Buckle(BKE) - 2022 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Net income for Q4 2022 was $87.8 million or$ 1.76 per share, compared to $83.9 million or$ 1.69 per share in Q4 2021, reflecting an increase in net income [8] - For the full fiscal year 2022, net income was $254.6 million or$ 5.13 per share, slightly down from $254.8 million or$ 5.16 per share in the previous year [8] - Net sales for Q4 2022 increased by 5.5% to $401.8 million, compared to$ 380.9 million in Q4 2021 [9] - Full-year net sales rose by 3.9% to $1.345 billion, up from$ 1.295 billion in the prior year [9] - Operating margin for Q4 2022 was 27.4%, down from 28.8% in Q4 2021, while the full-year operating margin was 24.4%, down from 25.9% [12] Business Line Data and Key Metrics Changes - Men's merchandise sales for Q4 2022 increased by 8.5%, representing approximately 57.5% of total sales, up from 55.5% in the prior year [17] - Women's merchandise sales decreased by 0.5%, accounting for approximately 42.5% of sales, down from 44.5% in the prior year [23] - Youth business grew by 16.5% in Q4 and approximately 27% for the full year, representing 3% of total sales [18] Market Data and Key Metrics Changes - Online sales for Q4 2022 increased by 2.3% to $74.8 million, while full-year online sales rose by 4.3% to$ 230.4 million [9] - Inventory as of January 28, 2023, was $125.1 million, up 22.5% year-over-year [13] Company Strategy and Development Direction - The company aims to maintain long-term profitability while optimizing its store base and enhancing multi-channel business operations [5][6] - Plans for fiscal 2023 include opening six new stores and completing 12 to 17 full remodeling projects [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a tough comparison for February sales, which showed a 6% decline, primarily due to a strong performance in the previous year [28] - The company feels confident about its inventory levels and expects new deliveries to generate excitement in stores [35] Other Important Information - The company ended the year debt-free with total cash and investments of$ 293.7 million, after paying $202.9 million in dividends [6][13] - The company has a consistent practice of paying quarterly dividends and has paid a special dividend for the 15th consecutive year [6] Q&A Session Summary Question: February sales numbers showed a 6% decline. What insights can you provide? - Management indicated that the decline was primarily due to tough comparisons from the previous year, where sales were up 33% [28] Question: How are you thinking about inventory levels and consumer caution? - Management expressed confidence in inventory levels, noting that while dollar amounts are up, units are down approximately 4% from 2019, indicating a comfortable position [35] Question: Is the comparison to 2019 a guideline for normalized performance? - Management confirmed that comparisons to 2019 are a guideline some investors prefer, highlighting that e-commerce business is up over 100% from 2019 [36]