KeyBanc Cuts Buckle Estimates As Comps, Margins Under Pressure

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.