 6 million in 2023.

Tom Hickau: Year-to-dategrossmarginwas46.5%,down70basispointsfrom47.2%intheprioryear. Theyear-to-datedeclinewastheresultof110basispointincreaseinoccupancycosts,anda20basispointincreaseindistributionandbuyingcosts,whichwerepartiallyoffsetbya60basispointimprovementinmerchandisemargins.

Thomas Heacock: Year-to-date gross margin was 46.5%, down 70 basis points from 47.2% in the prior year. The year-to-date decline was the result of 110 basis point increase in occupancy costs, and a 20 basis point increase in distribution and buying costs, which were partially offset by a 60 basis point improvement in merchandise margins.

Tom Heacock: The year-to-date decline was the result of 110 basis point increase in occupancy costs, and a 20 basis point increase in distribution and buying costs, which were partially offset by a 60 basis point improvement in merchandise margins. Selling general administrative expenses for the quarter were 29.8% of net sales, compared to 27.9% for the second quarter of 2023. And year-to-day SGNA was 29.9% of net sales, compared to 28% for the same period last year.

Thomas Heacock: The year-to-date decline was the result of 110 basis point increase in occupancy costs, and a 20 basis point increase in distribution and buying costs, which were partially offset by a 60 basis point improvement in merchandise margins. Selling general administrative expenses for the quarter were 29.8% of net sales, compared to 27.9% for the second quarter of 2023. And year-to-day SGNA was 29.9% of net sales, compared to 28% for the same period last year.

Tom Heacock: Our press release also included a balance sheet as of August three 2024, which included the following inventory of $131 4 million down three 4% from the same time, a year ago and $336 $1 million in total cash and investments.

Thomas Heacock: Selling general administrative expenses for the quarter were 29.8% of net sales, compared to 27.9% for the second quarter of 2023. And year-to-day SGNA was 29.9% of net sales, compared to 28% for the same period last year. The second quarter increase was due to a 125 basis point increase in store labor-related expenses, a 65 basis point increase related to digital commerce investments, a 25 basis point increase in marketing spend, a 25 basis point increase in GNA salaries, and a 35 basis point increase in certain other SGNA expense categories. These increases were partially offset by a 60 basis point decrease in incentive compensation accruals, and a 25 basis point decrease in e-commerce shipping expenses.

Tom Hickau: Sellinggeneraladministrativeexpensesforthequarterwere29.8%ofnetsales,comparedto27.9%forthesecondquarterof2023,andyear-to-dateSG&Awas29.9%ofnetsales,comparedto28%forthesameperiodlastyear. Thesecondquarterincreasewasdueto125basispointincreaseinstorelabor-relatedexpenses,a65basispointincreaserelatedtodigitalcommerceinvestments,a25basispointincreaseinmarketingspend,a25basispointincreaseinG&Asalaries,anda35basispointincreaseincertainotherSG&Aexpensecategories. Theseincreaseswerepartiallyoffsetbya60basispointdecreaseinincentivecompensationaccruals,anda25basispointdecreaseine-commerceshippingexpenses.

Tom Heacock: We ended the quarter with $139 3 million in fixed assets net of accumulated depreciation our capital expenditures for the quarter were $11 5 million and depreciation expense was $5 7 million.

Tom Heacock: The second quarter increase was due to a 125 basis point increase in store labor-related expenses, a 65 basis point increase related to digital commerce investments, a 25 basis point increase in marketing spend, a 25 basis point increase in GNA salaries, and a 35 basis point increase in certain other SGNA expense categories. These increases were partially offset by a 60 basis point decrease in incentive compensation accruals, and a 25 basis point decrease in e-commerce shipping expenses.

Thomas Heacock: The second quarter increase was due to a 125 basis point increase in store labor-related expenses, a 65 basis point increase related to digital commerce investments, a 25 basis point increase in marketing spend, a 25 basis point increase in GNA salaries, and a 35 basis point increase in certain other SGNA expense categories. These increases were partially offset by a 60 basis point decrease in incentive compensation accruals, and a 25 basis point decrease in e-commerce shipping expenses.

Tom Heacock: For the year to date period capital expenditures were $22 3 million and depreciation expense was $11 1 million.

Thomas Heacock: Year-to-day capital spending is broken down as follows: 21.8 million for new store construction, store remodels, and technology upgrades; and 0.5 million for capital spending at the corporate headquarters and distribution center.

Tom Heacock: Year to date capital spending is broken down as follows $21 8 million for new store construction store Remodels and technology upgrades and <unk> 5 million for capital spending at the corporate headquarters and distribution Center.

Thomas Heacock: During the quarter, we opened two new stores, completed seven full remodels, one of which was a relocation into a new outdoor shopping center, and closed two stores, which brings our year-to-date accounts to two new stores, 12 full remodels, and six store closures. For the remainder of the year, we plan on opening five additional new stores and completing six more full remodeling projects. Buckle ended the quarter with 440 retail stores in 42 states, which is consistent with the store count at the end of the second quarter of 2023. Now we'll turn it over to Adam Ackerson, our vice president of finance.

Tom Heacock: During the quarter, we opened two new stores completed seven full remodels, one of which was a relocation into our new outdoor shopping center and closed two stores, which brings our year to date count to two new stores 12, full remodels and stick six store closures.

Tom Hickau: Ouroperatingmarginforthequarterwas17.1%,comparedto19.4%forthesecondquarteroffiscal2023,andfortheyear-to-dateperiodouroperatingmarginwas16.6%,comparedto19.2%forthesameperiodlastyear.

Thomas Heacock: Our operating margin for the quarter was 17.1%, compared to 19.4% for the second quarter of fiscal 2023.

Tom Heacock: Our operating margin for the quarter was 17.1%, compared to 19.4% for the second quarter of fiscal 2023. And for the year-to-date period our operating margin was 16.6%, compared to 19.2% for the same period last year. Income tax expense of the percentage of pre-tax net income for both the current and prior year fiscal quarter was 24.5%, bringing second quarter net income to 39.3 million for fiscal 2024, compared to 45.6 million for fiscal 2023.

Thomas Heacock: Our operating margin for the quarter was 17.1%, compared to 19.4% for the second quarter of fiscal 2023. And for the year-to-date period our operating margin was 16.6%, compared to 19.2% for the same period last year. Income tax expense of the percentage of pre-tax net income for both the current and prior year fiscal quarter was 24.5%, bringing second quarter net income to 39.3 million for fiscal 2024, compared to 45.6 million for fiscal 2023.

Tom Heacock: For the remainder of the year, we plan on opening five additional new stores and completing six more full remodeling projects.

Thomas Heacock: And for the year-to-date period our operating margin was 16.6%, compared to 19.2% for the same period last year.

Tom Heacock: <unk> ended the quarter with 440 retail stores in 42 states, which is consistent with the store count at the end of the second quarter of 2023, and now I will turn it over to Adam Akerson, Our Vice President of finance. Thanks, Tom.

Tom Hickau: Incometaxexpenseofthepercentageofpre-taxnetincomeforboththecurrentandprioryearfiscalquarterwas24.5%,bringingsecondquarternetincometo$39.3millionforfiscal2024,comparedto$45.6millionforfiscal2023. Incometaxexpenseofthepercentageofpre-taxnetincomeforboththecurrentandprioryearyear-to-dateperiodswasalso24.5%,bringingyear-to-datenetincometo$74.1millionin2024,comparedto$88.6millionin2023.

Thomas Heacock: Income tax expense of the percentage of pre-tax net income for both the current and prior year fiscal quarter was 24.5%, bringing second quarter net income to 39.3 million for fiscal 2024, compared to 45.6 million for fiscal 2023. Income tax expense of the percentage of pre-tax net income for both the current and prior year-to-date periods was also 24.5%, bringing year-to-date net income to 74.1 million in 2024, compared to 88.6 million in 2023.

Adam Akerson: Thanks. Women's merchandise sales for the quarter were down about 3% against the prior year fiscal quarter and represented approximately 43.5% of total sales. On a 13-week comparable basis, women's merchandise sales were down approximately 5.5%. Average denim price points increased from $79.10 in the second quarter of fiscal 2023 to $80.60 in the second quarter of fiscal 2024, while overall average women's price points increased about a half a percent from $42.85 to $43.15. On the men's side, merchandise sales for the quarter were down about 3.5% against the prior year fiscal quarter, representing approximately 56.5% of total sales.

Adam Akerson: Women's merchandise sales for the quarter were down about 3% against the prior year fiscal quarter.

Adam Akerson: <unk> represented approximately 43, 5% of total sales.

Tom Heacock: Income tax expense of the percentage of pre-tax net income for both the current and prior year-to-date periods was also 24.5%, bringing year-to-date net income to 74.1 million in 2024, compared to 88.6 million in 2023. Our press release also included the balance sheet as of August 3rd, 2024, which included the following inventory of 131.4 million down 3.4% from the same time a year ago and 336.1 million in total cash and investments. We ended the quarter with 139.3 million and fixed assets net of accumulated depreciation.

Thomas Heacock: Income tax expense of the percentage of pre-tax net income for both the current and prior year-to-date periods was also 24.5%, bringing year-to-date net income to 74.1 million in 2024, compared to 88.6 million in 2023. Our press release also included the balance sheet as of August 3rd, 2024, which included the following inventory of 131.4 million down 3.4% from the same time a year ago and 336.1 million in total cash and investments. We ended the quarter with 139.3 million and fixed assets net of accumulated depreciation.

Adam Akerson: On a 13 week comparable basis women's merchandise sales were down approximately five 5%.

Adam Akerson: Average denim price points increased from $79.10 in the second quarter of fiscal 2023 to.

Unknown Executive: Net sales for the 13-week second quarter decreased 3.4% to 282.4 million, compared to net sales of 292.4 million for the prior year, 13-week second quarter.

Unknown Executive: If you look at selling selling is where the biggest dollar increase was during Q2, the bulk of that like we called out in the in the prepared remarks was was store payroll.

Adam Akerson: $80 60 in the second quarter of fiscal 2024, while overall average women's price points increased about a half a percent from $42 85 to $43 15.

Tom Hickau: OurpressreleasealsoincludedabalancesheetasofAugust3,2024,whichincludedthefollowing. Inventoryof$131.4million,down3.4%fromthesametimeayearago,and$336.1millionintotalcashandinvestments.

Thomas Heacock: Our press release also included the balance sheet as of August 3rd, 2024, which included the following inventory of 131.4 million down 3.4% from the same time a year ago and 336.1 million in total cash and investments. We ended the quarter with 139.3 million and fixed assets net of accumulated depreciation.

Unknown Executive: Comparable store sales for the 13-week fiscal quarter decreased 6.6% in comparison to the same 13-week period in the prior year, and are online sales decreased 15.2% to 37 million for the 13-week fiscal quarter, compared to 43.6 million for the prior year, 13-week fiscal quarter.

Unknown Executive: And so that's a combination of a couple different things.

Adam Akerson: On the men's side merchandise sales for the quarter were down about three 5% against the prior year fiscal quarter, representing approximately 56, 5% of total sales.

Adam Akerson: On a 13-week comparable basis, men's merchandise sales were down approximately 6.5%. Average denim price points decreased from $89.50 in the second quarter of fiscal 2023 to $89.20 in the second quarter of fiscal 2024. For the quarter, overall average men's price points increased approximately 2% from $49.25 to $50.20. On a combined basis, accessory sales for the 13-week quarter were down approximately 4% against the prior year 13-week comparable period, while footwear sales were down about 27%. These two categories accounted for approximately 11.5% in 5.5%, respectively, of the second quarter net sales, which compares to 11.5% in 7.5% for each in the second quarter of fiscal 2023.

On a 13 week comparable basis men's merchandise sales were down approximately six 5%.

Tom Heacock: Our capital expenditures for the quarter were 11.5 million and depreciation expense was 5.7 million for the year-to-day period capital expenditures were 22.3 million and depreciation expense was 11.1 million. Year-to-day capital spending is broken down as follows 21.8 million for new store construction store remodels and technology upgrades and 0.5 million for capital spending at the corporate headquarters and distribution center. During the quarter, we opened two new stores, completed seven full remodels, one of which was a relocation into a new outdoor shopping center and closed two stores, which brings our year-to-date accounts to two new stores, 12 full remodels and stick six store closures for the remainder of the year we plan on opening five additional new stores and completing six more full remodeling projects.

Thomas Heacock: Our capital expenditures for the quarter were 11.5 million and depreciation expense was 5.7 million for the year-to-day period capital expenditures were 22.3 million and depreciation expense was 11.1 million. Year-to-day capital spending is broken down as follows 21.8 million for new store construction store remodels and technology upgrades and 0.5 million for capital spending at the corporate headquarters and distribution center.

Adam Akerson: Average denim price points decreased from $89 50 in the second quarter of fiscal 2023 to $89 20 in the second quarter of fiscal 2024.

Unknown Executive: Compared to the same 13-week period a year ago, online sales were down to 15%.

Unknown Executive: I mean, we're looking at a little bit of different periods with the shift and the calendar and the fiscal period.

Unknown Executive: Year-to-date net sales decreased 5.3% to 544.9 million compared to net sales of 575.3 million for the prior year, 26-week fiscal period.

Adam Akerson: For the quarter overall average men's price points increased approximately 2% from $49 25.

Tom Hickau: Year-to-datecapitalspendingisbrokendownasfollows. $21.8millionfornewstoreconstruction,storeremodels,andtechnologyupgrades,and$0.5millionforcapitalspendingatthecorporateheadquartersanddistributioncenter. Duringthequarter,weopened2newstores,completed7fullremodels,1ofwhichwasarelocationintoanewoutdoorshoppingcenter,andclosed2stores,whichbringsouryear-to-datecountsto2newstores,12fullremodels,and6storeclosures.

Thomas Heacock: Year-to-day capital spending is broken down as follows 21.8 million for new store construction store remodels and technology upgrades and 0.5 million for capital spending at the corporate headquarters and distribution center. During the quarter, we opened two new stores, completed seven full remodels, one of which was a relocation into a new outdoor shopping center and closed two stores, which brings our year-to-date accounts to two new stores, 12 full remodels and stick six store closures for the remainder of the year we plan on opening five additional new stores and completing six more full remodeling projects.

Adam Akerson: To $50 in 'twenty.

Adam Akerson: On a combined basis accessory sales for the 13 week quarter were down approximately 4% against the prior year 13 week comparable period.

Unknown Executive: Comparable store sales for the year-to-date period decreased 7.7% in comparison to the same 26-week period in the prior year, and online sales decreased 14.2% to 81.4 million for the year-to-date period, compared to 94.9 million for the prior year, 26-week fiscal period. Compared to the same 26-week period a year ago, online sales were down 14%.

Thomas Heacock: During the quarter, we opened two new stores, completed seven full remodels, one of which was a relocation into a new outdoor shopping center and closed two stores, which brings our year-to-date accounts to two new stores, 12 full remodels and stick six store closures for the remainder of the year we plan on opening five additional new stores and completing six more full remodeling projects.

Adam Akerson: While footwear sales were down about 27% these.

Adam Akerson: These two categories accounted for approximately 11, 5% and five 5% respectively. In the second quarter net sales, which compares to 11, 5% and seven 5% for each in the second quarter of fiscal 2023.

Tom Hickau: Fortheremainderoftheyear,weplanonopening5additionalnewstoresandcompleting6morefullremodelingprojects.

Adam Akerson: For the quarter average accessory price points were up slightly while average footwear price points were up 5%.

Unknown Executive: For the quarter, UPTs decreased approximately 1.5%, the average unit retail increased approximately 2%, and the average transaction value increased about 1.5%. Year-to-date UPTs decreased approximately 3.5%, the average unit retail increased approximately 4%, and the average transaction value increased approximately 1.5%.

Tom Hickau: Buckleendedthequarterwith440retailstoresin42states,whichisconsistentwiththestorecountattheendofthesecondquarterof2023.

Thomas Heacock: Buckle ended the quarter with 440 retail stores in 42 states, which is consistent with the store count at the end of the second quarter of 2023 and now we'll turn it over to Adam Ackerson or vice president of finance.

Adam Akerson: Buckle ended the quarter with 440 retail stores in 42 states, which is consistent with the store count at the end of the second quarter of 2023 and now we'll turn it over to Adam Ackerson or vice president of finance. Thanks. Women's merchandise sales for the quarter were down about 3% against the prior year fiscal quarter and represented approximately 43.5% of total sales. On a 13 week comparable basis, women's merchandise sales were down approximately 5.5%.

For the quarter denim accounted for approximately 35, 5% of sales and tops accounted for approximately 30%.

Adam Ackerson: AndnowI'llturnitovertoAdamAckerson,ourVicePresidentofFinance.

Adam Akerson: Which compares to 33% and 30% for each in the second quarter of fiscal 2023.

Adam Akerson: Thanks.

Adam Akerson: Women's merchandise sales for the quarter were down about 3% against the prior year fiscal quarter and represented approximately 43.5% of total sales. On a 13 week comparable basis, women's merchandise sales were down approximately 5.5%. Average denim price points increased from $79.10 in the second quarter of fiscal 2023 to $80.60 in the second quarter of fiscal 2024, while overall average women's price points increased about a half a percent from $42.85 to $43.15.

Adam Akerson: Compared to the same 13 weeks a year ago, our combined denim categories continued to outperform the total business and were down about one 5%.

Unknown Executive: Gross margin for the quarter was 46.9%, down 40 basis points from 47.3% in the second quarter of 2023. The current quarter decline was the result of a 90 basis point increase in occupancy costs, along with a 20 basis point increase in distribution and buying costs, both of which were partially offset by a 70 basis point improvement in merchandise margins.

Adam Akerson: Denim built momentum throughout the quarter and was down just slightly in fiscal July.

Adam Ackerson: Averagedenimpricepointsincreasedfrom$79.10inthesecondquarteroffiscal2023to$80.60inthesecondquarteroffiscal2024,whileoverallaveragewomen'spricepointsincreasedabout0.5%from$42.85to$43.15.

Adam Akerson: Average denim price points increased from $79.10 in the second quarter of fiscal 2023 to $80.60 in the second quarter of fiscal 2024, while overall average women's price points increased about a half a percent from $42.85 to $43.15. On the men's side, merchandise sales for the quarter were down about 3.5% against the prior year fiscal quarter representing approximately 56.5% of total sales. On a 13 week comparable basis, men's merchandise sales were down approximately 6.5%.

Adam Akerson: We are particularly pleased with the performance of our women's denim business, being down just slightly for the quarter and up about four and a half percent in fiscal July. Our women's business also saw strength in other bottom categories, with growth in both casual fashion pants and shorts for the quarter. On a combined basis, our top categories were down about seven percent. Our men's shorts leave woven business with strong for the quarter, as were our women's basics and trend silhouettes. Additionally, we were pleased with the merchandise margin expansion for the quarter, even with down sales.

Adam Akerson: We are particularly pleased with the performance of our women's denim business being down just slightly for the quarter and up about four 5% in fiscal July.

Adam Akerson: Our women's business also saw strength in other bottom categories with growth in both casual fashion pants and shorts for the quarter.

Adam Akerson: On the men's side, merchandise sales for the quarter were down about 3.5% against the prior year fiscal quarter representing approximately 56.5% of total sales. On a 13 week comparable basis, men's merchandise sales were down approximately 6.5%.

Adam Akerson: On a combined basis, our tops categories were down about 7%.

Unknown Executive: Year-to-date gross margin was 46.5%, down 70 basis points from 47.2% in the prior year. The year-to-date decline was the result of 110 basis point increase in occupancy costs, and a 20 basis point increase in distribution and buying costs, which were partially offset by a 60 basis point improvement in merchandise margins.

Adam Akerson: Our men's short sleeved woven business was strong for the quarter as were our women's basics and trend silhouettes.

Adam Akerson: Additionally, we were pleased with the merchandise margin expansion for the quarter, even with down sales.

Adam Akerson: We continue to be excited about the performance, along with the depth, quality, and variety of our private brands for the quarter. Private label represented 43% of sales versus 41% in the second quarter of 2023.

Adam Akerson: Average denim price points decreased from $89.50 in the second quarter of fiscal 2023 to $89.20 in the second quarter of fiscal 2024.

Adam Akerson: Average denim price points decreased from $89.50 in the second quarter of fiscal 2023 to $89.20 in the second quarter of fiscal 2024. For the quarter, overall average men's price points increased approximately 2% from $49.25 to $50.20. On a combined basis, accessory sales for the 13 week quarter were down approximately 4% against the prior year 13 week comparable period, while footwear sales were down about 27%. These two categories accounted for approximately 11.5% in 5.5% respectively of the second quarter net sales, which compares to 11.5% in 7.5% for each in the second quarter of fiscal 2023.

Adam Akerson: We continue to be excited about the performance along with the depth quality and variety of our private brands for the quarter private label represented 43% of sales versus 41% in the second quarter of 2023.

Unknown Executive: Selling general administrative expenses for the quarter were 29.8% of net sales, compared to 27.9% for the second quarter of 2023. In year-to-date S-GNA was 29.9% of net sales, compared to 28% for the same period last year. The second quarter increase was due to a 125 basis point increase in store labor-related expenses, a 65 basis point increase related to digital commerce investments, a 25 basis point increase in marketing spend, a 25 basis point increase in GNA salaries, and a 35 basis point increase in certain other S-GNA expense categories. These increases were partially offset by a 60 basis point decrease in incentive compensation accruals and a 25 basis point decrease in e-commerce shipping expenses.

Adam Akerson: For the quarter, overall average men's price points increased approximately 2% from $49.25 to $50.20.

Adam Ackerson: Forthequarter,overallaveragemen'spricepointsincreasedapproximately2%from$49.25to$50.20.

Unknown Executive: With that, we welcome your questions. Thank you.

Adam Akerson: With that we welcome your questions.

Speaker Change: Thank you as a reminder for participants if you would like to ask a question. Please raise your hand and a zoom out prior to asking your questions. Please state your name and firm affiliation.

Adam Ackerson: Onacombinedbasis,accessorysalesforthe13-weekquarterweredownapproximately4%againsttheprioryear13-weekcomparableperiod,whilefootwearsalesweredownabout27%.

Adam Akerson: On a combined basis, accessory sales for the 13 week quarter were down approximately 4% against the prior year 13 week comparable period, while footwear sales were down about 27%.

Unknown Executive: As a reminder, for participants, if you would like to ask a question, please raise your hand in the Zoom out. Prior to asking your questions, please state your name and firm affiliation. Our first question is from Mauricio Serna.

Unknown Executive: So that was part of it that led to an increase in hours.

Speaker Change: Our first question is from Mauricio Serna, Mauricio well had an <unk> at this time.

Adam Akerson: These two categories accounted for approximately 11.5% in 5.5% respectively of the second quarter net sales, which compares to 11.5% in 7.5% for each in the second quarter of fiscal 2023. For the quarter, average accessory price points were up slightly, while average footwear price points were up 5%.

Adam Ackerson: Thesetwocategoriesaccountforapproximately11.5%and5.5%respectivelyofthesecondquarternetsales,whichcomparesto11.5%and7.5%foreachinthesecondquarteroffiscal2023. Forthequarter,averageaccessorypricepointswereupslightly,whileaveragefootwearpricepointswereup5%.

Unknown Executive: Mauricio, I will head and unmute you at this time.

Mauricio: Great.

Mauricio Serna: Great. Good morning, and thanks for taking my question I guess, just wanted to Calvert and more details on what is driving.

Mauricio: Good morning, and thanks for taking my question. I guess I just wanted to go a bit more detail from what is driving, you know, the online channel, significant underperformance, any particular initiatives that the company is doing there. And then on the merchandise margin, nice to see another quarter of expansion actually accelerating versus the previous quarter.

Adam Akerson: For the quarter, average accessory price points were up slightly, while average footwear price points were up 5%. For the quarter, denim accounted for approximately 35.5% of sales, and tops accounted for approximately 30%, which compares to 33% in 30% for each in the second quarter of fiscal 2023. We are particularly pleased with the performance of our women's denim business, being down just slightly for the quarter and up about four and a half percent in fiscal July.

Speaker Change: The online chat.

Speaker Change: <unk> significant underperformance any particular initiatives that the company is doing there and then on the.

Unknown Executive: But then also just to remain competitive, I mean, we've seen wage inflation and so, you know, wages for for teammates and for our managers to make sure that we're recruiting the best talent for for our stores and to take care of our guests has also been a part of that.

Adam Ackerson: Forthequarter,denimaccountedforapproximately35.5%ofsales,andtopsaccountedforapproximately30%,whichcomparesto33%and30%foreachinthesecondquarteroffiscal2023.

Adam Akerson: For the quarter, denim accounted for approximately 35.5% of sales, and tops accounted for approximately 30%, which compares to 33% in 30% for each in the second quarter of fiscal 2023.

Speaker Change: Merchandise margin no it's nice.

Speaker Change: Nice to see another quarter of expansion and actually accelerating versus the previous quarter. Maybe you could elaborate what is driving that in terms of maybe like more hire private private label penetration.

Unknown Executive: Our operating margin for the quarter was 17.1% compared to 19.4% for the second quarter of fiscal 2023 and for the year-to-date period operating margin was 16.6% compared to 19.2% for the same period last year.

Mauricio: Maybe you could elaborate, you know, what is driving that maybe in terms of maybe like more higher private private label penetration or cost controls or management around our emotions. I'll be super happy. Thank you.

Adam Ackerson: Comparedtothesame13weeksayearago,ourcombineddenimcategoriescontinuedtooutperformthetotalbusinessandweredownaboutoneandahalfpercent. DenimbuiltmomentumthroughoutthequarterandwasdownjustslightlyinfiscalJuly.

Speaker Change: <unk> or cost controls management around.

Speaker Change: Of our promotions that will be super helpful. Thank you.

Unknown Executive: Income tax expense of the percentage of pre-tax net income from both the current and prior year fiscal quarter was 24.5% bringing second quarter net income to 39.3 million for fiscal 2024 compared to 45.6 million for fiscal 2023. Income tax expense of the percentage of pre-tax net income from both the current and prior year-to-date periods was also 24.5% bringing year-to-date net income to 74.1 million in 2024 compared to 88.6 million in 2023.

Dennis Nelson: Good morning, Mauricio. I'll let Dennis take the merchandise margin question first, and then we'll jump into the store one question. Okay. Good morning. Our denim continues to be very good and sell through a newness, and we're having some nice margin expansion there, as well as our private brands continue to have solid demand and sell through. So that's been very good as well. The kids' margins are improved and just kind of overall, outside of footwear, we're very happy with the margin growth there. And then on the e-commerce initiatives, I mean, that's been a big priority for this year, you know that there was a gap between in-store performance and e-commerce performance last year and in the first part of this year.

Speaker Change: Good morning, Mauricio I'll, let Dennis take the merchandize margin question first and then we'll jump into the store one question.

Adam Ackerson: Wewereparticularlypleasedwiththeperformanceofourwomen'sdenimbusiness,beingdownjustslightlyforthequarterandupaboutfourandahalfpercentinfiscalJuly.

Speaker Change: Okay.

Speaker Change: Good morning.

Adam Ackerson: Ourwomen'sbusinessalsosawstrengthinotherbottomcategories,withgrowthinbothcasualfashionpantsandshortsforthequarter.

Adam Akerson: Our women's business also saw strength in other bottom categories with growth in both casual fashion pants and shorts for the quarter. On a combined basis, our tops categories were down about seven percent. Our men's shorts leave woven business with strong for the quarter, as were our women's basics and trend silhouettes. Additionally, we were pleased with the merchandise margin expansion for the quarter, even with down sales. We continue to be excited about the performance along with the depth quality and variety of our private brands for the quarter, private label represented 43% of sales versus 41% in the second quarter of 2023.

Speaker Change: Denim continues to be a very good and sell through in newness and we're having some nice <unk>.

Adam Akerson: On a combined basis, our tops categories were down about seven percent.

Adam Ackerson: Onacombinedbasis,ourtopscategoriesweredownaboutsevenpercent.

Dennis Nelson: Margin expansion, there as well as our private brands continue to have solid demand and.

Adam Ackerson: Ourmen'sshort-sleevedwovenbusinesswasstrongforthequarter,aswereourwomen'sbasicsandtrendsilhouettes.

Adam Akerson: Our men's shorts leave woven business with strong for the quarter, as were our women's basics and trend silhouettes.

Speaker Change: Sell through so that's been very good as well.

Adam Akerson: Additionally, we were pleased with the merchandise margin expansion for the quarter, even with down sales.

Adam Ackerson: Additionally,wewerepleasedwiththemerchandisemarginexpansionforthequarter,evenwithdownsales.

Speaker Change: The.

Unknown Executive: Our press release also included a balance sheet as of August 3, 2024, which included the following inventory of 131.4 million down 3.4% from the same time a year ago and 336.1 million in total cash and investments.

Speaker Change: Kids margins.

Adam Ackerson: Wecontinuetobeexcitedabouttheperformance,alongwiththedepth,quality,andvarietyofourprivatebrands. Forthequarter,privatelabelrepresented43percentofsalesversus41percentinthesecondquarterof2023.

Adam Akerson: We continue to be excited about the performance along with the depth quality and variety of our private brands for the quarter, private label represented 43% of sales versus 41% in the second quarter of 2023.

Speaker Change: Our improved and just kind of overall outside of footwear.

Speaker Change: We're very happy with the margin growth there.

Speaker Change: And then on the e-commerce initiatives I mean, thats been a big priority for this year, knowing that there was a gap between in store performance in E. Commerce E Commerce performance last year and in the first part of this year. So.

Adam Ackerson: Withthat,wewelcomeyourquestions.

Adam Akerson: With that, we welcome your questions.

Unknown Executive: With that, we welcome your questions. Thank you. As a reminder, for participants, if you would like to ask a question, please raise your hand in the zoom out. Prior to asking your questions, please state your name and firm affiliation.

Unknown Executive: With that, we welcome your questions.

Unknown Executive: We ended the quarter with 139.3 million in fixed assets net of accumulated depreciation. Our capital expenditures for the quarter were 11.5 million and depreciation expense was 5.7 million for the year-to-date period capital expenditures were 22.3 million and depreciation expense was 11.1 million. Year-to-date capital spending has broken down as follows, 21.8 million for new store construction, store remodels and technology upgrades, and 0.5 million for capital spending at the corporate headquarters and distribution center.

Operator: Thankyou.

Unknown Executive: Thank you.

Unknown Executive: Thank you. As a reminder, for participants, if you would like to ask a question, please raise your hand in the zoom out. Prior to asking your questions, please state your name and firm affiliation.

Operator: Asareminderforparticipants,ifyouwouldliketoaskaquestion,pleaseraiseyourhandintheZoomapp. Priortoaskingyourquestions,pleasestateyournameandfirmaffiliation.

Unknown Executive: As a reminder, for participants, if you would like to ask a question, please raise your hand in the zoom out.

Dennis Nelson: So at the start of the quarter, we engage third parties to come in and help us and assist our teams to really do a comprehensive review of our website focused on the shop ability of the site, looking at our analytics capabilities. And so throughout the quarter, we've made a lot of iterative improvements to the site as it relates to navigation, to filters, to check out. Part of displaying groupings, the next next iteration as folks and on onsite search, but we really feel like we've made a lot of improvements to the site itself, the shop ability of the site, the experience of a guest on the site and their ability to find product.

Speaker Change: The start of the quarter, we engaged third parties to come in and help us and assist our teams to really do a comprehensive review of our website focused on the shop ability of the site looking at our analytics capabilities and so throughout the quarter. We made a lot of iterative improvements to the site as it relates to navigation to filters to checkout.

Operator: OurfirstquestionisfromMauricioSerna.

Unknown Executive: Prior to asking your questions, please state your name and firm affiliation.

Mauricio Serna: Our first question is from Mauricio Serna.

Mauricio Serna: Our first question is from Mauricio Serna. Mauricio, I will head and unmute you at this time. Great.

Operator: Mauricio,I'llgoaheadandunmuteyouatthistime.

Unknown Executive: Mauricio, I will head and unmute you at this time.

Mauricio Serna: Great.

Operator: Great.

Mauricio Serna: Goodmorning,andthanksfortakingmyquestion.

Mauricio Serna: Good morning, and thanks for taking my question.

Mauricio Serna: Good morning, and thanks for taking my question. I guess I just wanted to go a bit more detail from what is driving, you know, the online channel, significant underperformance, any particular initiatives that the company is doing there. And then on the merchandise margin, nice to see another quarter of expansion actually accelerating versus the previous quarter. Maybe you could elaborate, you know, what is driving that maybe in terms of maybe like more higher private private label penetration or cost controls or management around our emotions. I'll be super happy. Thank you.

Unknown Executive: Good morning, and thanks for taking my question. I guess I just wanted to go a bit more detail from what is driving, you know, the online channel, significant underperformance, any particular initiatives that the company is doing there. And then on the merchandise margin, nice to see another quarter of expansion actually accelerating versus the previous quarter. Maybe you could elaborate, you know, what is driving that maybe in terms of maybe like more higher private private label penetration or cost controls or management around our emotions. I'll be super happy. Thank you.

Mauricio Serna: I guess I just wanted to go a bit more detail from what is driving, you know, the online channel, significant underperformance, any particular initiatives that the company is doing there.

Mauricio Serna: IguessIjustwantedtogetalittlebitmoredetailonwhatisdriving,youknow,theonlinechannel,significantunderperformance,anyparticularinitiativesthatthecompanyisdoingthere.

Speaker Change: Product display in groupings.

Speaker Change: Next iteration of that is focusing on onsite search, but we really feel like we've made a lot of improvements to the site itself the shop ability of the site the experience of our guests on the site and their ability to find product throughout the quarter that led to increases in conversion increases in a lot of onsite metrics in terms of positive interaction positive guest shop.

Unknown Executive: During the quarter we opened two new stores, completed seven full remodels, one of which was a relocation into a new outdoor shopping center, and closed two stores, which brings our year-to-date accounts to two new stores, 12 full remodels and stick six store closures.

Mauricio Serna: Andthenonthemerchandisemargin,youknow,it'snicetoseeanotherquarterofexpansionactuallyacceleratingversusthepreviousquarter. Maybeyoucouldelaborate,youknow,whatisdrivingthatintermsofmaybelikemorehigherprivatelabelpenetrationor,youknow,costcontrolsormanagementaroundpromotions.

Mauricio Serna: And then on the merchandise margin, nice to see another quarter of expansion actually accelerating versus the previous quarter.

Mauricio Serna: Maybe you could elaborate, you know, what is driving that maybe in terms of maybe like more higher private private label penetration or cost controls or management around our emotions.

Speaker Change: <unk> experience on the website also increase in IOP. So really the next version of where we're focusing as traffic I think we've talked in the first quarter traffic has been.

Unknown Executive: For the remainder of the year, we plan on opening five additional new stores and completing six more full remodeling projects.

Dennis Nelson: So really the next version of where we're focusing is traffic. I think we talked in the first quarter. Traffic has been challenged to the site during the quarter. We really reviewed our digital spend, marketing spend as it relates to driving traffic to e-commerce. A lot of it prior to probably mid July was focused on guest acquisition. We've really pivoted to and reallocated our budget and our dollars to a more balanced approach focus on retention and acquisition. And I think that's paid a lot of dividends. You don't necessarily see them the Q2 numbers, but we saw positive results in terms of traffic really late in the quarter as some of those initiatives kicked in.

Unknown Executive: Buckle ended the quarter with 440 retail stores in 42 states, which is consistent with the store count at the end of the second quarter of 2023, and now we'll turn it over to Adam Ackerson, our vice president of finance.

Unknown Executive: So those are really the two big one biggest driver there.

Mauricio Serna: I'llbesuperhappy.

Speaker Change: <unk> to the site during the quarter, we really reviewed our digital spend marketing spend as it relates to driving traffic and E. Com a lot of it prior to probably mid July was focused on guest acquisition, we've really pivoted to and reallocated our budget and our dollars to a more balanced approach focus on retention.

Operator: Thankyou.

Mauricio Serna: I'll be super happy.

Mauricio Serna: Thank you.

Dennis Nelson: Goodmorning,Mauricio.

Dennis Nelson: I'llletDennistakethemerchandisemarginquestionfirst,andthenwe'lljumpintotheSOAR1question.

Dennis Nelson: Good morning, Mauricio.

Dennis Nelson: Good morning, Mauricio. I'll let Dennis take the merchandise margin question first and then we'll jump into the store one question. Okay. Good morning. Our denim continues to be very good and sell through a newness and we're having some nice margin expansion there as well as our private brands continue to have solid demand and sell through. So that's been very good as well. The kids margins are improved and just kind of overall outside of footwear, we're very happy with the margin growth there.

Unknown Executive: Good morning, Mauricio.

Dennis Nelson: I'll let Dennis take the merchandise margin question first and then we'll jump into the store one question.

Dennis Nelson: I'll let Dennis take the merchandise margin question first and then we'll jump into the store one question. Okay.

Dennis Nelson: Okay.

Dennis Nelson: Goodmorning.

Dennis Nelson: Okay.

Unknown Executive: Thanks.

Unknown Executive: And then the other piece on the selling side like we called out was the third party relationship.

Dennis Nelson: Ourdenimcontinuestobeverygoodinsell-throughandnewness,andwe'rehavingsomenicemarginexpansionthere,aswellasourprivatebrandscontinuetohavesoliddemandandsell-through.

Dennis Nelson: Good morning.

Dennis Nelson: Good morning. Our denim continues to be very good and sell through a newness and we're having some nice margin expansion there as well as our private brands continue to have solid demand and sell through. So that's been very good as well. The kids margins are improved and just kind of overall outside of footwear, we're very happy with the margin growth there. And then on the e-commerce initiatives, I mean, that's been a big priority for this year, you know, known that there was a gap between in store performance and e-commerce performance last year and in the first part of this year.

Unknown Executive: Women's merchandise sales for the quarter were down about 3% against the prior year fiscal quarter and represented approximately 43.5% of total sales. On a 13 week comparable basis, women's merchandise sales were down approximately 5.5%. Average denim price points increased from $79.10 in the second quarter of fiscal 2023 to $80.60 in the second quarter of fiscal 2024, while overall average women's price points increased about a half a percent from $42.85 to $43.15.

Unknown Executive: To help help with our e-commerce.

Dennis Nelson: Our denim continues to be very good and sell through a newness and we're having some nice margin expansion there as well as our private brands continue to have solid demand and sell through.

Speaker Change: And acquisition and I think that's paid a lot of dividends you don't necessarily see it in the Q2 numbers.

Alan Glenn: Okay, our next question is from Alan.

Speaker Change: But we saw positive results in <unk>.

Unknown Executive: I don't know.

Speaker Change: A traffic really late in the quarter as some of those initiatives kicked in.

Dennis Nelson: So that's been very good as well.

Dennis Nelson: Sothat'sbeenverygoodaswell.

Speaker Change: Okay.

Dennis Nelson: Thekids'marginsareimproved,andjustkindofoveralloutsideoffootwear,we'reveryhappywiththemargingrowththere.

Dennis Nelson: The kids margins are improved and just kind of overall outside of footwear, we're very happy with the margin growth there.

Unknown Executive: There are no further questions in Q.

Speaker Change: There are no further questions in queue. As a reminder, if you would like to ask a question. Please raise your hand and the zoom app.

Unknown Executive: As a reminder, if you would like to ask a question, please raise your hand in the Zoom app. Looks like Mauricio has another question. Mauricio, go ahead and unmute you at this time.

Unknown Executive: On the men's side, merchandise sales for the quarter were down about 3.5% against the prior year fiscal quarter, representing approximately 56.5% of total sales. On a 13 week comparable basis, men's merchandise sales were down approximately 6.5%.

Speaker Change: It looks like Mauricio has another question Mauricio go ahead and meet you at this time.

Dennis Nelson: Andthenonthee-commerceinitiatives,Imean,that'sbeenabigpriorityforthisyear,youknow,knowingthattherewasagapbetweenin-storeperformanceande-commerceperformancelastyearandinthefirstpartofthisyear. Soatthestartofthequarter,weengagedthirdpartiestocomeinandhelpusandassistourteamstoreallydoacomprehensivereviewofourwebsite,focusontheshopabilityofthesite,lookingatouranalyticscapabilities.

Dennis Nelson: And then on the e-commerce initiatives, I mean, that's been a big priority for this year, you know, known that there was a gap between in store performance and e-commerce performance last year and in the first part of this year. So at the start of the quarter, we engage third parties to come in and help us and assist our teams to really do a comprehensive review of our website focused on the shop ability of the site, looking at our analytics capabilities.

Speaker Change: Okay.

Mauricio: Great. Yeah, I just had another follow up. Thank you, first of all, for answering the previous questions, maybe on the operating expenses. You know, I remember in last quarter, there was like a timing issue that led to like elevated growth in general and administrative expenses, but now I still see like it was up.

Mauricio Serna: Great Yeah, just had another follow up.

Unknown Executive: Decent.

Mauricio Serna: Thank you first of all for answering the previous questions maybe on <unk>.

Dennis Nelson: So at the start of the quarter, we engage third parties to come in and help us and assist our teams to really do a comprehensive review of our website focused on the shop ability of the site, looking at our analytics capabilities. And so throughout the quarter, we've made a lot of iterative improvements to the site as it relates to navigation to filters to check out. Part of displaying groupings, the next next iteration as folks and on onsite search, but we really feel like we've made a lot of improvements to the site itself, the shop ability of the site, the experience of a guest on the site and their ability to find product.

Unknown Executive: Average denim price points decreased from $89.50 in the second quarter of fiscal 2023 to $89.20 in the second quarter of fiscal 2024.

Speaker Change: Operating expenses in.

Speaker Change: I remember in last quarter, there was like a timing issue that led to like.

Speaker Change: Elevated growth in.

Dennis Nelson: Andsothroughoutthequarter,we'vemadealotofiterativeimprovementstothesiteasitrelatestonavigation,tofilters,tocheckout,productdisplayandgroupings,thenextiterationthatisfocusingonon-sitesearch. Butwereallyfeellikewe'vemadealotofimprovementstothesiteitself,theshopabilityofthesite,theexperienceofaguestonthesite,andtheirabilitytofindproduct.

Dennis Nelson: And so throughout the quarter, we've made a lot of iterative improvements to the site as it relates to navigation to filters to check out. Part of displaying groupings, the next next iteration as folks and on onsite search, but we really feel like we've made a lot of improvements to the site itself, the shop ability of the site, the experience of a guest on the site and their ability to find product. Throughout the quarter, you know, that led to increases in conversion, increases in a lot of onsite metrics in terms of positive interaction, positive guest shopping experience on the website also increase in AOV.

Speaker Change: General and administrative expenses, but not I still see like it was.

Unknown Executive: For the quarter, overall average men's price points increased approximately 2% from $49.25 to $50.20.

Mauricio: You know, total operating expenses were up 3.2%. You know, all increases involved in selling and general and administrative this time around. Just curious if you could elaborate a little bit more on what is driving that increase. You know, given that sales are still down and any initiatives at the companies doing there to manage down those expenses will be super helpful. Thank you.

Speaker Change: Total operating expenses were up three 2% increase.

Dennis Nelson: Part of displaying groupings, the next next iteration as folks and on onsite search, but we really feel like we've made a lot of improvements to the site itself, the shop ability of the site, the experience of a guest on the site and their ability to find product. Throughout the quarter, you know, that led to increases in conversion, increases in a lot of onsite metrics in terms of positive interaction, positive guest shopping experience on the website also increase in AOV.

Unknown Executive: On a combined basis, accessory sales for the 13-week quarter were down approximately 4% against the prior year, 13-week comparable period, while footwear sales were down about 27%.

Speaker Change: Increases in both in selling.

Speaker Change: And general and administrative this time around and just curious if you could elaborate a little bit more on what is driving that increase.

Speaker Change: Given that sales are still I still down and any initiatives that the company doing there too.

Unknown Executive: These two categories accounted for approximately 11.5% in 5.5% respectively of the second quarter net sales, which compares to 11.5% in 7.5% for each in the second quarter of fiscal 2023. For the quarter, average accessory price points were up slightly while average footwear price points were up 5%.

Dennis Nelson: Throughoutthequarter,youknow,thatledtoincreasesinconversion,increasesinalotofon-sitemetricsintermsofpositiveinteraction,positiveguestshoppingexperienceonthewebsite,alsoincreaseinAOV.

Dennis Nelson: Throughout the quarter, you know, that led to increases in conversion, increases in a lot of onsite metrics in terms of positive interaction, positive guest shopping experience on the website also increase in AOV. So really the next version of where we're focusing is traffic. I think we talked in the first quarter traffic has been challenged to the site during the quarter, we really reviewed our digital spend marketing spend as it relates to driving traffic to e-commerce.

Speaker Change: <unk> down those expenses that would be super helpful. Thank you.

Mauricio: Yeah, thank you, Mauricio.

Yes, Hi, Imari, So I mean, I think if you look at we look at it kind of in two different buckets, we look at the selling and the G&A I think the G&A was pretty consistent Q1 to Q2, I mean, the increases year over year. There are really the same things in home office payroll as the Big driver. There is just as we continue to invest in our team here if you look at selling.

Dennis Nelson: I mean, I think if you look at it, we look at it kind of in two different buckets. We look at the selling and the GNA. I think the GNA was pretty consistent Q1 to Q2. I mean, the increases year over year there are really the same things, and home office payroll is the big driver there. It is just as we continue to invest in our team here. If you look at selling, selling is where the biggest dollar increase was during Q2. The bulk of that, like we called out in the prepared remarks, was store payroll.

Dennis Nelson: Soreallythenextversionofwherewe'refocusingistraffic. Ithinkwetalkedinthefirstquarter,traffichasbeenachallengetothesite. Duringthequarter,wereallyreviewedourdigitalspend,marketingspendasitrelatestodrivingtraffictoe-comm.

Dennis Nelson: So really the next version of where we're focusing is traffic. I think we talked in the first quarter traffic has been challenged to the site during the quarter, we really reviewed our digital spend marketing spend as it relates to driving traffic to e-commerce. A lot of it prior to probably mid July was focused on guest acquisition. We've really pivoted to and reallocated our budget and our dollars to a more balanced approach focus on retention and acquisition.

Unknown Executive: For the quarter, denim accounted for approximately 35.5% of sales and tops accounted for approximately 30%, which compares to 33% and 30% for each in the second quarter of fiscal 2023. Compared to the same 13 weeks a year ago, our combined denim categories continued to outperform the total business and were down about 1.5%, denim built momentum throughout the quarter and was down just slightly in fiscal July.

Dennis Nelson: A lot of it prior to probably mid July was focused on guest acquisition.

Dennis Nelson: A lot of it prior to probably mid July was focused on guest acquisition. We've really pivoted to and reallocated our budget and our dollars to a more balanced approach focus on retention and acquisition. And I think that's paid a lot of dividends. You don't necessarily see them the Q2 numbers, but we saw positive results in terms of traffic really late in the quarter as some of those initiatives kicked in.

Dennis Nelson: Alotofitpriortoprobablymid-Julywasfocusedonguestacquisition. Wereallypivotedtoandreallocatedourbudgetandourdollarstoamorebalancedapproachfocusedonretentionandacquisition. AndIthinkthat'spaidalotofdividends. Youdon'tnecessarilyseeitintheQ2numbers,butwesawpositiveresultsintermsoftrafficreallylateinthequarterassomeofthoseinitiativeskickedin.

Speaker Change: Selling is where the biggest dollar increase was during Q2, the bulk of that like we called out in the in the prepared remarks was store payroll and so that's a combination of a couple of different things I mean, we're looking at a little bit of different periods with the shift in the calendar and the fiscal periods. So that was part of it that led to an increase in hours. But then also just to remain competitive I mean, we've seen wage in.

Dennis Nelson: We've really pivoted to and reallocated our budget and our dollars to a more balanced approach focus on retention and acquisition. And I think that's paid a lot of dividends.

Unknown Executive: There are no further questions in Q.

Dennis Nelson: And so that's a combination of a couple different things. I mean, we're looking at a little bit of different periods with the shift in the calendar and the fiscal period, so that was part of it that led to an increase in hours. But then also just to remain competitive. I mean, we've seen wage inflation, and so you know wages for teammates and for our managers to make sure that we're recruiting the best talent for our stores and to take care of our guests has also been a part of that. So those are really the two big one biggest driver there.

Dennis Nelson: And I think that's paid a lot of dividends. You don't necessarily see them the Q2 numbers, but we saw positive results in terms of traffic really late in the quarter as some of those initiatives kicked in. There are no further questions in Q. As a reminder, if you would like to ask a question, please raise your hand in the zoom app.

Dennis Nelson: You don't necessarily see them the Q2 numbers, but we saw positive results in terms of traffic really late in the quarter as some of those initiatives kicked in.

Speaker Change: <unk> is though.

Unknown Executive: We are particularly pleased with the performance of our women's denim business being down just slightly for the quarter and up about 4.5% in fiscal July. Our women's business also saw strength in other bottom categories with growth in both casual fashion pants and shorts for the quarter.

Operator: Therearenofurtherquestionsinqueue.

Speaker Change: Wages for for our teammates for our managers to make sure that we're recruiting the best talent for our stores and to take care of our guests has also been a part of that so those are really the two big one biggest driver there and then the other piece on the selling side like we called out was the third party relationship to help help with our e-commerce.

Operator: Asareminder,ifyouwouldliketoaskaquestion,pleaseraiseyourhandintheZoomapp.

Unknown Executive: There are no further questions in Q.

Dennis Nelson: And then the other piece on the selling side, like we called out, was the third party relationship to help help with our e-commerce.

Unknown Executive: As a reminder, if you would like to ask a question, please raise your hand in the zoom app.

Unknown Executive: On a combined basis, our tops categories were down about 7%.

Operator: LookslikeMauriciohasanotherquestion.

Mauricio Serna: Looks like Mauricio has another question.

Mauricio Serna: Looks like Mauricio has another question. Mauricio, go ahead and unmute you at this time. Great. Yeah, I just had another follow up. Thank you, first of all, for answering the previous questions, maybe on the operating expenses. You know, I remember in last quarter, there was like a timing issue that led to like elevated growth in general and administrative expenses, but now I still see like it was up. You know, a total operating expenses were up 3.2%, you know, all increases involved in selling and general and administrative this time around just curious if you could elaborate a little bit more on what is driving that increase. You know, given that sales are still are still down and any initiatives at the companies doing there to manage down those expenses will be super helpful. Thank you. Yeah, thank you, Mauricio.

Operator: Mauricio,I'llgoaheadandunmuteyouatthistime.

Mauricio Serna: Mauricio, go ahead and unmute you at this time.

Unknown Executive: Our men's shorts leave woven business was strong for the quarter as were our women's basics and trend silhouettes.

Mauricio Serna: Great.

Alan: Okay, our next question is from Alan. I'll go ahead and I'll meet you at this time. I don't need to be able to unmute. Oh, sorry about that.

Mauricio Serna: Yeah,Ijusthadanotherfollow-up.

Okay. Our next question is from Adam Adam I'll go ahead and meet you at this time.

Mauricio Serna: Thankyou,firstofall,foransweringthepreviousquestions.

Mauricio Serna: Great.

Mauricio Serna: Yeah, I just had another follow up.

Unknown Executive: Additionally, we were pleased with the merchandise margin expansion for the quarter, even with down sales.

Mauricio Serna: Thank you, first of all, for answering the previous questions, maybe on the operating expenses.

Mauricio Serna: Maybeontheoperatingexpenses,youknow,Irememberinlastquartertherewaslikeatimingissuethatledtolikeelevatedgrowthingeneralandadministrativeexpenses. ButnowIstillseelikeitwasup,youknow,liketotaloperatingexpenseswereup3.2%.

Unknown Executive: We continued to be excited about the performance along with the depth, quality, and variety of our private brands. For the quarter, private label represented 43% of sales versus 41% in the second quarter of 2023.

Mauricio Serna: You know, I remember in last quarter, there was like a timing issue that led to like elevated growth in general and administrative expenses, but now I still see like it was up.

Adam Akerson: And then you should be able to mute.

Mauricio Serna: You know, a total operating expenses were up 3.2%, you know, all increases involved in selling and general and administrative this time around just curious if you could elaborate a little bit more on what is driving that increase.

Oh, sorry about that.

Unknown Executive: With a reminder for participants, if you would like to ask a question, please raise your hand in the zoom app. Prior to asking your questions, please state your name and firm affiliation.

Unknown Executive: Go ahead and I'll meet you at the time.

Mauricio Serna: Youknow,smallincreasesinvolvedinsellingandgeneralandadministrativethistimearound.

Alan: Can you hear me now? Yes, thank you.

Adam Akerson: Can you hear me now yes, yes. Thank you.

Dennis Nelson: Yes, with the five stores that you're in, new stores you're opening are those in areas now that aren't served or haven't been served previously by a store that may have been closed. We have one new store we just opened this week in California. That is, you know, an un-served market for us. The four other stores later this year are in the markets we are in. But we feel we'll be good additions or not distract too much from any of our other business that they should be very good long-term investments.

Adam Akerson: As with the five stores that new your new stores, you're opening are those in.

Mauricio Vega: Our first question is from Mauricio Serna.

Unknown Executive: I don't know you should be able to unmute.

Mauricio Serna: I'mjustcuriousifyoucouldelaboratealittlebitmoreonwhatisdrivingthatincrease,youknow,giventhatsalesarestilldownandanyinitiativesthatthecompany'sdoingtheretomanagedownthoseexpenses.

Adam Akerson: Areas now that arent served or haven't been served previously by a store that may have been closed.

Unknown Executive: Oh, sorry about that.

Mauricio Serna: You know, given that sales are still are still down and any initiatives at the companies doing there to manage down those expenses will be super helpful.

Unknown Executive: Mauricio, I'll go ahead and unmute you at this time.

Unknown Executive: Can you hear me now?

Adam Akerson: Yes.

Speaker Change: We have one new store, we just opened this week in California.

Mauricio Serna: Thatwouldbesuperhelpful.

Mauricio Serna: Thank you.

Unknown Executive: Great.

Alan Glenn: Yes, thank you.

Mauricio Serna: Thankyou.

Mauricio Serna: Yeah, thank you, Mauricio.

Operator: Yeah,thankyou,Mauricio.

Dennis Nelson: Imean,Ithinkifyoulookat–welookatitkindofintwodifferentbuckets.

Speaker Change: That is you know an unserved market for us.

Dennis Nelson: I mean, I think if you look at we look at it kind of in two different buckets.

Unknown Executive: I mean, I think if you look at we look at it kind of in two different buckets. We look at the selling and the GNA. I think the GNA was pretty consistent Q1 to Q2. I mean, the increases year over year there are really the same things and home office payroll is the big driver there is just as we continue to invest in our team here. If you look at selling selling is where the biggest dollar increase was during Q2, the bulk of that like we called out in the in the prepare remarks was was store payroll.

Dennis Nelson: We look at the selling and the GNA.

Dennis Nelson: WelookatthesellingandtheG&A.

Dennis Nelson: I think the GNA was pretty consistent Q1 to Q2.

Dennis Nelson: IthinktheG&AwasprettyconsistentQ1toQ2. Imean,theincreasesyearoveryeartherearereallythesamethings.

Speaker Change: The or other stores later this year or in.

Dennis Nelson: I mean, the increases year over year there are really the same things and home office payroll is the big driver there is just as we continue to invest in our team here.

Speaker Change: The markets we are in.

Dennis Nelson: Andhomeofficepayrollisthebigdrivertherejustaswecontinuetoinvestinourteamhere.

Speaker Change: But we feel will be good additions or not distract too much from any of our other business that they should be very good long term.

Dennis Nelson: If you look at selling selling is where the biggest dollar increase was during Q2, the bulk of that like we called out in the in the prepare remarks was was store payroll. And so that's a combination of a couple different things.

Dennis Nelson: Ifyoulookatselling,sellingiswherethebiggestdollarincreasewasduringQ2.

Dennis Nelson: Thebulkofthat,likewecalledoutinthepreparedremarks,wasstorepayroll.

Speaker Change: Investments.

Dennis Nelson: One of them might make a change after the first year of a store taking over from another store, but basically new markets on those.

Speaker Change: One of them.

Unknown Executive: And so that's a combination of a couple different things. I mean, we're looking at a little bit of different periods with the shift in the calendar and the fiscal period, so that was part of it that led to an increase in hours. But then also just to remain competitive. I mean, we've seen wage inflation and so you know wages for for teammates and for our managers to to make sure that we're recruiting the best talent for for our stores and to take care of our guests has also been a part of that. So those are really the two big one biggest driver there. And then the other piece on the selling side like we called out was the third party relationship to help help with our e-commerce.

Dennis Nelson: Andsothat'sacombinationofacoupledifferentthings.

Might make a change after the first of the year of the.

Dennis Nelson: I mean, we're looking at a little bit of different periods with the shift in the calendar and the fiscal period, so that was part of it that led to an increase in hours.

Dennis Nelson: Imean,we'relookingatalittlebitofdifferentperiodswiththeshiftinthecalendarandthefiscalperiod.

Dennis Nelson: Sothatwaspartofitthatledtoanincreaseinhours.

Speaker Change: Of the store, taking a over from another store, but but basically new markets on those.

Dennis Nelson: But then also just to remain competitive.

Dennis Nelson: Butthenalsojusttoremaincompetitive,Imean,we'veseenwageinflation.

Dennis Nelson: I mean, we've seen wage inflation and so you know wages for for teammates and for our managers to to make sure that we're recruiting the best talent for for our stores and to take care of our guests has also been a part of that.

Mauricio Vega: Good morning and thanks for taking my question.

Dennis Nelson: Andso,youknow,wagesforourteammatesandforourmanagerstomakesurethatwe'rerecruitingthebesttalentforourstoresandtotakecareofourguestshasalsobeenapartofthat.

Alan Glenn: Yes, with with the five stores that your new stores you're opening are those in areas now that aren't served or haven't been served previously by a store that may have been closed.

Unknown Executive: We have one new store we just opened this week in California.

Unknown Executive: There are no further questions in queue.

Speaker Change: There are no further questions in queue. As a reminder, if you would like to ask a question. Please raise your hand and the zoom app.

Unknown Executive: That is, you know, an un-served market for us.

Dennis Nelson: So those are really the two big one biggest driver there.

Dennis Nelson: Sothosearereallythetwobigoronebiggestdriverthere.

Unknown Executive: The four other stores later this year are in the markets we are in, but we feel will be good additions or not distract too much from any of our other business.

Unknown Executive: As a reminder, if you would like to ask a question, please raise your hand in the Zoom app.

Dennis Nelson: And then the other piece on the selling side like we called out was the third party relationship to help help with our e-commerce.

Dennis Nelson: Andthentheotherpieceonthesellingside,likewecalledout,wasthethirdpartyrelationshiptohelpwithoure-commerce.

Speaker Change: Okay.

Unknown Executive: There are no further questions.

Speaker Change: There are no further questions.

Alan Glenn: Okay,ournextquestionisfromAlan.

Alan Glenn: Okay, our next question is from Alan.

Alan Glenn: Okay, our next question is from Alan. I'll go ahead and I'll meet you at this time. I don't need to be able to unmute. Oh, sorry about that. Can you hear me now? Yes, thank you. Yes, with with the five stores that you're in new stores you're opening are those in areas now that aren't served or haven't been served previously by a store that may have been closed. We have one new store we just opened this week in California.

Alan Glenn: Okay, our next question is from Alan. I'll go ahead and I'll meet you at this time. I don't need to be able to unmute. Oh, sorry about that. Can you hear me now? Yes, thank you.

Unknown Executive: I can go ahead and turn it back over to the buckle for any closing works. Well, thank you for participating today.

Alan Glenn: I'll go ahead and I'll meet you at this time.

Speaker Change: I can go ahead and turn it back over to the bubble for any closing remarks.

Speaker Change: Well. Thank you for participating today, if there are no further and further questions. We can wrap up the call. We thank everyone for participating and hope you all enjoy the rest of the day.

Unknown Executive: They should be very good long term investments.

Unknown Executive: If there are no further questions, we can wrap up the call.

Alan Glenn: Alan,I'llgoaheadandunmuteyouatthistime. Alan,youshouldbeabletounmute.

Unknown Executive: We thank everyone for participating and hope you all enjoy the rest of the day.

Speaker Change: Okay.

Speaker Change: Goodbye.

Mauricio Vega: I guess I just wanted to go a bit more detail from what is driving the online channel significant underperformance, any particular initiatives that the company is doing there.

Unknown Executive: One of them might make a change after the first the year of a store taking a over from another store, but basically new markets on those.

Alan Glenn: I don't need to be able to unmute.

Alan Glenn: Oh,sorryaboutthat.

Alan Glenn: Oh, sorry about that.

Alan Glenn: Canyouhearmenow?

Alan Glenn: Can you hear me now?

Alan Glenn: Yes,thankyou.

Alan Glenn: Yes, thank you.

Mauricio Vega: Then on the merchandise margin, it's nice to see another quarter of expansion actually accelerating versus the previous quarter.

Alan Glenn: Yes,withthefivestoresthatyournewstoresyou'reopening,arethoseinareasnowthataren'tservedorhaven'tbeenservedpreviouslybyastorethatmayhavebeenclosed? WehaveonenewstorewejustopenedthisweekinCaliforniathatis,youknow,anunservedmarketforus.

Alan Glenn: Yes, with with the five stores that you're in new stores you're opening are those in areas now that aren't served or haven't been served previously by a store that may have been closed.

Unknown Executive: Yes, with with the five stores that you're in new stores you're opening are those in areas now that aren't served or haven't been served previously by a store that may have been closed. We have one new store we just opened this week in California. That is, you know, an un-served market for us. The four other stores later this year are in the markets we are in. But we feel we'll be good additions or not distract too much from any of our other business that they should be very good long term investments. One of them might make a change after the first year of a store taking over from another store but basically new markets on those.

Dennis Nelson: We have one new store we just opened this week in California.

Dennis Nelson: That is, you know, an un-served market for us.

Alan Glenn: That is, you know, an un-served market for us. The four other stores later this year are in the markets we are in. But we feel we'll be good additions or not distract too much from any of our other business that they should be very good long term investments. One of them might make a change after the first year of a store taking over from another store but basically new markets on those. There are no further questions in queue. As a reminder, if you would like to ask a question, please raise your hand in the Zoom app.

Alan Glenn: Thefourotherstoreslaterthisyearareinthemarketswearein,butwefeelwillbegoodadditionsornotdistracttoomuchfromanyofourotherbusiness,thattheyshouldbeverygoodlong-terminvestments.

Dennis Nelson: The four other stores later this year are in the markets we are in. But we feel we'll be good additions or not distract too much from any of our other business that they should be very good long term investments.

Unknown Executive: There are no further questions.

Alan Glenn: Oneofthemmightmakeachangeafterthefirstyearofastoretakingoverfromanotherstore,butbasicallynewmarketsonthose.

Dennis Nelson: One of them might make a change after the first year of a store taking over from another store but basically new markets on those.

Operator: Therearenofurtherquestionsinqueue.

Unknown Executive: There are no further questions in queue. As a reminder, if you would like to ask a question, please raise your hand in the Zoom app. There are no further questions.

Operator: Asareminder,ifyouwouldliketoaskaquestion,pleaseraiseyourhandintheZoomapp.

Unknown Executive: There are no further questions in queue.

Operator: Okay,therearenofurtherquestions.

Operator: IcangoaheadandturnitbackovertoBuckleforanyclosingremarks.

Unknown Executive: I can go ahead and turn it back over to the buckle for any closing works.

Operator: Well,thankyouforparticipatingtoday.

Unknown Executive: As a reminder, if you would like to ask a question, please raise your hand in the Zoom app.

Unknown Executive: Well, thank you for participating today. If there are no further questions, we can wrap up the call.

Unknown Executive: Well, thank you for participating today. If there are no further questions, we can wrap up the call. We thank everyone for participating and hope you all enjoy the rest of the day.

Operator: Iftherearenofurtherquestions,wecanwrapupthecall. Wethankeveryoneforparticipatingandhopeyouallenjoyedtherestoftheday.

Unknown Executive: There are no further questions.

Unknown Executive: I can go ahead and turn it back over to the buckle for any closing works.

Unknown Executive: We thank everyone for participating and hope you all enjoy the rest of the day.

Unknown Executive: Well, thank you for participating today.

Unknown Executive: If there are no further questions, we can wrap up the call.

Unknown Executive: There are no further questions in queue as a reminder, if you would like to ask a question, please raise your hand in the zoom app.

We thank everyone for participating and hope you all enjoy the rest of the day.

Unknown Executive: There are no further questions.

Operator: Goodbye.

Unknown Executive: I can go ahead and turn it back over to the bubble for any closing works.

Unknown Executive: Well, thank you for participating today.

Unknown Executive: If there are no further questions, we can wrap up the call.

Unknown Executive: We thank everyone for participating and hope you all enjoyed the rest of the day.

Unknown Executive: Good bye.

Mauricio Vega: Maybe you could elaborate what is driving that in terms of maybe like more higher private label penetration or cost controls or management around our promotions.

Mauricio Vega: I'll be super happy.

Mauricio Vega: Thank you.

Unknown Executive: Good morning Mauricio.

Unknown Executive: I'll let Dennis take the merchandise margin question first and then we'll jump into the store one question.

Unknown Executive: Okay.

Unknown Executive: Good morning.

Dennis Nelson: Our Adam continues to be very good in cell through and newness and we're having some nice margin expansion there as well as our private brands continue to have solid demand and cell through so that's been very good as well.

Dennis Nelson: The kids margins are improved and just kind of overall outside of footwear, we're very happy with the margin growth there.

Dennis Nelson: And then on the e-commerce initiatives, I mean that's been a big priority for this year, you know, knowing that there was a gap between in-store performance and e-commerce performance last year and in the first part of this year. So at the start of the quarter, we engaged third parties to come in and help us and assist our teams to really do a comprehensive review of our website, focusing on the shopability of the site, looking at our analytics capabilities.

Dennis Nelson: And so throughout the quarter, we've made a lot of iterative improvements to the site as it relates to navigation, to filters, to check out, product displaying, groupings, the next iteration as focusing on on-site search.

Dennis Nelson: But we really feel like we've made a lot of improvements to the site itself, the shopability of the site, the experience of a guest on the site and their ability to find product. Throughout the quarter, you know, that led to increases in conversion, increases in a lot of on-site metrics in terms of positive interaction, positive guest shopping experience on the website, also increase in AOV.

Dennis Nelson: So really the next version of where we're focusing is traffic.

Dennis Nelson: I think we talked in the first quarter traffic has been challenged to the site. During the quarter, we really reviewed our digital spend, marketing spend as it relates to driving traffic to e-commerce.

Dennis Nelson: A lot of it prior to probably mid-July was focused on guest acquisition.

Dennis Nelson: We've really pivoted to and reallocated our budget and our dollars to a more balanced approach focused on retention and end acquisition. And I think that's paid a lot of dividend.

Dennis Nelson: You don't necessarily see it in the Q2 numbers, but we saw positive results in terms of traffic really late in the quarter as some of those initiatives kicked in.

Unknown Executive: There are no further questions in Q.

Unknown Executive: As a reminder, if you would like to ask a question, please raise your hand in the Zoom app.

Mauricio Vega: Looks like Mauricio has another question.

Unknown Executive: Mauricio, I'll go ahead and unmute you at this time.

Mauricio Vega: Great.

Mauricio Vega: Yeah, I just had another follow-up.

Mauricio Vega: Thank you, first of all, for answering the previous questions.

Mauricio Vega: Maybe on the operating expenses. I remember in last quarter, there was like a timing issue that led to elevated growth in general and administrative expenses, but now I still see like it was up, you know, total operating expenses were up 3.2 percent.

Mauricio Vega: You know, some increases involved in selling.

Mauricio Vega: And general, in that initiative this time around, just curious, if you could elaborate a little bit more on what is driving that increase.

Mauricio Vega: You know, given that sales are still down and any initiatives that the company's doing there to manage down those expenses, so that will be super helpful.

Mauricio Vega: Thank you.

Unknown Executive: Yeah, thank you, Mauricio.

Unknown Executive: I mean, I think if you look at, we look at it kind of in two different buckets, we look at the selling and the GNA, I think the GNA was pretty consistent.

Unknown Executive: Q1 to Q2, I mean, the increases year over year there are really the same things and home office payroll is the big driver there is just as we continue to invest in our team here.

Q2 2025 The Buckle Inc Earnings Call

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