Buckle (NYSE:BKE) reported higher first-quarter sales and earnings, helped by comparable-store growth, continued strength in women’s merchandise and a significant reduction in reported selling, general and administrative expenses tied to a litigation settlement.
Tom Heacock, senior vice president of finance, treasurer and chief financial officer, said the apparel retailer posted net income of $46.9 million, or $0.92 per diluted share, for the 13-week quarter ended May 2, 2026. That compared with net income of $35.2 million, or $0.70 per diluted share, in the prior-year first quarter.
Margins Reflect Settlement Benefit and Occupancy Pressure
Heacock said gross margin was 46.2% of sales, down 50 basis points from 46.7% in the first quarter of fiscal 2025. The decline reflected a 10-basis-point reduction in merchandise margins and a 40-basis-point impact from higher buying, distribution and occupancy expenses.
Selling, general and administrative expenses were 25.6% of net sales, compared with 30.7% in the prior-year period. Heacock attributed the decrease to a 660-basis-point impact from the recognition of a $19.1 million interchange fee litigation settlement during the quarter, which the company had disclosed in its 2025 Form 10-K.
Excluding the settlement impact, SG&A expenses rose 150 basis points as a percentage of sales. Heacock said that increase was driven by a 100-basis-point rise in incentive and equity compensation accruals, a 30-basis-point increase in store-related compensation expense and a 20-basis-point increase across other SG&A categories.
Operating margin improved to 20.6% from 16.0% a year earlier. The company’s income tax rate was 24.5% in both the current and prior-year first quarters.
Women’s and Kids Categories Lead Growth
In prepared remarks following Heacock’s financial review, the company said women’s merchandise sales rose 11% in the first quarter, building on a 10.5% increase in the same period last year. Women’s merchandise represented about 52% of sales, up from 50% a year earlier.
Women’s denim remained the leading contributor to revenue growth, with sales up 8% year over year. Average women’s denim price points increased to $92 from $84.85 in the first quarter of fiscal 2025. The company also cited growth in alternative pants, strong trends and expanded brand offerings, along with strength in women’s tops and an early positive response to denim shorts for the spring and summer seasons.
Men’s merchandise sales increased 2% from the prior year and accounted for about 48% of total sales, compared with 50% last year. Men’s denim sales declined about 1.5%, though the company said private brands within men’s denim rose 0.5% and represented more than 75% of that business. Average men’s denim price points decreased slightly to $89.10 from $89.70.
Men’s tops were a meaningful contributor to growth, led by tees, polos and short-sleeve button fronts. The company also reported strength in shorts, including denim and athletic styles.
Accessory sales increased about 6%, while footwear sales rose about 0.5%. Accessories accounted for about 11% of first-quarter net sales, unchanged from the prior-year period, while footwear represented about 5%, compared with 5.5% last year. Average accessory price points increased about 5%, and average footwear price points were up 9%.
The kids business delivered another strong quarter, with sales up approximately 16% from a year earlier. The company said the category remains a growth opportunity as it seeks to reach customers earlier in their shopping journey.
Inventory and Store Investment Increase
Buckle ended the quarter with inventory of $150.2 million, up 13.5% from the same time last year, and total cash and investments of $323.8 million. Fixed assets, net of accumulated depreciation, were $169 million.
Capital expenditures totaled $14.7 million, including $13.5 million for new store construction, store remodels and technology upgrades. Another $1.2 million was spent at the corporate headquarters and distribution center. Depreciation expense was $6.5 million.
During the quarter, Buckle opened three new stores, completed five full-store remodels and closed one store. Four of the remodels were relocations into new outdoor shopping centers. After the quarter ended, the company opened three additional new stores, completed two more full-store remodels and closed one store during fiscal May.
Heacock said year-to-date activity included six new stores, seven full-store remodels and two store closures. For the remainder of the year, the company anticipates opening nine additional new stores and completing seven more full remodeling projects. Buckle ended the quarter with 442 retail stores in 42 states, compared with 439 stores in 42 states at the end of the prior-year first quarter.
Management Discusses Tariffs, Fuel and Consumer Demand
During the question-and-answer session, UBS Research analyst Mauricio Serna asked about the gross margin contraction. Management said the 10-basis-point decline in merchandise margin came against record-high levels in the prior year and that the company remained pleased with its regular-price business. Management cited some cost pressure from tariffs and said men’s denim was the category that was down.
On buying, distribution and occupancy expenses, management said occupancy expense increased 6.6%, driven by rent and depreciation tied to store projects. The company noted that last year’s projects were more heavily weighted toward the final three quarters, while this year’s schedule has been heavier in the first part of the year.
Asked by Serna about fuel costs, management said Buckle does not hedge fuel costs. The company has seen increases in fuel surcharges on inbound freight and outbound and e-commerce carriers, but said the increases were manageable and were not called out as a material impact on gross margin or SG&A in the quarter.
In response to a question from analyst John Rotz about consumer pressure, President and Chief Executive Officer Dennis Nelson said Buckle had a strong February and March, helped in part by Easter and spring break timing. April was “off a little,” he said, but the company felt good about the quarter, sell-throughs and inventory.
“Our sales teams have been doing an excellent job through the first quarter,” Nelson said. He added that the company expects its offerings and value in stores to be well received by customers.
Heacock also said the 100-basis-point increase in incentive compensation in the quarter included some pull-forward from the company’s normal recognition pattern because of strong first-quarter profitability. He said some of that pressure should ease through the rest of the year.
On tariff refunds, Heacock said Buckle filed a refund claim in the first quarter but did not receive funds during the period. He said the company received a small, immaterial amount after quarter-end and expects more later, with no impact to the reported financials.
About Buckle (NYSE:BKE)
Buckle, Inc is a retailer specializing in casual apparel, footwear and accessories for young men and women. The company is known for its denim-focused collections, offering both private-label lines and curated brand-name merchandise. Its product assortment includes jeans, tops, outerwear, shoes and a variety of accessories such as belts, jewelry and handbags, all aimed at blending contemporary style with everyday comfort.
Founded in 1948 in Kearney, Nebraska, Buckle began as a single clothing store and has since expanded into a nationwide chain.
