Good morning, and thanks for joining us this morning. Our March 15, 2024 press release reported a net income for the 14-week fourth quarter ended February 3, 2024 was $79.6 million, or $1.59 per share on a diluted basis, compared to net income of $87.8 million, or $1.76 per share on a diluted basis for the prior year 13-week fourth quarter ended January 28, 2023.

Net income for the 53-week fiscal year ended February 3, 2024, was $219.9 million, or $4.40 per share on a diluted basis, compared to net income of $254.6 million, or $5.13 per share on a diluted basis for the prior year 52-week fiscal year and to January 28, 2023. Net sales for the 14-week fourth quarter decreased 4.8% to $382.4 million compared to net sales of $401.8 million for the prior year 13-week fourth quarter.

Comparable store sales for the 14-week fiscal quarter decreased 9.6% in comparison to the same 14-week period in the prior year, and online sales decreased 12.4% to $65.5 million for the 14-week fiscal period, which compares to $74.8 million for the prior year 13-week fiscal period. Compared to the same 14-week period a year ago, online sales were down 16.6%.

Net sales for the 53-week fiscal year decreased 6.3% to $1.261 billion compared to net sales of $1.345 billion for the prior year 52-week fiscal year. Comparable store sales for the 53-week fiscal year ended February 3, 2024 decreased 8% from the prior year 53-week period ended February 4, 2023.

Our online sales were down 10.3% to $206.5 million for the 53-week fiscal year, compared to $230.4 million for the prior year 52-week fiscal year and compared to the same 53-week period a year ago, online sales were down 11.8%. For the quarter UPTs increased approximately 0.5%.

The average unit retail increased approximately 1.5% and the average transaction value increased about 2%. For the full year, UPTs were flat.

The average unit retail increased approximately 1% and the average transaction value increased approximately 1%. Gross margin for the quarter was 52.3%, down 70 basis points from 53% in the fourth quarter of 2022.

The current quarter decline is the result of deleveraged buying, distribution and occupancy expenses partially offset by a 20 basis point improvement in merchandise margins. For the full year gross margin was 49.1%, which was down 120 basis points from 50.3% in the prior year, with the current quarter decline being due to deleverage buying, distribution and occupancy expense along with a 20 basis point reduction in merchandise margins.

Selling general administrative expenses for the quarter were 27.1% of net sales compared to 25.6% for the fourth quarter of 2022. The fourth quarter increase was due to 150 basis point increase in store labor related expenses, a 35 basis point increase in marketing spend, a 30 basis point increase in G&A salaries, a ten basis point increase in equity compensation expense and a 25 basis point increase in other SGNA expense categories, and these increases were partially offset by a 60 basis point reduction in incentive compensation accruals and a 40 basis point decrease in ecommerce shipping expenses.

For the full year SG&A was 27.6% of sales compared to 25.9% for the same period last year. The full year increase was due to 135 basis point increase in store labor related expenses, a 30 basis point increase in G&A salaries, a 25 basis point increase in marketing spend, a 20 basis point increase in equity compensation expense, and a 20 basis point increase in other SG&A expense categories and these increases were again partially offset by a 60 basis point reduction in incentive compensation accruals.

Our operating margin for the quarter was 25.2% compared to 27.4% for the fourth quarter of fiscal 2022, and for the full year our operating margin was 21.5% compared to 24.4% for the same period last year. Income tax expense as a percentage of pretax net income for both the current and prior year fiscal quarter was 23%, bringing fourth quarter net income to $79.6 million for fiscal 2023 compared to $87.8 million for fiscal 2022.

Income tax expense as a percentage of pretax net income for both the current and prior year full year periods was 24%, bringing net income to $219.9 million for fiscal 2023 compared to $254.6 million for fiscal 2022. Our press release also included our balance sheet as of February 3, 2024, which included the following.

Inventory of $126.3 million, which was up about 1% from the same time a year ago, and total cash and investments of $315.4 million, which was after payment of $196.7 million in dividends during the year. We ended the quarter with $128.8 million in fixed assets of accumulated depreciation.

Our capital expenditures for the quarter were $9.3 million and depreciation expense was $5.9 million. For the full year, capital expenditures were $37.3 million and depreciation expense was $20.8 million.

Fiscal 2023, capital spending was broken down as follows, $35.9 million for new store construction, store remodels and technology upgrades, and $1.4 million for capital spending at the corporate headquarters and distribution center. During the quarter, we opened four new stores and completed four full store remodels, two of which were relocations into new outdoor shopping centers.

We also closed three stores, bringing our full year counts to nine new stores, 18 full remodels and six store closures. Of our 18 full remodels during the year, 11 were relocations to new outdoor shopping centers, reflecting our ongoing strategy of ensuring that we are located in the best shopping environment in each of our markets.

Cumulatively, over the last three years, 42 of our 56 full remodels have been relocations to new outdoor centers. Besides making better locations, these remodels also frequently enable us to take on more space with our new stores.

For two of our recent projects, the extra square footage allowed us to close our standalone new store and move everything back under one roof. Current plans for fiscal 2024 include opening eight new stores and completing 15 to 19 full remodel projects with at least half of the planned being relocations to new outdoor centers.

We also have closed two stores year-to-date with two additional planned store closures in early April. Buckle ended the year with 444 retail stores in 42 states, compared with 441 stores in 42 states at the end 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 8% against the prior year fiscal quarter and represented approximately 41% of sales compared to 42.5% in the prior year.

On a 14-week comparable basis, women's merchandise sales were down approximately 12.5%. Average denim price points increased from $79.75 in the fourth quarter of fiscal 2022 to $81.25 in the fourth quarter of fiscal 2023, while the overall average women's price point increased about 1.5% from $50.30 to $51.

On the men's side, merchandise sales for the quarter were down about 2% against the prior year fiscal quarter, representing approximately 59% of total sales compared to 57.5% in the prior year. On a 14-week comparable basis, men's merchandise sales were down approximately 5.5%.

Average denim price points increased from $86.25 in the fourth quarter of fiscal 2022 to $87.15 in the fourth quarter of fiscal 2023. For the quarter, overall average men's price points increased approximately 3% from $54.50 to $56.05.

On a combined basis, accessory sales for the 14-week quarter were down approximately 7.5% against the prior year 14-week comparable period, while footwear sales were down about 41%. These two categories accounted for approximately 11% and 6% respectively, of fourth quarter net sales, which compares to 10.5% and 9% for each in the fourth quarter of fiscal 2022.

For the quarter, average accessory price points were up approximately 1.5% and average footwear price points were up 10.5%. Denim accounted for approximately 44% of sales and tops accounted for approximately 29.5%, which compares to 41.5% and 30% for each in the fourth quarter of fiscal 2022.

Our women's denim business for the quarter was down about 6.5% compared to the same 14-week period a year ago. While the overall women's denim business was down, we were excited about the continued growth in the performance of our premium fits and fabrics in our Buckle Black label, which grew about 18.5% during the quarter.

Our core BKE line also performed better than the average. For tops, our fashion tops continued to be challenging, with many of our women's guests focusing on essential styles and easy to wear pieces.

Also, compared to the same 14-week period ago, our men's denim business was down about 1%, which was primarily the result of reducing our inventory of street fashion brands. In our core denim brands, we saw positive trends for the quarter with the business in BKE and Buckle Black both improving year-over-year.

The men's business had a nice performance in short sleeve tees, soft shells and vests in several of our accessory categories. We also saw strong sell-throughs in our private branded wovens, knits and sweaters for the quarter.

Our Q4 comparisons also continued to be challenged with declines in our Hey Dude volume, particularly on the men's side. Fourth quarter net sales for our men's business without Hey Dude compared to the same 14-week period a year ago were down about 1.5%.

During the quarter we continued to see nice growth in our youth business, with combined youth business growing approximately 4% over the prior year 14-week period. Our overall private brand penetration continued to grow as our buying teams continued to develop and deliver a strong assortment across all categories.

Private label represented approximately 50% of Q4 sales compared with 48% a year ago and 46% for fiscal 2023, compared with 44.5% in fiscal 2022. And with that, we welcome your questions.

Thank you.

Great. Good morning.

Thanks for taking my questions. I just wanted to know maybe you could talk about a little bit about what happened in February with the 11.5% comp sales [ph] decline, what were the main drivers behind that and how are you thinking about it for the rest of the quarter?

And then maybe on the merchandise margin, nice to see the miles expansion in Q4, maybe if you could talk what was the driver behind that and how are you thinking about it for 2024? And then just lastly, just wanted to check the numbers that you talked about the store openings, I think you called out 18 new stores and closing four stores.

So net openings were 14, it just appears to be like a very nice acceleration compared to previous years. So I just was wondering what is driving that?

Thank you so much.

Okay. Thank you, Mauricio for the questions.

If I could take a quick moment before answering to just thank our Buckle teammates for a very successful 2023. I appreciate our team's great work in creating an enjoyable shopping experience for our guests, and I'm very much looking forward to working with our Buckle talent in 2024.

Now, regards to the questions, February business, I think we saw less excitement on the new spring product. Shorts selling, which was very strong a year ago, was down.

We brought probably some of our girls top selection for spring. We brought that in a little bit later, so we had an effect there.

Still saw pretty good denim selling and a good reaction. But I think the traffic patterns were down some as well.

On the increase of new stores locations, a few years ago, we did not do outlet situations, and a year or two ago, we did a store in an outlet with Tanger. That is our regular store, even though it's in an outlet and that worked pretty well.

And so we have a good relationship with Tanger and Simon on reviewing what used to be strictly outlet to do our stores as a typical store and that's worked well. So it's given us more options as well as we've seen some changes in some smaller markets in the past couple of years.

That has given us opportunities as we looked outside to locations and power centers and such, which we did not before. So like a Poplar Bluff, last year that we opened in Missouri was an example of that, and that has worked well.

So that's given us new opportunities there. And did I miss a question?

Mauricio, this is Tom. I'll just clarify.

I think you were asking about 2024 new store plans and remodel plans. What we said was eight new stores for 2024 is what we have planned, 15 to 19 full remodels, with half of the remodels being relocations to new outdoor centers.

And then for now, we've already closed two stores so far this year, and one of those is a new store moving back into the full line store, so it's all under one roof and then we have two more planned early in April.

And then I think the last question was on merchandise margin drivers for the fourth quarter. Merchandise margins for all of 2023 hung in really strong and improved as we went through the year.

The team did a great job of managing inventory, I mean, managing markdowns. And so part of that is mix shift, some of that private label at 50% I think that's an all-time high at private label, that's been accretive to margins.

A little bit of benefit from freight costs coming down and then partially offset by a slight increase in shrink during the year. So those are the main drivers for Q4 margins which are pretty consistent with Q3.

Thank you. Just a couple of follow-ups.

Maybe if you could elaborate a little bit more on what you're seeing in footwear. It seems the category continues to be challenged despite you are lapping maybe already some impacts last year from Hey Dude being soft.

Maybe if you could elaborate on that? And then you talked about how you have been doing a lot of remodelings and repositions of the source, a lot of these two off mall locations.

Maybe could you remind us at this point like roughly what is your off mall versus mall exposure? Thank you.

Yeah, the mall exposure. Again, we've had a large number of remodels and broke that out, how many we've moved off malls.

We're still primarily mall based and then a lot of lifestyle centers, I think still 70% mall based. And so Brad and Dennis do a great job of reviewing that situation by situation to again make sure we're in the best shopping center.

So there's probably still more opportunities to continue that trend.

Yes. And on the Hey Dudes, last year $40 million of our business was down in Hey Dude footwear.

It was close to half of our total loss for the year. And I think the team did a good job of managing inventories to the right level.

We still had some good sell-throughs there, but at much different inventory levels. As far as new footwear going forward, we're starting to see a little bit of excitement in the gal's product and stuff, but nothing that's going to replace the Hey Dude volume at the present time.

Good morning. This is Nancy Frohna with 1492 Capital Management.

Just a quick question. Have you seen any meaningful change in the way your customers are paying for their purchases, whether it's sort of the buy now, pay later mode or any meaningful differences over time?

Good morning, Nancy. Thanks for the question.

I don't think we've seen real meaningful shifts. I think it's been pretty consistent.

We do offer buy now, pay later services, which we have for several years, and it's really small in store and obviously much bigger online. But I don't think that we've seen meaningful shifts in payment methods this year.

Good. Thank you and congratulations on another excellent quarter.

My question relates to the store refreshes that are ongoing and can you share with us the kind of success that the refresh store generates in terms of maybe average sales increase?

Well, thank you Alan for the question. It's a little difficult to say because we've come off such record years, but we're finding that the outdoor centers we're going to is about 30% larger, and we're finding the guest is staying longer in the store, enjoying the ability to see more presentations and such there.

And in cases where stores maybe have been in an older mall that has not kept up, when we move it we're seeing some very nice gains on those locations. Other locations might be a very solid store, but we're improving the location in the future set up and so you don't see as big a gain.

But as I mentioned, we're coming off a couple of record years and doing these changes. We feel very good that this is the path to take, but I can't give you a clear growth number to put down.

Thank you everybody for your participation in joining us today. We hope you have a wonderful day and enjoy your weekend.

Thank you.