Mauricio Serna Vega's questions to BUCKLE (BKE) leadership • Q1 2025
Question
Mauricio Serna Vega from UBS Research inquired about the anticipated impact of tariffs on gross margin, the drivers behind the Q1 merchandise margin improvement, and the reasons for the increase in both operating lease assets and SG&A expenses.
Answer
Executive Dennis Nelson explained that the company is managing tariff impacts by working with vendors who are diversifying sourcing and helping to control prices. Executive Thomas Heacock attributed the merchandise margin strength to higher private label penetration and strong full-price sales. Heacock also clarified that the rise in lease assets is due to new stores and remodels, while increased SG&A was driven by higher variable payroll, incentive compensation, and health insurance costs.