The Buckle Inc. (BKE)
Q4 2008 Earnings Call Transcript
March 11, 2009, 2009 4:30 pm ET
Karen Rhoads – VP of Finance, CFO and Treasurer
Dennis Nelson – President and CEO
Tom Heacock – Corporate Controller
Kyle Hanson – Corporate Secretary and General Counsel
Margaret Whitfield – Sterne, Agee
Mark Mandel – Wedbush Morgan Securities
Edward Jerome [ph] – KeyBanc
Anna Andreeva – JP Morgan
Elizabeth Montgomery [ph] – Longbow
Ronald Bookbinder – Global Hunter
Linda Tsai – MKM Partners
Previous Statements by BKE
» Buckle, Inc Q2 2009 Earnings Call Transcript
» The Buckle Inc. Q2 2008 Earnings Call Transcript
» The Buckle, Inc. Q4 2007 Earnings Call Transcript
As they review the operating results for the fourth quarter, which ended January 31, they would like to reiterate their policy of not giving future sales or earnings guidance and have the following Safe Harbor statement, the 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 made 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.
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 therein will not be realized. Additionally, the company does not authorize the reproduction or dissemination of transcripts or audio recordings of the company’s quarterly performance calls without its expressed written consent. Any unauthorized reproductions or recordings of the calls should not be relied upon as the information may be inaccurate.
Now I like to turn the conference over to your host, Karen Rhoads. Please go ahead, ma'am.
Thank you and good afternoon everyone. Our March 11, 2009 press release reported that net income for the fourth quarter ended January 31, 2009 was 34.3 million or $0.74 per share on a diluted basis and that compares to 29.1 million, or $0.63 per share on a diluted basis for the prior year fourth quarter ended February 2, 2008.
Net income for the 52-week fiscal year ended January 31, 2009 was $104.4 million or $2.24 per share on a diluted basis and that compares with $75.2 million or $1.63 per share on a diluted basis for the 52-week fiscal year ended February 2, 2008.
Please note that the prior year’s earnings per share numbers have been adjusted to reflect the impact of our 3-for-2 stock split that was paid in the form of a stock dividend on October 30, 2008.
Additionally, as disclosed in this morning's press release, during the fourth quarter of fiscal 2008, the company recorded a $3.4 million unrealized loss resulting from the "Other-than-Temporary" impairment of certain of our investments in auction-rate securities.
For the full fiscal year, the company has recorded a total of $5.2 million in unrealized losses resulting from the "Other-than-Temporary" impairment of certain investments in auction-rate securities. The unrealized losses have been recorded in the Statements of Income for the quarter and for the fiscal year ended January 31, 2009. This adjustment had an impact of $0.05 per share after-tax on reported basic and diluted earnings per share for the fourth quarter and a $0.07 per share after-tax impact on the reported basic and diluted earnings per share for the fiscal year.
Net sales for the 13-week fourth quarter increased 21.5% to $251.4 million compared to net sales of $207.0 million for the prior year fourth quarter. Comparable store sales for the quarter increased 14.3% compared to the same period in the prior year.
Net sales for the 52-week fiscal year ended January 31, 2009 increased 27.8% to $792.0 million compared to net sales of $619.9 million for the prior year 52-week fiscal year ended February 2, 2008. Comparable store sales for fiscal 2008 increased 20.6% compared to the same period in the prior year.
Gross margin for the quarter improved approximately 170 basis points to 46.1%. This improvement was driven by an increase in merchandise margins, which had about 65 basis point impact, and by the leveraging of buying and occupancy costs, which had about a 105 basis point impact.
For the fiscal year, gross margin improved approximately 230 basis points to 43.4%. This improvement was driven by an increase in merchandise margins, which had about a 50 basis point impact, and by the leveraging of buying and occupancy costs, which had a 190 basis point impact. These improvements were partially offset by an increase in expenses, related to the incentive bonus accrual.
The improvement in merchandise margins for both the fourth quarter and for the full fiscal year are primarily a reflection of reduced markdowns as a result of strong sell through on new products, which was partially offset by an increase in redemptions to our Primo Card loyalty program.
Selling expense for the quarter was 18.6% of net sales, which was an increase of approximately 10 basis points from the fourth quarter of fiscal 2007. The increase was driven primarily by an increase in expense related to the incentive bonus accrual and increase in Internet related fulfillment and marketing expenses, and investments made during the quarter related to certain store fixtures and supplies. These increases were partially offset by a reduction as a percentage of net sales in store payroll expense and by the leveraging of certain other selling expenses.