Good morning and thanks for joining us this morning. Our May 26, 2023 press release reported that net income for the 13-week first quarter ended April 29, 2023 was $42.9 million or $0.86 per share on a diluted basis, which compares to net income of $55.3 million or $1.12 per share on a diluted basis for the prior year 13-week first quarter that ended April 30, 2022.

Net sales for the 13-week first quarter decreased 8.5% to $282.8 million, compared to net sales of $309.1 million for the prior year 13-week first quarter. Comparable store sales for the quarter decreased 9.2% in comparison to the same 13-week period in the prior year and our online sales were down 5.6% to $51.3 million.

For the quarter, UPTs decreased or increased approximately 2.5%, the average unit retail decreased approximately 0.5% and the average transaction value increased about 1.5%. Gross margin for the quarter was 47.1%, down 210 basis points from 49.2% for the first quarter of 2022.

The current quarter decline is the result of 140 basis points of deleverage buying distribution and occupancy expense along with a 70-basis-point decline in merchandise margins. Selling, general and administrative expenses for the quarter were 28.1% of net sales, compared to 25.6% for the first quarter of 2022.

The first quarter increase was primarily due to a 200-basis-point increase in store labor-related expenses, along with increases across several other SG&A expense categories, which had a combined 150-basis-point impact and were offset by a reduction in expense related to accruals for incentive compensation expense, which had 100-basis-point impact. Our operating margin for the quarter was 19.0%, compared to 23.6% for the first quarter of fiscal 2022.

Income tax expense as a percentage of pretax net income for both the current and prior year fiscal quarter was 24.5%, bringing first quarter net income to $42.9 million for fiscal 2023, compared to $55.3 million for fiscal 2022. Our press release also included a balance sheet as of April 29, 2023, which included the following.

Inventory of $137.7 million, which was up 13.7% from $121.2 million as of April 30, 2022 and $300 million in total cash and investments. We ended the quarter with $116.1 million in fixed assets, net of accumulated depreciation.

Our capital expenditures for the quarter were $9.3 million and depreciation expense was $4.9 million. The first quarter capital spending is broken down as follows; $8.8 million for new store construction, store remodels and technology upgrades; and $0.5 million for capital spending at the corporate headquarters and distribution center.

During the quarter, we opened two new stores, completed four full remodels, three of which were relocations into new outdoor shopping centers and closed three stores. For the remainder of the year, we plan on opening seven additional new stores and completing 13 more full remodel projects.

Buckle ended the quarter with 440 retail stores in 42 states, compared with 439 stores in 42 states at the end of the first quarter of fiscal 2022. And now, I’ll turn it over to Adam Akerson, Vice President of Finance.

Thanks, Tom. Women’s merchandise sales for the quarter were down about 10.5% against the prior year and represented approximately 47.5% of sales, compared to 48.5% in the prior year.

Average denim price points increased from $76.60 in the first quarter of fiscal 2022 and to $7.80 in the first quarter of fiscal 2023, while the overall average women’s price point increased about 4.5% from $45.45 to $47.40. On the men’s side, merchandise sales for the quarter were down about 8% against the prior year, representing approximately 52.5% of total sales, compared to 51.5% in the prior year.

Average denim price points increased from $86 in the first quarter of fiscal 2022 to $88.80 in the first quarter of fiscal 2023. For the quarter, overall average men’s price points increased approximately 3.5% from $50.75 to $52.6.

On a combined basis, accessory sales for the quarter were up approximately 9.5% against the prior year, while footwear sales were down about 39%. These two categories account for approximately 11% and 8%, respectively, for the first quarter net sales, which compares to 9% and 12% for each in the first quarter of fiscal 2022.

For the quarter, average accessory price points were up approximately 12% and average footwear price points were up 6.5%. For the quarter, denim accounted for approximately 41.5% of total sales and tops accounted for approximately 27%, which compares to 40% and 27.5% for each in the first quarter of fiscal 2022.

Our buying teams continue to introduce new brands and provide a diverse assortment of private label product. For the quarter, private label represented 44% of sales versus 42.5% in the first quarter of 2022.

During a difficult spring selling season, we were pleased with the performance of both our men’s and women’s business. Outside of footwear, which accounted for approximately half of the total sales declined for the quarter, we saw good selling across several categories.

Denim on the men’s side performed well and we believe our selection of polos, short sleeve Ts and shorts have us well positioned moving into the summer selling season. On the women’s side, denim short performed well and we anticipate that carrying through to the back-to-school season, hearing well with continued newness in our summer and fashion tops.

And with that, we will open to your questions. Thank you.

Is that better?

Oh! I’m sorry.

A couple of questions. Obviously, it’s a little bit difficult first quarter in terms of sales.

At the star level, are you adjusting labor costs to reflect the current environment, so are you seeing a little bit of that, are you doing a little bit of that?

Good morning, Jon. Yes.

We are doing our best. I mean, with the sales leverage down with the such, we have had to increase some wages with what’s going on with inflation and stuff for our teams.

But our teams are continually working the schedules and adjusting to handle that the best we can. Although the -- that cost is up over the last two years of great success where the -- they were kind of unusually low, it’s still below several years ago as far as the cost percent.

So it is on our radar and continue to work with that.

Okay. On the footwear side, obviously, there was some a lot of weakness in footwear sales and it’s coming off some difficult comps, but is there anything specific to footwear that’s behind the weakness, there’s a few new styles or do we have enough -- we all have enough shoes?

Anything specific to footwear that you see that’s behind the weakness?

Yes. In our branded casual footwear, there’s increased inventory from the brand in the market that is cut into what we were doing.

But also a year ago, we had kind of a pent-up demand for that category and so we had unusually high sales the first part of spring on the brand and so we were anniversarying tough comps. And we’ll still have some headwinds as we go through the year, but not at the same degree.

I think the sales were about $12 million in the first quarter a year ago on that, and the rest of the year, not counting December, I think, it drops to $8 million. So we’ll have a little less headwind there, but it’s kind of the part of the fashion cycle that goes on.

Yeah. Not to name names, but are we talking about Hey Dude?

That would be the key one, yes.

Okay. All right.

thank you. And lastly, Dennis, I think, you -- in the commentary, is seven new stores for the remainder of the year and that’s a little bit different than what we’ve seen in the past where it’s been somewhat limited.

What your thinking behind the additional new stores? Is the -- are there some retail openings that so to speak that just -- you find just very attractive at this time, maybe because other retailers left, but why the new store growth?

So what we’ve seen over the last couple of years is changes in markets and now we’re considering more power centers and other situations with our success that we’ve learned from that we feel good about some of these markets. And also, we see with the people moving and changes from the last couple of years, that new opportunities are being created and there’s been some good development and we’ve met some new real estate people that have given us very good opportunities to work with and opening up to the potential where we have opened in a couple of outlet stores or outlet malls that previous -- you had to be an outlet store to be part of and we would just only do our regular store and they’ve seen our success and welcome us to their projects and where they have excellent traffic and we feel that our product will work well in their centers.

That’s given us some additional opportunities as well.

Okay. All right.

thank you.

You are welcome.

Hi. Yes.

Good morning. Can you hear me okay?

Yes. Thank you.

Great. Great.

Thanks for taking our questions. I guess I wanted to ask if you saw any differences in performance by regions, anything that you would call out?

And then on the merchandise margin, what is driving that contraction, seeing that your merchant -- your private label penetration actually increased 150 basis points year-over-year?

Okay. Yes.

On the margin -- our footwear margins before were very good and we’ve seen a little drop back there. For the most part, I think, we’re also selling some branded denim that has been very good, but the margin is not as good as private label, where we kind of had low inventories a year ago on that.

And I think a couple of those things are the main point. Some of the fashion tops, where there’s better margin where that’s a little softer in the first quarter has probably had a little effect as well.

Okay. Thanks.

And about the regional performance?

I’m sorry, what?

Sorry, any callouts on the regional performance?

Oh! Sorry.

Yes.

Yeah.

The -- naturally the southern parts, especially in Texas stuff, there’s been good traffic. But I’d say, in the majority of the others there’s been enough seasonal weather that’s been challenging and that’s had an effect on most other stores.

Got it. Thank you very much.

Thank you.

Good morning. How are you?

Good morning. Good.

Carlton Getz with Winter Harbor Capital. I wanted to build on a question earlier, considering store growth just a little bit.

One of the positive features of Buckle over the years has been a very measured approach to store growth, although store counts have declined since about 2015 up until last year. Do you expect that this trajectory towards positive location growth to be a longer term trend or is it dependent on the results of the new stores that you’re opening this year?

Well, in our meetings, what we’re seeing is a lot of good opportunities to reposition stores, whether we move out of malls that are off the traffic. And as I mentioned, with the opening of power centers and other outlet opportunities for us, I don’t know if each year will be a similar amount of stores, but we’re certainly open to new stores where the opportunity creates itself.

So we’re kind of opportunity players and the -- here again we’re starting to look at 2024 and seeing some possibilities there, but we’re not ready to announce how many new ones there will be.

Sure. And then with respect to the new stores that are opening, these primarily in adjacent geographic locations to where the company already has a significant number of stores or are these further afield?

Most of them are in regions that we do very well.

Okay. And then, finally, just expanding on that a little more.

Buckle’s maintained a very high return on equity and capital investment for many years, even when sales took a hit. Has the lack of growth left some value on the table with respect to that and your thinking or how does the company approach that view in the store decline count or the count -- decline in the count of stores over the last several years until the recent upward trend?

So, as I mentioned, we’re -- we moved some of our stores out of malls, and in a lot of cases, we’ve been able to expand square footage, give the location an updated store and people have really enjoyed shopping those stores. So we’re looking at opportunities to maximize our results and I guess we feel real good about each situation we’re looking at and changing and with everything we see going on, there’s going to be some good opportunities.

But we’re still looking at covering the downside and let the upside take care of itself, which has served us well over the years.

Sure. And then if I may one last question on e-commerce sales.

Is the company’s e-commerce sales experience concentrated in the areas where you have stores or have you seen e-commerce drive brand extension in areas where you don’t have geographic locations?

But our total sales probably are best in the stores were in the states where we are strongest and continue to do well. A lot of times, we see guests go online to see the newness and then go to the store to buy.

But still where we have strength is very good, but we do a reasonable amount outside of our territories, too.

Okay. Thank you.

Thank you.

Sorry about that. Can you hear me now?

Yes. Thank you.

Okay. I apologize.

Given your store footprint, which is tends to be in like smaller cities, close but not near -- right in urban centers. Do you have any favorite economic macro indicators or metrics that you like to look at to give you a feel for forward looking the retail climate?

We don’t have any specific ones. We look at a lot of different information.

Usually, we’re -- most of the centers have traffic indicators. We look at sales of others in the centers.

We have certain retail stores that we look at, depending on the market or such. But in our areas where we are strong, we are pretty open to a lot of situations.

We have some outstanding mall stores throughout the Midwest and the larger cities and feel very comfortable with those. We are not in the Northeast cities or Southern Florida cities or the LA or San Francisco area.

But outside of that, we are open to review the majority of the markets.

Okay. Thanks.

And then my other question is kind of micro based. Last year, there was a lot of disruption in freight forwarding and companies getting inventory.

Have you guys experienced any of that or has that been pretty smooth for you so far?

I’d say for the most part it’s been pretty smooth at this point.

Thanks.

Thank you.

Great. Thanks for the follow-up.

I just wanted to ask about inventory. I see that the growth has moderated sequentially from the fourth quarter.

I wanted to if you see any, I guess, like pockets of inventory where you feel it’s still high and do you have any views or expectations on when you think the inventory growth will be more aligned with the sales growth? Thanks.

Yes. Thank you.

The -- here again for first quarter we did bring spring product in more of it for the first quarter than the second quarter, and very comfortable with our inventory levels at this point, and probably, the start of the third quarter we will definitely be more in line with how sales are going.

Perfect. Thank you.

Yeah.

If there are no further questions, we’ll conclude today’s call and thank you all for your participation and hope everyone has a wonderful holiday weekend. So thank you very much.