BUCKLE INC (BKE)·Q2 2026 Earnings Summary

Executive Summary

• BKE delivered a clean beat: revenue $305.7M (+8.3% YoY) and diluted EPS $0.89 versus S&P Global consensus of ~$292.6M* revenue and ~$0.83* EPS; EBITDA also ahead (actual ≈$62.4M vs ~$54.1M*). Comparable sales +7.3% and online sales +17.7% supported the upside .
• Gross margin expanded 50 bps to 47.4% and operating margin rose to 18.4%, driven by strong full-price sell-through and leverage on buying/distribution/occupancy; sequentially, private label mix moderated and occupancy expenses stepped up due to off-mall relocations and higher percentage rent .
• Women’s outperformance accelerated (merchandise sales +18.5% YoY; women’s denim +20.5%; private label mix 43.5% of sales), while men’s returned to growth (+1.5%); kids grew ~23% and now ~4.5% of sales .
• Capital allocation and balance sheet remained supportive: quarterly dividend maintained at $0.35/share; inventory +8.4% YoY into back-to-school; cash and investments ~$349.6M at quarter end .

What Went Well and What Went Wrong

• What Went Well

  • Margin execution: “Gross margin for the quarter was 47.4%, a 50 basis point increase… the result of a 10 basis point increase in merchandise margin, along with 40 basis points of leverage buying, distribution and occupancy expenses.” — CFO .
  • Merchandising strength led by women’s/denim: Women’s merchandise sales +18.5% YoY; women’s denim +20.5% with AURs rising from $80.6 to $85.35; strong regular-price selling across categories .
  • Digital momentum and SG&A tailwinds: Lapping last year’s “nonrecurring digital commerce investments” reduced SG&A rate by ~65 bps in Q2, with some benefit continuing into Q3, per management .

• What Went Wrong

  • Sequential mix headwind: Private label mix was lower in Q2 vs Q1 (while still up YoY), moderating merchandise margin growth versus Q1, per CFO .
  • Occupancy costs ticked higher: “Q2 increased about 5.5% for occupancy expense (vs ~3.5% in Q1)… related to new stores/remodels and moving out of malls into better off-mall locations; strong sales also increased percentage rent,” weighing on leverage vs what comps might imply .
  • UPT softness and footwear: UPTs fell ~1.5% (AUR +3% and ATV +1.5% offset), while footwear was down ~0.5% YoY for the quarter .

Financial Results

Headline results by quarter

Margins

Q2 2026 actual vs S&P Global consensus

*Values retrieved from S&P Global.

KPI detail

Mix and category trends

Notes: Q2 women’s merchandise +18.5% YoY; women’s denim +20.5% with denim AUR rising from $80.6 to $85.35; men’s merchandise +~1.5% with denim +~4.5%; kids +~23% and now ~4.5% of sales .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Gross margin for the quarter was 47.4%, a 50 basis point increase… the result of a 10 basis point increase in merchandise margin, along with 40 basis points of leverage buying, distribution and occupancy expenses.” — Thomas Heacock, CFO .
• “Private label… was down in Q2 compared to Q1… and the year-over-year growth in the percentage of the mix that’s private label slowed a little bit as well just with the strong selling of some of our nationally branded products.” — CFO .
• “On the tariffs, we continue to see… low to mid single digit… cost increase… several [vendors] we’re not seeing any increase… [some] higher, single digit.” — Dennis Nelson, CEO .
• “Occupancy expense… increased about 5.5% in Q2 compared to about 3.5% in Q1… related to… moving out of a lot of malls into better locations off mall… and… an uptick in percentage rent with several of our stores.” — CFO .
• “Our women’s business growth accelerated… women’s denim increased approximately 20.5%… average denim price points increasing from $80.6… to $85.35.” — Adam Akerson, VP Finance .

Q&A Highlights

• Gross margin composition: Merchandise margin still positive YoY, but growth rate slower than Q1 given lower private label mix and higher occupancy; full-price selling remained strong .
• Tariffs: Management reiterated low-to-mid-single-digit average cost increases, with selective higher single-digit increases for certain brands; active vendor/sourcing management continues .
• Occupancy leverage: Off-mall relocations and strong comp performance lifted base and percentage rent, limiting leverage despite healthy comps .
• SG&A: ~65 bps YoY benefit from lapping last year’s digital investments will continue into Q3; incentive comp accruals rose with stronger performance .

Estimates Context

• S&P Global consensus for Q2 2026: revenue ~$292.6M* (2 ests), EPS ~$0.83* (2 ests), EBITDA ~$54.1M*; BKE reported $305.7M revenue, $0.89 diluted EPS, and EBITDA ≈$62.4M (OpInc $56.3M + D&A ~$6.1M), producing clear beats across all three .
• Consensus target price mean ~$55* (1 est). With beats and improving comps/margins, near-term estimate revisions bias higher, especially on EBITDA/EBIT margin trajectory.
  *Values retrieved from S&P Global.

Key Takeaways for Investors

• Quality beat with expanding margins: revenue +8.3% and EPS $0.89 beat consensus alongside 50 bps gross margin expansion and 130 bps operating margin expansion YoY — a constructive signal into back-to-school/holiday .
• Mix and pricing power remain supportive: Women’s/denim strength and higher denim AURs underpin merchandise margins even as private label mix moderated sequentially .
• Real estate strategy is raising occupancy costs near term: Off-mall relocations improve locations but lift rent and percentage rent; watch occupancy growth vs comps in H2 .
• Digital investment lap is a tailwind through Q3: Expect continued SG&A rate benefit from lapping prior-year e-com investments, partially offset by incentive comp accruals .
• Balance sheet strength and steady dividend: ~$350M cash/investments and $0.35/share quarterly dividend provide support and optionality for remodels/new stores .
• Watch KPIs: private label mix trajectory (merch margin sensitivity), occupancy growth vs comp cadence, and continued women’s/denim outperformance as drivers of margin sustainability .
• Near-term trading setup: Positive estimate revisions likely post-beat; narrative remains “full-price selling + women’s/denim strength vs higher occupancy” — favor dips if comps and gross margin hold through Q3.

Appendix: Additional Context (Prior Periods)

• Q1 2026: Revenue $272.1M, diluted EPS $0.70; gross margin 46.7%; operating margin 16.0%; comps +3.0%; online $46.4M .
• Q4 FY2024: Revenue $379.2M, diluted EPS $1.53; comps +3.9%; online $69.7M .