KeyBanc has cut its earnings estimates for Buckle Inc BKE as its recent field work suggests weaker comps and greater margin contractions at the company.
"[W]e expect an increased focus on lower-priced denim, incremental promotions, and the Company's high exposure to challenged commodity-related regions should keep near-term trends depressed," analysts at KeyBanc wrote in a note.
The brokerage noted that Buckle's comp trends are highly correlated to women's denim pricing as its field work points to an influx of lower-priced women's denim as new products emphasize the $60-$70 price range (vs. current avg. of $96.15).
KeyBanc, which has a Sector Weight rating on the stock, said Buckle has also introduced more private label denim, with 7 SKUs in the new product offering.
Analysts at KeyBanc cut FY16 EPS estimate to $2.56 from $2.70 (Street: $2.57) and FY17 earnings per share view to $2.57 from $2.78 (Street: $2.58).
At time of writing, shares of Buckle fell 1.91 percent to $25.67.
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