Buckle Q1 Profit Drops 31%, Misses Estimations

The Buckle, Inc. BKE announced 31.3 percent drop in net income for the first quarter as net sales fell 10.2 percent. As a result, both earnings and revenue came in below the Street analysts' expectations.

The Buckle reported net income of $23.1 million compared to $33.6 million in the previous year quarter. Earnings also dropped similar percentage to $0.48 a share from $0.70 a share in the same quarter last year. This was $0.08 per share lower than the Street expectations of $0.56 a share.

The company's net sales for the 13-week fiscal quarter ended April 30, 2016 fell 10.2 percent to $243.5 million from $271.3 million in the year-ago quarter. Its comparable store net sales for the 13-week period dropped 11.1 percent while online sales fell 2.8 percent to $23.5 million in the first quarter. Analysts expected net sales of $246.13 million.

Buckle said its net sales for the first quarter were net of a $3.0 million adjustment recorded as a reduction to revenue to accrue for estimated future rewards related to the Company's new Guest Loyalty program, which launched during the quarter. Excluding the impact of this adjustment for estimated future rewards, the company indicated that total net sales for the quarter were down 9.1 percent and comparable store net sales were down 10.0 percent.

The company stated that despite the impact on reported sales, it was excited about the several potential gains its Guest Loyalty would offer to both Buckle and its guests.