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    BUCKLE (BKE)

    BKE Q3 2025: 55bps Margin Lift Offsets Rising Cost Pressures

    Reported on Aug 14, 2025 (Before Market Open)
    Pre-Earnings Price$47.65Last close (Nov 21, 2024)
    Post-Earnings Price$48.67Open (Nov 22, 2024)
    Price Change
    $1.02(+2.14%)
    • Strong Net Store Expansion: Executives highlighted plans for net additions in 2025 with 2-3 new stores arising from 7-8 total new store openings offset by some closures, which supports a growing retail footprint.
    • Positive Impact from Store Remodels: The discussion on remodels indicated that updates, especially from mall to outdoor power centers, can yield low double-digit sales lifts, boosting in-store performance and customer engagement.
    • Resilient Merchandise Margins: The Q&A emphasized consistent 55 basis points improvement in merchandise margins driven by robust private label growth, underpinning overall profitability despite higher operational costs.
    • Margin Pressure Concerns: The Q&A revealed a deceleration in merchandise margin improvement (only a 55 basis point increase) compared to previous quarters, indicating potential upward pressure from higher occupancy, distribution, and buying costs.
    • Limited Store Expansion: Management’s guidance of net addition of only 2-3 stores in 2025 amid a challenging retail landscape may signal constrained growth opportunities.
    • Uncertain Remodel Benefits: Comments on the post-remodel performance were vague without specific quantitative benefits, suggesting uncertainty over whether remodeling investments will generate sufficient sales uplift.
    1. Margin Drivers
      Q: Explain merchandise margin deceleration?
      A: Management noted that while merchandise margins improved by 55bps, higher occupancy (+100bps) and distribution costs (+35bps) led to a deceleration compared to prior expectations, with strong private label performance supporting consistent trends.

    2. Store Expansion
      Q: Clarify store count and new openings?
      A: They confirmed ending Q3 with 445 stores and expect a net addition of about 2–3 stores in 2025, balancing new openings and planned closings to maintain steady growth.

    3. Remodel Impact
      Q: What benefits from store remodels?
      A: Management indicated that store remodels typically deliver a low double-digit sales lift, especially when moving to outdoor power centers, though outcomes vary by location.

    Research analysts covering BUCKLE.