EPS of $0.88 increased by 27.1% from previous year
Gross margin of 47.7%
Net income of 44.17M
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The Buckle Inc (0HQ7.L) QQ3 2024 Results — Revenue Growth, Margin Resilience and Robust Cash Flow in US Apparel Retail
Executive Summary
The Buckle Inc delivered a robust QQ3 2024 performance, highlighted by a 11.86% year-over-year revenue increase to $293.6 million and a 47.70% gross margin. Operating income rose to $54.48 million with an 18.56% operating margin, driving net income to $44.17 million and EPS of $0.89 (diluted $0.88). The company generated $43.75 million of operating cash flow and $33.60 million in free cash flow, ending the quarter with $302.0 million in cash and cash equivalents and a net debt position of roughly $22.9 million. Balance sheet strength is underscored by a current ratio of 2.37 and a quick ratio of 1.67, with modest leverage (debt/total capitalization around 39.9%). The quarter also reflects disciplined working capital management, with inventory turnover near 1.03x and a cash conversion cycle of ~50 days. Management commentary (where available) was not transcribed in the provided data; however, the financials imply continued margin discipline and cash generation. Looking ahead, the business appears positioned to sustain modest revenue growth and margin resilience, subject to consumer spending dynamics and competitive promotional environments. The valuation metrics imply a reasonable multiple given the steady cash flow generation and dividend payout, though external macro headwinds should be monitored.
Net Income: $44.17M; Net Margin: 15.04%; EPS: $0.89 (diluted $0.88); Weighted avg shs: 49.85M (diluted 50.30M)
EBITDA: $54.48M; EBITDA Margin: 18.56%
Financial Highlights
Overview of core financials and efficiency (USD, QQ3 2024):
- Revenue: $293.62M; YoY +11.86%; QoQ +3.98%
- Gross Profit: $140.07M; Gross Margin 47.71% (vs prior periods: 47.70% in Q2 2024)
- Operating Expenses: $85.59M (SG&A $85.59M); Operating Income: $54.48M; Operating Margin: 18.56%
- Net Income: $44.17M; Net Margin: 15.04%; EPS: $0.89 (diluted $0.88); Weighted avg shs: 49.85M (diluted 50.30M)
- EBITDA: $54.48M; EBITDA Margin: 18.56%
- Cash Flow: Operating cash flow $43.75M; Capex $10.15M; Free Cash Flow $33.60M; Dividends paid $17.77M
- Balance Sheet: Cash & equivalents $301.96M; Total assets $976.27M; Total debt $324.81M; Net debt $22.86M
- Liquidity: Current ratio 2.37; Quick ratio 1.67; Cash ratio 1.42
- Working Capital/Asset Metrics: Days sales outstanding 2.42 days; Inventory turnover 1.03x; Days inventory 87.54 days; Payables turnover 2.27x; CCC roughly 50.28 days
- Capital Allocation: Payout ratio 40.2%; Free cash flow per share $0.674; Operating cash flow per share $0.878; Cash per share $6.53
- Valuation context: P/E 11.90x; P/B 4.31x; P/S 7.16x; Dividend yield ~0.85%
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
293.62M
11.86%
3.98%
Gross Profit
140.07M
16.05%
5.69%
Operating Income
54.48M
28.51%
12.89%
Net Income
44.17M
26.77%
12.53%
EPS
0.89
27.14%
12.66%
Key Financial Ratios
currentRatio
2.37
grossProfitMargin
47.7%
operatingProfitMargin
18.6%
netProfitMargin
15%
returnOnAssets
4.52%
returnOnEquity
9.04%
debtEquityRatio
0.67
operatingCashFlowPerShare
$0.88
freeCashFlowPerShare
$0.67
dividendPayoutRatio
40.2%
priceToBookRatio
4.31
priceEarningsRatio
11.9
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Earnings call transcript unavailable in the provided data. As a result, management-specific qualitative insights and quotes could not be extracted. The analysis relies on the Q3’2024 filing figures and press-release style disclosures. Investors should supplement this with the actual call transcript when available to capture management tone, strategic nuance, and forward-looking guidance.
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Forward Guidance
Forward guidance is not explicitly provided in the supplied data. Given the QQ3 2024 performance, a cautious yet constructive outlook would emphasize continued margin discipline, inventory management, and promotional efficiency as key levers. Potential catalysts include:
- Moderate revenue growth supported by same-store sales and ongoing omni-channel initiatives;
- Margin resilience through favorable product mix and pricing optimization;
- Continued free cash flow generation enabling stable dividend policy and potential selective capital allocation.
Risks to monitor include: softer consumer spending in the discretionary apparel space, heightened promotional activity by peers, supply chain and freight cost volatility, and fashion risk affecting catalog mix. Investors should watch for updated management guidance on 2025 expectations, store productivity metrics, and acceleration or moderation of digital/channel sales.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0HQ7.L Focus
47.71%
18.60%
9.04%
11.90%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
The Buckle’s QQ3 2024 results portray a resilient and cash-generative retailer within the Consumer Cyclicals space. Key positives include a robust gross margin, expanding profitability, and strong liquidity with modest leverage. The quarter’s revenue growth of 11.9% YoY and double-digit EPS growth support a constructive long-term view, particularly if the company can sustain or improve its product mix, unit economics, and digital channel contributions. The stock appears reasonably valued given earnings stability and FCF generation, with dividend yield around 0.85% and a payout ratio near 40%. Risks center on consumer-spending sensitivity, ongoing promotional dynamics in apparel, and potential fashion risk. The investment thesis hinges on demonstrated margin discipline, continued cash-flow durability, and successful execution of omni-channel and product-strategy initiatives. Investors should monitor updated management commentary for 2025 guidance, operational metrics (store productivity, e-commerce growth, private-label performance), and any changes in capital allocation strategy.
Key Investment Factors
Growth Potential
The Buckle exhibits solid profitability with a high gross margin (~47.7%) and expanding profitability metrics. Potential growth drivers include continued strength in casual/apparel categories among young adults, optimization of store footprint, increased private-label share, and potential acceleration in e-commerce/digital channels. The company’s strong balance sheet and cash flow generation provide ammunition for strategic investments or shareholder-friendly actions (dividends, potential buybacks) if capital allocation remains disciplined.
Profitability Risk
Macro consumer spending softness, aggressive promotional competition, and fashion risk could compress margins. Dependency on the US market exposes Buckle to domestic economic cycles. Inventory risk exists if demand cools or shifts away from current assortments. Limited visibility on 2025 guidance due to lack of transcript data; external disruption (logistics, vendor terms) could impact cost of goods and working capital.
Financial Position
Strong liquidity position with $302.0M cash and equivalents and a modest net debt of ~$22.9M. Comfortable liquidity metrics (Current ratio 2.37, Quick 1.67) support working capital needs and capital returns. Leverage remains moderate (Total debt $324.8M; Debt/Capitalization ~39.9%), and the company generated $43.75M in operating cash flow with $33.60M in free cash flow, enabling a sustainable dividend and potential capital investments.
SWOT Analysis
Strengths
Very high gross margin (≈47.7%), indicating strong pricing power and favorable product mix.
Solid quarterly cash generation and robust liquidity (cash balance ≈$302M) with very modest net debt.
Healthy balance sheet metrics: current ratio 2.37, quick ratio 1.67, debt/capitalization ~40%.
Efficient working capital management: DSO 2.42 days, CCC ~50 days, inventory turnover ~1.03x.
Consistent dividend payout and meaningful free cash flow per share (FCF per share ≈$0.674).
Weaknesses
High reliance on the US discretionary apparel segment; exposure to consumer spending softness.
Limited information on store-level productivity and potential need for ongoing fleet optimization.
Absence of explicit forward guidance in the supplied data; visibility into 2025 remains uncertain.
Potential fashion/rate risk as consumer preferences shift and competition intensifies.
Opportunities
Expansion of private-label and exclusive product lines to sustain gross margin leverage.
Further omni-channel enhancements to deepen online revenue share and loyalty engagement.
Capital return opportunities (dividends, selective buybacks) supported by strong FCF.
Store network optimization and potential new-market or zone consolidation to boost productivity.
Threats
Macro deterioration in consumer confidence or discretionary spend.