Bookkeeping: Initiating Position in Buckle (BKE)

Submitted By Trader Mark
Buckle (yle="font-weight: bold;" class="blsp-spelling-error" id="SPELLING_ERROR_0">BKE) is a retailer I've been watching for most of 2008 - along with Aeropostale (ARO) it's been one of the few "youth" retailers to do well during the past year. (Urban Outfitters (URBN) is the other name working in this niche) Today it is down 10% in early trading on 21% same store sales - expectations were apparently higher as the stock is selling off 10%ish. I'm fine with it when most of its peers are reporting negative 7-10% same store sales. This is going into the yin versus our typical yang part of the portfolio - i.e. things that should rally when Kool Aid drinkers scream at us about the coming US recovery.

Technically, the stock has been range bound for a good 5 months. In the retail world that's considered a "breakout" :) (i.e. many peers are down 40-60% in the same time) So it is all relative. We can now buy on the bottom of this range with an easy stop loss below $44, its 200 day moving average.

Fundamentally is is trading at 15x forward earnings which actually makes it cheaper than the names we looked at yesterday. Also the chain is small enough that it has not saturated the U.S. unlike many of its larger competitors so we can get new store openings as another growth avenue. Now, taste in this space is fickle so we don't know how long we'll own it, but in these economic times it seems to be thriving. Earnings will be Aug 21.

We started with a medium sized 1.5% allocation into this name with a purchase at $46. Again it if begins to break down (below 200 day moving average of $44) we'll take our loss and scurry into something else that's working like an airliner ;) Or bank. Or auto maker. Ahem.

The Buckle, Inc. (BKE - News) announced today that comparable store net sales, for stores open at least one year, for the four-week period ended August 2, 2008, percent from comparable store net sales for the four-week period ended August 4, 2007. increased 20.9. Net sales for the four-week fiscal month ended August 2, 2008 increased 28.7 percent to $57.0 million from net sales of $44.3 million for the prior year four-week fiscal month ended August 4, 2007.
Comparable store net sales for the 13-week second quarter ended August 2, 2008 increased 27.8 percent from comparable store net sales for the prior year 13-week second quarter ended August 4, 2007. Net sales for the 13-week fiscal period ended August 2, 2008 increased 36.6 percent to $169.8 million from net sales of $124.3 million for the prior year 13-week fiscal period ended August 4, 2007.
Comparable store net sales year-to-date for the 26-week period ended August 2, 2008 increased 26.7 percent from comparable store net sales for the 26-week period ended August 4, 2007. Net sales for the 26-week fiscal period ended August 2, 2008 increased 34.5 percent to $330.1 million from net sales of $245.4 million for the prior year 26-week fiscal period ended August 4, 2007.

Offering a unique mix of high-quality, on-trend apparel, accessories, and footwear, Buckle caters to fashion-conscious young men and women. Known as a denim destination, each store carries a wide selection of fits, styles, and finishes from leading denim brands, including the Company's exclusive brand, BKE. Headquartered in Kearney, Nebraska, Buckle currently operates 381 retail stores in 39 states compared to 362 stores in 38 states as of August 7, 2007. During fiscal July, the Company opened four new stores in the following locations: Virginia Beach, Virginia; Augusta, Georgia; Palm Desert, California and Pearland, Texas.

Long Buckle in fund; no personal position

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