Buckle Earnings Preview: EPS and Sales Growth Expected

Buckle

is scheduled to report fourth-quarter 2011 results tomorrow, March 8, before the markets open. The teen apparel purveyor saw strong same-store sales in December and January on strong demand for jeans and footwear. Investors will be looking for that to begin a new streak of positive surprises following the penny-per-share earnings beat in the previous quarter. Analysts anticipate the company will report that its per-share earnings came to $1.14 for the quarter and that revenue totaled $335.1 million. In the same quarter of last year, the company posted $1.05 per share and $303.1 million in sales. That EPS estimate has risen from $1.11 some 60 days ago. But note that in the past six quarters, Buckle's per-share earnings have topped consensus estimates three times and fallen short three times. However, results have been within a penny or two of the forecast in the past three quarters. Looking back to the previous quarter, the retailer reported net income of $38.3 million, or 81 cents per share. That was up 11% year over year. Revenue rose 12% to $273.4 million. Both the EPS and revenue numbers topped analysts' expectations. The company attributed the strong results in part on strong online sales. For the full year, the consensus forecast calls for $3.16 per share earnings on revenue of $1.1 billion. That would be up from $2.86 per share and $949.8 million last year. That EPS estimate has risen three cents over the past 60 days.

Kearny, Neb.-based Buckle is a retailer of casual apparel, footwear and accessories for fashion-conscious young men and women. It is known for its large selection of denim offerings, including its exclusive brand, BKE. The company operates about 430 stores in 43 states and also sells via e-commerce. The company was founded in 1948 and now has a market cap of $2.2 billion. Competitors include Abercrombie & Fitch

, American Eagle Outfitters

and Urban Outfitters

. Abercrombie reported a drop in its fourth-quarter profit and said it will be closing 180 stores. American Eagle recently lowered its fourth-quarter guidance and is scheduled to post its results this morning. Urban Outfitters reports March 12 and is expected to say that EPS fell by a third but that revenues were up 11% from a year ago.

During the three months that ended in January, Buckle saw strong same-store sales each month. And the board authorized a $0.20 per share quarterly dividend. More recently, the company signed a multiyear renewal agreement its private label credit card service provider.

Buckle's P/E ratio is lower than the industry average. The company has a long-term earnings per share growth forecast of 9.7%. Its operating margin is better than the industry average, and the return on equity is 39.9%. However, short interest is 29.9% of the float, and just one of the 12 analysts surveyed who follow the stock recommends buying it. And their mean price target on the shares is only marginally higher than the current share price. The share price has pulled back about 4% from last week's multiyear high of $49.00. Shares still are trading more than 15% higher than at the beginning of the year, and about 37% higher than a year ago. The share price is well above the 50-day and 200-day moving averages. Over the past six months, the stock has outperformed competitors such as Abercrombie & Fitch and Urban Outfitters, as well as the broader markets.