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Category: Stock Market and Buckle Inc
Date: 11 June 2020 Stock Price: $15.87 We take a look at the 1st quarter earnings report of their 2020 fiscal year of Buckle Inc, an on-trend apparel retailer with 449 stores in 42 states across the USA with sales of $115 million for the 1st quarter of 2020. The group has been hit severely by the Covid-19 pandemic.
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About Buckle Inc.
Offering a unique mix of high-quality, on-trend apparel, accessories, and footwear, Buckle caters to fashion-conscious young men and women. Known as a denim destination, each store carries a wide selection of fits, styles, and finishes from leading denim brands, including the Company’s exclusive brand, BKE. Headquartered in Kearney, Nebraska, Buckle currently operates 449 retail stores in 42 states. As of the end of the fiscal quarter, it operated 449 stores in 42 states compared with 453 stores in 43 states at the end of the third quarter of fiscal 2018.
Overview of Buckle's 1st quarter 2020 earnings report
Data below refers to the latest quarter's data unless specified otherwise:
- Net sales: $115.413 million (down from $201.313 million for the same quarter of the prior year)
- Net sales decreased by -42.6% over the last 12 months
- Cost of sales : $88.588 million (down from $124.660 million for the same quarter of the prior year)
- Cost of sales expenses decreased by -28.9% over the last 12 months
- So margin squeeze being experienced by Buckle as revenue fell at a rate a lot faster than their cost of sales, which is bad for both gross and net profit margins.
- Net loss: -$11.784 million (down from $15.092 million for the same quarter of the prior year)
- Diluted loss per share: -$0.24 (down from $0.31 for the same quarter of the prior year)
- Shares outstanding : 48.922 million (up from 48.734 million for the same quarter of the prior year)
- Cash and cash equivalents: $185.037 million
- Cash and cash equivalents per share: $3.78
- Cash and cash equivalents makes up 23.9% of Buckle's market capital
- Cash and cash equivalents makes up 23.1% of Buckle's total assets
- Merchandise inventories: $121.671 million
- Merchandise inventories makes up 15.2% of Buckle's total assets
- Stockholders equity in Buckle: $377.949 million
- Stockholders equity per Buckle stock: $7.72
- Buckle is trading at 2.03 times its stockholders equity per share which is just within the expected range of between 2 and 4 times that most firms tend to trade at
- Firms in the S&P 500 trades at an average price to book value of 3.7.
Buckle's management commentary on their 1st quarter 2020 earnings
KEARNEY, NE -- The Buckle, Inc. (NYSE: BKE) announced today a net loss for the fiscal quarter ended May 2, 2020 of $11.8 million, or $0.24 per share ($0.24 per share on a diluted basis). Net sales for the 13-week fiscal quarter ended May 2, 2020 decreased 42.7 percent to $115.4 million from net sales of $201.3 million for the prior year 13-week fiscal quarter ended May 4, 2019. Online sales for the quarter increased 31.5 percent to $32.1 million for the 13-week period ended May 2, 2020, compared to net sales of $24.4 million for the 13-week period ended May 4, 2019.
As previously announced, Buckle closed all brick and mortar stores due to the COVID-19 pandemic for an indefinite period beginning March 18, 2020. The Company began the process of reopening certain stores the week of April 26, 2020, following state and local reopening guidelines. As of May 2, 2020, 37 stores had reopened. The Company has continued to reopen stores each week in May, with 331 total stores currently reopened.
The Company’s online store has remained open without interruption. As a result of the store closures, the Company plans to only report total net sales and does not plan to separately report comparable store sales during this time. As a result of the store closures, Buckle reported a net loss for the first quarter of fiscal 2020 of $11.8 million, or $0.24 per share ($0.24 per share on a diluted basis), compared with net income of $15.1 million, or $0.31 per share ($0.31 per share on a diluted basis) for the first quarter of fiscal 2019.
The Company’s online store has remained open without interruption. As a result of the store closures, the Company plans to only report total net sales and does not plan to separately report comparable store sales during this time. As a result of the store closures, Buckle reported a net loss for the first quarter of fiscal 2020 of $11.8 million, or $0.24 per share ($0.24 per share on a diluted basis), compared with net income of $15.1 million, or $0.31 per share ($0.31 per share on a diluted basis) for the first quarter of fiscal 2019.
Buckle Inc. (NYSE: BKE) stock price history
The image below obtained from Google, shows the stock price history of Buckle Inc. (NYSE: BKE) for the last 5 years, and its not been a good time for Buckle stockholders. 5 years ago the stock of Buckle was trading at around $45.00 and its currently trading at $15.22 a stock. That's significant loss of -64.7% suffered by Buckle Inc stockholders.
The stock of Buckle is trading at a lost closer to its 52 week low of $11.76 than it is to its 52 week high of $28.52 which to us is a clear indication that the short term sentiment and momentum of Buckle's stock is negative at this point in time.
The stock of Buckle is trading at a lost closer to its 52 week low of $11.76 than it is to its 52 week high of $28.52 which to us is a clear indication that the short term sentiment and momentum of Buckle's stock is negative at this point in time.
Recent coverage of Buckle Inc
The extract below covers the latest regarding Buckle as obtained from Yahoo Finance.
Shares of The Buckle, Inc. BKE have gained roughly 4% since the company released sales numbers for the month May on Jun 4. The upside can be attributed to deceleration in the rate of sales decline registered during the month under review and the gradual reopening of some of the stores as per the state and local guidelines.
Notably, this casual apparel, footwear, and accessories retailer initiated the process of reopening certain outlets during the week of Apr 26, 2020. As of May 30, Buckle reopened about 367 outlets, with 30 more stores reopening in the week of May 31. Meanwhile, the company’s online store has remained open throughout. However, this was not enough to make up for loss of revenues from brick-and-mortar.
Buckle’s total net sales for the four-week fiscal month ended May 30, 2020 declined 16.8% to $51.2 million from net sales of $61.5 million reported in the four-week fiscal month ended Jun 1, 2019. We note that rate of fall in sales for the month of May has decelerated sharply from the decrease of 80.8% and 50.2% witnessed in the months of April and March, respectively. The metric had improved 6% and 3.2% in February and January, respectively.
Read the full article here
Shares of The Buckle, Inc. BKE have gained roughly 4% since the company released sales numbers for the month May on Jun 4. The upside can be attributed to deceleration in the rate of sales decline registered during the month under review and the gradual reopening of some of the stores as per the state and local guidelines.
Notably, this casual apparel, footwear, and accessories retailer initiated the process of reopening certain outlets during the week of Apr 26, 2020. As of May 30, Buckle reopened about 367 outlets, with 30 more stores reopening in the week of May 31. Meanwhile, the company’s online store has remained open throughout. However, this was not enough to make up for loss of revenues from brick-and-mortar.
Buckle’s total net sales for the four-week fiscal month ended May 30, 2020 declined 16.8% to $51.2 million from net sales of $61.5 million reported in the four-week fiscal month ended Jun 1, 2019. We note that rate of fall in sales for the month of May has decelerated sharply from the decrease of 80.8% and 50.2% witnessed in the months of April and March, respectively. The metric had improved 6% and 3.2% in February and January, respectively.
Read the full article here
Buckle Inc. (NYSE: BKE) stock valuation
So based on Buckle's latest earnings report what do we value the company's stock at? Based on Buckle's earnings report our valuation model we have a target (full value) price for Buckle's at $24.70 a stock (down slightly from our 4th quarter 2019 earnings report valuation of Buckle). We therefore believe the stock of Buckle is undervalued
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $24.70. A good entry point into the stock of Buckle would therefore be at $22.20 or below. Since the stock of Buckle's is trading at well below our suggested entry point we rate Buckle as a buy
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $24.70. A good entry point into the stock of Buckle would therefore be at $22.20 or below. Since the stock of Buckle's is trading at well below our suggested entry point we rate Buckle as a buy
Next earnings release of Buckle Inc (NYSE: BKE)
It is expected that Buckle Inc. will release their 2nd quarter 2020 earnings report towards the middle of September 2020