Karen Rhoads – VP Finance, CFO Dennis Nelson – President, CEO

Thomas Filandro – Susquehanna Financial Group Shaun Smolarz – Sidoti & Co. Marc Bettinger – Stanford Group Company

Thank you. Good morning everyone.

I’ll start off reviewing some of our financial results and then I’ll turn it over to Dennis who is calling in from the road today. But to start off with, our March 11th 2008 press release reported our net income for the fourth quarter that ended February 2nd 2008 was $29.1 million or $0.94 per share on a diluted basis and that compared to $22.1 million or $0.73 per share on a diluted basis for the prior year quarter that ended February 3rd of 2007.

Our net income for the fiscal year ended February 2nd 2008 was $75.2 million or $2.44 per share on a diluted basis and that compared to $55.7 million or $1.86 per share on a diluted basis for the fiscal year that ended February 3rd, 2007. Our net sales for the 13 week fourth quarter increased 18.3% to $207 million compared to net sales of $175 million for the prior year 14 week fourth quarter.

Compared to the same 13 week period in the prior year, our comparable store sales for the quarter increased 18.7% and total net sales for that 13 week comparison increased 25.2%. Our net sales for the 52 week fiscal year increased 16.9% to $619.9 million from net sales of $530.1 million for the prior year 53 week fiscal year.

And compared to the same 52 weeks of the prior year, our comparable store sales increased 13.2% and our total net sales increased 18.7%. Gross margin for the quarter improved approximately 120 basis points to 44.4%.

This improvement was driven by an increase in merchandise margins which had about a 65 basis point impact and also by leveraging buying occupancy and distribution costs which had about a 95 basis point impact and then also by a reduction in the stock option compensation expense for the quarter. These improvements were partially offset by an increase in expense related to the incentive bonus accrual.

For the fiscal year, our gross margin improved approximately 200 basis points to 41.1%. This improvement was driven primarily by an increase in merchandise margins which had about a 100 basis point impact and by leveraging buying, distribution and occupancy costs which had a 120 basis point impact and then those improvements were partially offset by an increase in the expense that’s related to the incentive bonus accruals.

Selling expense for the quarter was 18.5% of net sales which was a reduction of approximately 180 basis points from the fourth quarter of fiscal 2006. The decrease was driven primarily by reductions as a percentage of net sales in stock option compensation expense, store payroll expense, advertising expense and by the leveraging of certain other selling expenses.

And these improvements were partially offset by an increase in our bank card fees as a percentage of net sales. For the fiscal year, selling expense was 19.2% of net sales which was a reduction of approximately 110 basis points from the prior year.

The decrease was driven primarily by reductions as a percentage of net sales in store payroll expense, stock option compensation expense, advertising expense and again by the leveraging of certain other selling expenses. These improvements were partially offset by increases in expense that related to our incentive bonus accruals, bank card fees and health insurance expense.

General and administrative expenses for the quarter were 5.1% of net sales which was an increase of approximately 30 basis points from the fourth quarter of fiscal 2006. The increase was primarily attributable to an increase in expense related to the incentive bonus accrual which was partially offset by a reduction in equity compensation and by the leveraging of certain other G&A expenses.

For the full fiscal year, general and administrative expenses were 4.2% of net sales which was an increase of approximately 30 basis points from the prior year. This increase was primarily attributable to increases in expense related to the incentive bonus accrual and equity compensation expense related to outstanding shares of non vested stock which were partially offset by the leveraging of certain other G&A expenses.

Our operating margin for the quarter was 20.7% compared to 18.1% for the fourth quarter of fiscal 2006. For the full fiscal year, our operating margin was 17.7% compared to 14.9% in the prior year.

Other income for the fourth quarter was $2.6 million compared to $3 million for the fourth quarter of fiscal 2006. For the fiscal year, other income was $9.2 million which compares to $9.0 million for fiscal 2006.

This increase in other income was due to an increase in income earned on our company’s cash and investments, which was partially offset by the impact of other income recognized during the second quarter of fiscal 2006 that related to previously mentioned proceeds from insurance claims and from settlement on a lawsuit with the Visa Mastercard interchange fees. Income tax expense as a percentage of pretax net income was 36.2% for the fourth quarter of both fiscal 2007 and fiscal 2006 bringing fourth quarter net income to $29.1 million for fiscal 2007 versus the $22.1 million for fiscal 2006 an increase of 31.7%.

Income tax expense for the full fiscal year was 36.7% of pretax net income in both fiscal 2007 and fiscal 2006. This brings our full year net income to $75.2 million in the current year versus $55.7 for the prior year, an increase of 35%.

Our press release also includes the balance sheet as of February 2nd, 2008 which included some of the following, inventory of $77.6 million which was up 20.4% from inventory of $70.3 million at the end of fiscal 2006. Our total cash and investments totaled $248.4 million compared to $183.4 million at the end of fiscal 2006.

Our short term investments include $88.9 million in auction rate securities and please note that in the current year balance sheet, $56.9 million of auction rate securities have been classified as long term investments. The auction rate securities that are included in the long term investments have not had a successful auction subsequent to our fiscal year end.

Our investments in auction rate securities are all stated at fair market value which approximates par value. And subsequent to the end of our fiscal year, we have successfully liquidated $62.6 million of the $88.9 million of auction rate securities that are classified as short term investments at the end of the year.

We also ended the year with $102.3 million in fixed assets net of accumulated depreciation and our capital expenditures for the year were $27.5 million and depreciation expense was $20.4 million. For the quarter, our units per transaction increased approximately 1%, the average transaction value increased approximately 4% and the average unit retail increased approximately 2.5%.

For our full fiscal year, our UPTs increased slightly. The average transaction value increased about 3.5% and the average unit retail increased approximately 2.5%.

Additionally, during the fiscal year we increased our average sales per square foot from $302.00 per square foot in fiscal 2006 to $335.00 per square foot in fiscal 2007. We also increased our average sales per store, going from $1.49 million in fiscal 2006 to $1.67 million per store in fiscal 2007.

The Buckle ended the year with 368 retail stores in 38 states compared to 350 stores in 38 states at the end of fiscal 2006. With the opening of two new stores so far during fiscal 2008, we currently operate 370 retail stores in 38 states.

And with that, I’ll now turn the call over to Dennis Nelson our President and CEO.

Thank you Karen. Good morning.

I would like to start by highlighting the performance from our various merchandise categories that led to our net sales increase of 18.3% for the fourth quarter and 16.9% for the full fiscal year. Men’s merchandise sales for the fourth quarter increased approximately 24.5%.

Highlights were denim and woven and knit shirts, each of which experienced double digit sales growth. Our average denim price points increased from $70.65 in the fourth quarter of fiscal 2006 to $75.85 in the fourth quarter of fiscal 2007.

For the quarter our men’s business was approximately 47.5% of net sales compared to approximately 45% last year. And the average men’s price points increased from $46.20 in the fourth quarter of fiscal 2006 to $47.55 in the fourth quarter of fiscal 2007.

For the fiscal year, men’s merchandise sales increased approximately 20.5%. Highlights include denim, woven and knit shirts, active apparel which would be men’s shorts and sweaters, each of which experienced double digit sales gains.

Average denim price points increased from $70.15 in the fiscal 2006 to $74.40 in fiscal 2007. For the full fiscal year, our men’s business was approximately 45% of net sales compared to approximately 43.5% in the prior year and the average men’s price points increased from $42.40 to $43.55.

On the women’s merchandise, sales for the fourth quarter increased approximately 13.5%. Highlights were denim, knit tops and outer wear, each of which experienced double digit sales growth.

Average denim price points increased from $75.45 in the fourth quarter of fiscal 2006 to $79 in the four quarter of fiscal 2007. For the quarter our women’s business was approximately 52.5% of net sales compared to approximately 55% last year.

And the average women’s price points increased from $41.60 in the fourth quarter of fiscal 2006 to $42.40 in the fourth quarter of fiscal 2007. For the fiscal year, women’s merchandise sales increased approximately 14%.

Highlights were denim, woven and knit tops and active apparel which all experienced double digit sales growth. Our average denim price points increased from $74.00 in fiscal 2006 to $77.85 in fiscal 2007.

For the full fiscal year our women’s business was approximately 55% of net sales compared to 56.5% in the prior year and the average women’s price points increased from $39.15 to $39.80. For the quarter, combined accessory sales were down approximately 6% and combined footwear sales were down approximately 15%.

These two categories accounted for approximately 8% and 4.5% respectively of fourth quarter net sales which compares to approximately 10.5% and 6% for each in the fourth quarter of fiscal 2006. Average accessory price points were down approximately 5.5% and average footwear price points were down approximately 10%.

For the fiscal year, combined accessory sales were down approximately 2% and combined footwear sales were down approximately 6%. These two categories accounted for approximately 7.5% and 5.5% respectively of fiscal 2007 net sales which compares to approximately 9% and 7% for each in fiscal 2006.

Average accessory price points were down approximately 6% and average footwear price points were down approximately 7.5%. For the quarter, denim accounted for approximately 45% of our sales which compares to approximately 46.5% in the fourth quarter of last year.

For the full fiscal year denim accounted for approximately 43% of our sales compared to approximately 44.5% in fiscal 2006. Our private label business was down slightly as a percentage of net sales for both the fourth quarter and for the full physical year due to the strength and variety of selection in our branded merchandise but continues to represent approximately one-third of sales.

As Karen mentioned, total inventory at the end of the year was up approximately 10.4% but our total mark down inventory at the end of the period was down compared to the same time a year ago. During the fourth quarter we opened two stores, two new stores and completed on substantial remodel bringing our full count for the full fiscal year to 20 new stores and 7 substantial remodels.

As at the end of the fiscal year, 148 of our stores were in our newest format. We anticipate opening 19 new stores during fiscal 2008, including two stores in Maryland which will represent our entry into the 39th state.

By season we anticipate 9 of the new stores for spring, 7 for back to school and 3 for holiday. We also anticipate completing 13 substantial remodels during fiscal 2008.

Based on this we expect our fiscal 2008 total cap expenditures to be in the range of $30-$32 million. Given our strong financial position and consistent performance we remain committed to enhancing value of our shareholders.

With that in mind we’ve increased our quarterly dividend rate in the third quarter bringing our annual dividend rate to $1.00 per share and we also repurchased 642,500 shares during the fiscal year at a total cost of $21.6 million leaving us with 237,600 shares remaining on our current authorization. In closing, we are pleased with our results for both the quarter and the fiscal year and feel that both our people and our product have us well positioned for continued success in 2008.

And with that, we welcome your questions. Thank you.

Thank you I actually have a couple of questions. First congratulations on just a tremendous job.

Are you guys seeing, I mean look most feel we’re in a recession, are you guys seeing any regional variance in the business? That’s my first question.

My second question is given the strong gross margin experience in 07 what opportunities are there or do you see to grow gross margins in 08? And then my third question is I see you increased the dividend, you’re buying a little bit of stock back, I mean the stocks been up a lot but you have over $8.00 in cash per share, is there a comfort level of cash that you like to have on the balance sheet?

Thank you.

This is Dennis. On the regional variance, you know we see most of our areas as pretty strong.

We get questioned about Florida and several of our new stores have just opened recently in Florida so we don’t have a long experience there. For the most part we’ve been happy to very happy with all our new openings and we see maybe a little bit of sales off in Michigan a little bit in a couple areas and then some areas are strong.

So overall our variance is mainly due to the performance of our store managers. On the opportunity for gross margin growth, the team has been doing a very good job of eliminating mistakes and improving opportunities on the gross margin.

It’s at a point that we’re probably not promising improvement there although we won’t give up trying to improve it. And on the strong balance sheet of cash, you know we review that quarterly at our Board meetings but we feel especially at this time, having a very strong balance sheet and working with our developers and our vendors, there’s a lot of advantage to having their comfort of how strong we are.

So we will keep that in mind as we review.

Thanks Dennis.

Hi, good morning everyone. My first question is how surprised were you with the fourth quarter same store sales results and also with February, were they like much better than you even imagined?

I would say yes. I mean we had some strong sales last fall so we felt fairly confident going into holiday we would have a good season but the results would have exceeded any estimates we would have had.

And we also felt good about our product going into February and what was going on, but we would have never estimated a 24 comp.

You mentioned that you thought that store management has really enabled the company to stand out from the competition and even in this tough retail and economic environment, can you just elaborate on like what about the store management did you think enabled for the excellent results?

Well I think we’ve done a nice job with our sales management team in improving managers or recruiting a better staff of managers with our sales meetings, our videos, everybody’s learning and growing together that way. But just with stronger teams it creates even attracts better teammates, creates a fun environment to shop, they’re doing a better job of presenting our product.

We’ve added a lot of new fixtures for all stores over the past couple years to help in the presentation. But then also the better the staff, they do a great job of being able to fit almost any guest into a pair of jeans that looks nice, is comfortable, we kind of emphasize that finding that favorite denim fit.

And our strongest stores you know do a great job of satisfying the guest and making a long term guest out of their shopping experience.

And I think this question is probably for Karen, could you just go over again the exposure to the auction rate securities?

Sure, you know of the auction rate securities at the end of the year, we split them between short term investments and long term investments. And the portion that we took to long term investments had not had a successful auction since prior to the end of the fiscal year and that would include both failed auctions and ones that had not come up for reset yet.

And you know I think that we just feel, I think, pardon me we have a little footnote on the balance sheet and I don’t know if you’ve had time to read that Shaun but I think because we can’t predict the timing of when those auctions will be successful, we took the position to move those all to long term, although some of those you know may be liquidated or have successful auctions prior to that. But that was our standpoint that we took at the end of the year as we continued to look at the auction rates and review those.

But then as we also mentioned, subsequent to February 2nd, we have sold over $62 million worth of our auction rate securities and have those at the current time or part of our cash and cash equivalents now.

Alright so since the end of the fiscal 2007 you said you sold $62 million of auction rate?

$62.6 million actually, yes.

Alright and at the end of the year the total exposure was $57 million and the $89 so the total exposure was $146 million?

Right.

Okay, understood. And do you have any concern over the remaining auction rate securities?

At this time no we don’t Shaun.

And from an expense management perspective, how is the company prepared to react if same store sales trends slow down and then turn negative later this year?

Well we’ve had our inventory pretty well managed last year where we were flat, up a little, down a little. So we understand there’s a tough environment out there.

We’ve raised the inventory a little bit at the start of this year based on I think just a better product selection and that we think it’s a cleaner inventory than before. And so the product, you know we respond to selling and what’s going on and so we feel pretty good about our product selection or management staffs will have flexibility with their payroll if they need to reduce hours that way.

But we just continually try to be as smart as we can about the business process during the good times and if it gets tougher we’ll take the same approach.

And then one of my last questions would be what do you attribute the weaknesses in accessories and footwear to and have you considered exiting those areas and replacing them with strong categories if it comes down to that?

I think the accessory market was very strong a few years ago and you know the belt trend was very hot, maybe even a little before that the watch market was very hot. And we see accessories continue to cycle in and out and they’ll always be a part of our business but it just depends how much newness or what our guests are looking for and we try to respond.

You know a couple years ago we didn’t have bags or purses and that’s been a good category for us. So we just try to stay on the trends.

We don’t see it going away. Our best estimate or guess would be that those categories have probably leveled out to their low points of our business.

And in the footwear business, you know we’re careful there because it can be a tricky business. But it’s still a good business for us, a profitable business.

On the gal’s side depending on what’s going on in the market, we’ll try to buy accordingly and overall that’s worked pretty well this year. In the guy’s side the flips and sandals have been good, we’re looking for a good season on that.

The brown shoe part of it, there’s not much going on now and I think the team did a good job of reducing inventory and minimizing mark downs. So we’re in a good position there once we find some things that we think will work in the store.

And the last question just on housekeeping could you just repeat the sales per square foot number for 2006 and 2007 and also the cap ex expectation for this year?

Sales per square foot for the year that just ended were $335.00 and that compared to $302 for the prior year. And cap ex we have a range of $30-$32 million is what we’re looking at right now.

Alright, thank you very much.

Hi Karen, hi Dennis, how are you? Congratulations on a dynamite quarter and year.

Really fabulous. Karen a few quick questions, the 19 stores is that net or gross?

For 08, that is gross.

That’s gross, okay what are you thinking net number is?

We won’t really decide if there’s any stores we’re going to close probably until next holiday January. We don’t have any stores planned to close at this time.

We closed I think one last January.

Okay and the cap ex of $30-$32 million, that’s also a gross number?

Yes it is.

Okay so the [ten] in allowance is how much?

[Ten] in allowance at this point in time would be budgeted to be $5-$6 million.

$5-$6 million. Okay and Dennis what did you say for the year, the increase in the price points were on I guess the men’s and women’s side?

On the ladies side women’s price points increased from $39.15 to $39.80. And on the men’s price points they increased from $42.40 to $43.55.

Okay now for those increased, what accounts for that?

Well I think some of it is attributed to where we’ve added more branded merchandise and selling some higher price denim. And there’s probably also been some net price points that have been higher than we’ve sold the year before or sold more of it.

And maybe a small amount of less mark down to clear.

Okay so it’s less mark downs, some price point increases and just really something in mix of higher price point brands? Does that sound right?

Yeah.

Okay and it looks like last year the comp was largely made on really a fantastic increase in transactions. What would you attribute that to, it looks like double digit trend, just about double digit increase in transactions for the year, what would you attribute that to and can you break it out between traffic and an increase in conversions?

We don’t really have any way to track traffic so that would only be speculation. I just think as we mentioned previous that our staff if better and doing a nice job and we’re probably with our denim being strong, I think we’re kind of a destination for a lot of people coming in that they’re coming and know that they’re probably going to find denim or something new to buy.

And we’re also probably stretching our age a little bit on some of the guests that have shopped us for many years that we’re finding and hearing from our stores that we’re having ladies in the 30’s, 40’s and up that are buying denim from us as well, especially in certain markets where we’ve been there for a while. So I think it’s just a combination of those things.

Okay well the thing is though you’ve always had phenomenal customer service, the sales associates have always done a great job, I think you’ve been a destination for a long time so what was different about 2007 as opposed to 2006 when you had a flat comp in 06 and a 13% comp in 07? I mean it’s a breakout year.

Well I think we did, the merchandisers did a great job of adding more brands, a better variety of selection to our guests at different price points and the brands, the variety giving us different looks so it attracted a wider range of guests probably.

Okay so then as you look forward, what’s your sense in being able to sustain this or increase it?

Well we’re not going to give projections of where we see the sales going but we’re certainly taking…

No I mean your comfort level.

Yeah I mean we still feel good about our product mix and our merchandising teams are working hard in developing new product and trying to build off other winners that we have going. So you know as we mentioned at the end there that we think our people and our product are well positioned to continue our success.

Okay and I guess lastly, Dennis are you basically surprised by the year of just how good things turned out?

Yeah I would say yes, I mean we expected to have a good year and felt real good about our product and people all the way along but would never have guessed to have the sales increases we did have.

Okay so it seemed that even to your expectations this was something of a spectacular year?

True.

And the backdrop of a recession in the second half of the year.

Uh huh.

Okay so then you’re not planning 2008 for in terms of inventory and so on for this kind of year again, correct?

Well you know we work very closely or as close as we can but as I mentioned we think we have positioned ourself to have a good 08 and we’ll plan accordingly.

Okay but does that mean a low single digit comp or are you planning for, you know, after seeing what you did are you planning for a double digit comp?

Well I don’t think we’re giving that guidance.

Okay well in that case, listen best of luck and congratulations again.

Hey, two questions, actually three. First, Karen can you just give us a sense of what same store sales growth do you need to leverage both occupancy and SG&A and maybe Dennis or Karen can you give us an update on your West Cost brand push, any kind of customer response on that front?

And then I have a final question, related to just sales per square foot, strong growth obviously at 9%, what are you seeing in productivity gains in the newer store openings over the last couple of years, in particular those new markets where I would consider them more A markets as opposed to B markets, thank you.

On the leverage, I couldn’t speak to the selling and the general and administrative expenses. Looking on the occupancy costs, on there, haven’t had a lot of time to study last year yet, but typically I would say historically we’ve looked at needing about 2% comp to leverage the occupancy cost.

And I’m sorry, on the SG&A front Karen you said you just haven’t done the math yet on that?

Correct.

Okay thank you.

And Tom your question about the West Coast brands, could you say kind of what you’re looking for there?

I’m just kind of, I know right now you currently, there’s an invent in trying to push some of these West Coast brands or at least sort of get a read on how they might perform in the stores, so kind of tell us, maybe you could tell the audience what it is exactly that you’re doing and whether or not you’re seeing a noteworthy customer response, any particular brands emerging as winners.

Okay well this marketing event we’re doing is, we’re encouraging people to try on hopefully shorts or swimwear, board shorts, if they want to do it with denim that’s fine. And we have a Buckle bag that we can give that they can use to go to the beach and shorts and stuff and then we also have an opportunity where they can go online to win other prizes that the West Coast people are helping us offer.

But the promotion just started this last week so it’s a little early to stay there’s any reads but based on February we’ve had on our early receipts, we’ve had some nice response. And you know and so what we try to do with our promotions is get the guest and our teammates to interact and one of the best things that can happen if they try on our product and see that our product fits well, it’s comfortable, it looks good one, then whether they buy it today or another day, it works out well for us and that’s something we’ve done with our denim over the years, so we just tried to put a twist of the spring product with that.

Thanks and then the sales per square foot question.

In the new markets?

Yeah I’m just kind of curious about the productivity performance you’re seeing in the newer markets versus older markets.

You know we’re very happy with our new store openings and usually in the bigger markets and a new store we ramp up to the store average or better quicker than several years ago. Karen do you have any other comments on that?

No I think you’re right Dennis I mean you know part of it is just the demographics of those markets that we’re opening in in general, in the current year compared to some of those smaller markets or middle markets in the past.

And when you guys first open up those stores do you tend to open up those stores with a fairly as you are consistently in other stores, conservative inventory commitments?

For the most part we have an idea of what the markets going to be like and so we’ll try to match a store that we think would sell similar product and also the quantity that we think would be good. So we will fill the store according to our estimate of that.

But we don’t bring, we almost never bring any sale product in or old product, so sometimes depending on the time of year it opens, they might open a little light on inventory.

Is there an opportunity to still see comp growth out of those stores in the future is sort of what I’m getting at?

Yeah especially after the 13th, 14th month.

Terrific, alright thanks again.

Okay Karen a quick follow up, [ten] allowances for 2007 I take it would have been around the 4, 5 number?

For last fiscal year, I don’t have that with me to be honest.

No problem. Alright everything related to the auction rate securities, bottom line do you have principle at risk here?

You know I think there’s always probably principle at risk. Right now we feel like everything that we have is strong rated, its good paper so you know I can’t say there’s no risk because that’s the market.

But we feel very good about the auction rate securities that we have in our portfolio.

Okay so the 248 that you altogether you think is a pretty good number that you’re going to have going forward?

Well the 248, I mean the 248 was made up of cash and cash equivalents, the auction rates, some short term and long term municipal bonds as well as some US government bonds. So I mean there was a wide variety of paper that makes up the $248 million at the end of the year.

Okay and your occupancy, buying and distribution, do you have that in an absolute number or a percent of sales? If you took collectively for 2007 the occupancy, buying and distribution, what was the total number on that?

I don’t know that we usually give that out Marc.

Okay, alright so no even like historical numbers or…

I think just what we’ve disclosed in our financial statement.

Okay, great, alright, thank you.

Alright well I don’t think that we have anything else from the Buckle end, do we Dennis?

No, thanks for calling in and we appreciate your interest.