Buckle, Inc. (The)

Ladies and gentlemen, thank you for standing by and welcome to the Buckels fourth quarter earnings release. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will be given at that time. If you should require assistance during the call, please press star, then zero. Members of Buckels management on the call today are Dennis Nelson, President and CEO, Tom Hecox, Senior Vice President of Finance, treasurer and CFO, Adam Akerson, vice president of finance and corporate controller, and Brady Fritz, senior vice president, general counsel, and corporate secretary. As they review the operating results for the fourth quarter, which ended January 29th, 2022, they would like to reiterate their policy of not giving future sales or earnings guidance and have the following safe harbor statement. Safe harbor statement under the Private Securities Litigation Reform Act of 1995. All forward-looking statements made by the company involve material risks and uncertainties and are subject to change based on factors which may be beyond the company's control. Accordingly, the company's future performance and financial results may differ materially from those expressed or implied in any such forward-looking statement. Such factors include but are not limited to those described in the company's filings with the Securities and Exchange Commission. The company does not undertake to publicly update or revise any forward-looking statements, even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. Additionally, the company does not authorize the reproduction or dissemination of transcripts or audio recordings of the company's quarterly conference calls without its express written consent. Any unauthorized reproductions or recordings of the calls should not be relied upon as information may be inaccurate. With that, I will turn the conference over to our host. Dennis Nelson. Please go ahead, sir.

Good morning, and thank you all for joining us. Before turning it over to Tom, I would like to start by thanking our nearly 8,000 teammates for their tireless efforts over the past year and congratulating them on such a truly incredible year. The grit and determination you displayed despite the ongoing disruptions is the bedrock of Buckle, and I'm confident we are positioned for continued success in the years to come. This outstanding year also could not have been possible without the support of our branded and private label vendors. We are grateful for our continued partnerships as we deliver high-quality product despite numerous challenges. And to our guests, thank you for your continued trust and loyalty. I also want to sincerely thank all the new guests we have welcomed over the past year. We cherish every opportunity to serve our guests and provide the most enjoyable shopping experience possible. I will now turn it over to our CFO, Tom Heacock.

Good morning, and thanks for being with us this morning. Our March 11, 2022 press release reported that net income for the 13-week fourth quarter, which ended January 29, 2022, was $83.9 million, or $1.69 per share on a diluted basis, which compares to net income of $65.6 million, for $1.33 per share on a diluted basis for the prior year 13-week fourth quarter, which ended January 30, 2021. Net income for the 52-week fiscal year ended January 29, 2022 was $254.8 million, or $5.16 per share on a diluted basis, compared to net income of $130.1 million, $2.66 per share on a diluted basis for the prior year 52-week fiscal year ended January 30th, 2021. Net sales for the 13-week fourth quarter increased 19.5% to $380.9 million compared to net sales of $318.8 million for the prior year 13-week fourth quarter. Comparable source sales for the quarter increased 20% in comparison to the same 13-week period in the prior year, and our online sales increased 10.5% to 73.1 million. Net sales for the 52-week fiscal year increased 43.6% to 1.295 billion, compared to net sales of 901.3 million for the prior year 52-week fiscal year. Comparable store sales for the year were up 43.8% in comparison to the same 52-week period in the prior year, and online sales for the year increased 15.9% to $220.8 million. For the quarter, UPTs decreased approximately 2%. The average unit retail increased approximately 2.5%, and the average transaction value increased approximately 0.5%. For the full year, UPTs decreased approximately 2%. The average unit retail increased approximately 2%. and the average transaction value increased just slightly. Gross margin for the quarter was 53.1%, up 180 basis points from 51.3% in the fourth quarter of 2020. The fourth quarter increase in gross margin was the result of a 45 basis point improvement in merchandise margins, coupled with 135 basis points of leverage occupancy buying and distribution costs as a result of the strong sales performance for the quarter. Full-year gross margin was 50.4% compared to 44.5% for fiscal 2020. The full-year gross margin increase was the result of an 85 basis point improvement in merchandise margin and 505 basis points of leverage occupancy buying and distribution costs. Selling general administrative expenses for the quarter were 24.3% of net sales compared to 24.8% for the fourth quarter of 2020. with leverage across several SG&A expense categories, partially offset by increases in online freight costs and marketing investments. Full-year SG&A was 24.5% of sales, compared to 25.8% for fiscal 2020. Our operating margin for the quarter was 28.8%, compared to 26.5% for the fourth quarter of fiscal 2020. For the full year, our operating margin was 25.9%, compared to 18.7% in 2020. Income tax expense as a percentage of pre-tax net income for the fourth quarter was 24.7%, compared to 23.2% for the fourth quarter last year, bringing fourth quarter net income to 83.9 million for 2021, compared to 65.6 million for 2020. For the full fiscal year, income tax expense was 24.6% of pre-tax net income, compared to 23.9% in 2020, bringing net income to 254.8 million for fiscal 2021, compared to 130.1 million for fiscal 2020. Our press release also included a balance sheet as of January 29, 2022, which included the following. Inventory of 102.1 million, which was up approximately 1% from inventory of 101.1 million as of January 30, 2021, and total cash and investments of $286.2 million, which was after payment of $347.8 million in dividends during the year. We ended the year with $100.5 million in fixed assets, net of accumulated depreciation. Our capital expenditures for the quarter were $6.9 million, and depreciation expense was $4.7 million. For the year-to-date period, capital expenditures were $19.1 million, depreciation expense was $18.7 million. Full-year capital spending is broken down as follows. $18.3 million for new store construction, store remodels and technology upgrades, and $0.8 million for capital spending at the corporate headquarters and distribution center. During the quarter, we completed five full remodels, four of which were relocations into new outdoor shopping centers and closed one store. This brings our year-to-date totals to one new store and 15 full remodels, and four store closures. Additionally, we closed one store following the first full day of fiscal 2022. For 2022, we currently plan on opening five new full-line stores and completing 15 to 20 full remodel projects. Based on current store plans, we expect our capital expenditures to be in the range of $22 to $27 million. Muckle ended the quarter with 440 retail stores in 42 states and compared with 443 stores in 42 states at the end of the fourth quarter of fiscal 2020. And now I'll turn it over to Adam Ackerson, our Vice President of Finance.