Buckle's Margins to Remain Under Pressure, UBS Says

02:40 PM EDT, 08/26/2024 (MT Newswires) -- Buckle's (BKE) margins are going to remain under pressure as the company grapples with challenges in footwear and more fashion-oriented categories, UBS said in a note emailed Monday.

The firm said Buckle's Q2 results reinforced its view that the company's earnings would remain under pressure given weak comparable sales and cost deleverage.

Buckle on Friday reported Q2 net income of $0.78 per diluted share, falling from $0.92 a year earlier and below the Capital IQ consensus of $0.80. Q2 sales also fell to $282.4 million from $292.4 million a year ago.

UBS said it expected Buckle's fiscal 2024 earnings to drop 19% year over year on top of the 14% decline it reported in 2023 given the headwinds.

The firm also lowered its fiscal 2025 earnings per share outlook to $3.55 from $3.70 previously and 2026 forecast to $3.75 from $3.90 before.

UBS slashed its price target for Buckle to $31 from $32 and reiterated its sell rating.

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