Good morning and thank you for standing by. Welcome to Buckle's Second Quarter Earnings Release Webcast. As a reminder, all participants are currently in a listen-only mode. A question-and-answer session will be conducted following the company's prepared remarks with instructions given at that time.

Members of Buckle's management on the call today are Dennis Nelson, President and CEO; Tom Heacock, Senior Vice President of Finance, Treasurer and CFO; Adam Akerson, Vice President of Finance and Corporate Controller; and Brady Fritz, Senior Vice President, General Counsel and Corporate Secretary.

As a review of operating results, they would like to reiterate their policy of not giving future sales or earnings guidance and have the following Safe Harbor statement. Safe Harbor statement under the Private Securities Litigation Reform Act of 1995.

All forward-looking statements made by the company involve material risks and uncertainties and are subject to change based on factors which may be beyond the company's control. Accordingly, the company's future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements.

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As a reminder, today's webcast is being recorded. And I'd now like to turn the conference over to your host, Tom Heacock..

$21.8 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 seven full remodels, one of which was a relocation into a new outdoor shopping center and close two stores, which brings our year-to-date counts to two new stores, 12 full remodels, and six store closures.

For the remainder of the year, we plan on opening five additional new stores and completing six more full remodeling projects. Buckle ended the quarter with 440 retail stores in 42 states, which is consistent with the store count at the end of the second quarter of 2023. And now we'll turn it over to Adam Akerson, our Vice President of Finance..

Thanks, Tom. Women's merchandise sales for the quarter were down about 3% against the prior year fiscal quarter and represented approximately 43.5% of total sales. On a 13-week comparable basis, women's merchandise sales were down approximately 5.5%.

Average denim price points increased from $79.10 in the second quarter of fiscal 2023 to $80.60 in the second quarter of fiscal 2024, while overall average women's price points increased about 0.5% from $42.85 to $43.15.

On the men's side, merchandise sales for the quarter were down about 3.5% against the prior year fiscal quarter, representing approximately 56.5% of total sales. On a 13-week comparable basis, men's merchandise sales were down approximately 6.5%.

Average denim price points decreased from $89.50 in the second quarter of fiscal 2023 to $89.20 in the second quarter of fiscal 2024. For the quarter, overall average men's price points increased approximately 2% from $49.25 to $50.20.

On a combined basis, accessory sales for the 13-week quarter were down approximately 4% against the prior year 13-week comparable period, while footwear sales were down about 27%.

These two categories accounted for approximately 11.5% and 5.5%, respectively of the second quarter net sales, which compares to 11.5% and 7.5% for each in the second quarter of fiscal 2023. For the quarter, average accessory price points were up slightly, while average footwear price points were up 5%.

For the quarter, denim accounted for approximately 35.5% of sales, and Tops accounted for approximately 30%, which compares to 33% and 30% for each in the second quarter of fiscal 2023. Compared to the same 13-weeks a year ago, our combined denim categories continued to outperform the total business and were down about 1.5%.

Denim built momentum throughout the quarter and was down just slightly in fiscal July. We were particularly pleased with the performance of our women's denim business being down just slightly for the quarter and up about 4.5% in fiscal July.

Our women's business also saw strength in other bottom categories with growth in both casual fashion pants and shorts for the quarter. On a combined basis, our Tops category were down about 7%. Our men's short sleeve woven business was strong for the quarter, as were our women's basics and trend silhouettes.

Additionally, we were pleased with the merchandise margin expansion for the quarter, even with down sales. We continue to be excited about the performance along with the depth, quality and variety of our private brands. For the quarter, private label represented 43% of sales versus 41% in the second quarter of 2023.

With that, we welcome your questions..

Thank you. [Operator Instructions] Our first question is from Mauricio Serna. Mauricio Serna, I'll go ahead and unmute you at this time..

Great. Good morning and thanks for taking my question.

I guess, I just wanted to get a bit more details on what is driving the online channel, significant underperformance, any particular initiatives that the company is doing there? And then on the merchandise margin, it's nice to see another quarter of expansion actually accelerating versus the previous quarter.

Maybe you could elaborate what is driving that in terms of maybe like more higher private label penetration or cost controls or management around promotions, that'll be super helpful, thank you..

Good morning, Mauricio. I'll let Dennis take the merchandise margin question first and then we'll jump into the [Indiscernible] question..

Okay, good morning. Our denim continues to be very good in sell-through and newness and we're having some nice margin expansion there, as well as our private brands continue to have solid demand and sell-through. So that's been very good as well.

The kids margins are improved and just kind of overall outside of footwear, we're very happy with the margin growth there..

And then on the e-commerce initiatives, I mean, that's been a big priority for this year, knowing that there was a gap between in-store performance and e-commerce performance last year and in the first part of this year.

So at the start of the quarter, we engaged third-parties to come in and help us and assist our teams to really do a comprehensive review of our website, focus on the shopability of the site, looking at our analytics capabilities.

And so throughout the quarter, we've made a lot of iterative improvements to the site as it relates to navigation, to filters, to checkout, product display and groupings.

The next iteration that is focusing on onsite search, but we really feel like we've made a lot of improvements to the site itself, the shopability of the site, the experience of a guest on the site and their ability to find product.

Throughout the quarter, that led to increases in conversion, increases in a lot of onsite metrics in terms of positive interaction, positive guest shopping experience on the website, also increase in AOV. So really the next version of where we're focusing is traffic. I think we talked in the first quarter, traffic has been challenged to the site.

During the quarter, we really reviewed our digital spend, marketing spend as it relates to driving traffic to e-comm. A lot of it prior to probably mid-July was focused on guest acquisition. We really pivoted to and reallocated our budget and our dollars to a more balanced approach, focused on retention and acquisition.

And I think that's paid a lot of dividends. You don't necessarily see it in the Q2 numbers, but we saw positive results in terms of traffic really late in the quarter as some of those initiatives kicked in..

There are no further questions in queue. [Operator Instructions] It looks like Mauricio has another question. Mauricio, I'll go ahead and unmute you at this time..

Great. Yes, I just had another follow-up. Thank you, first of all, for answering the previous questions, maybe on the operating expenses. You know, I remember, in last quarter, there was like a timing issue that led to like, elevated growth in general and administrative expenses.

But now I still see like it was up, you know, like total operating expenses were up 3.2%, you know, some increases in both in selling and general and administrative this time around.

I'm Just curious if you could elaborate a little bit more on what is driving that increase, given that sales are still down and any initiatives that the company's doing there to manage down those expenses, that'll be super helpful. Thank you..

Yes, thank you, Mauricio. I mean, I think if you look at it, we look at it kind of in two different buckets. We look at the selling and the G&A. I think the G&A was pretty consistent Q1 to Q2.

I mean, the increases year-over-year there are really the same things and home office payroll is the big driver there just as we continue to invest in our team here. If you look at selling, selling is where the biggest dollar increase was during Q2. The bulk of that, like we called out in the prepared remarks, was store payroll.

And so that's a combination of a couple different things. I mean, we're looking at a little bit of different periods with the shift in the calendar and the fiscal period. So that was part of it that led to an increase in hours.

But then also just to remain competitive, I mean, we've seen wage inflation and so wages for our teammates and for our managers to make sure that we're recruiting the best talent for our stores and to take care of our guests has also been a part of that. So those are really the two big -- one biggest driver there.

And then the other piece on the selling side, like we called out was the third-party relationship to help with our e-commerce..

Okay. Our next question is from Alan. Alan, I'll go ahead and unmute you at this time.

I think you should be able to unmute?.

Oh, sorry about that.

Can you hear me now?.

Yes..

Yes. Thank you..

Okay.

Yes, with the five stores that you're new stores you're opening, are those in the areas now that aren't served or haven't been served previously by a store that may have been closed?.

We have one new store we just opened this week in California that is an unserved market for us. The four other stores later this year are in the markets we are in, but we feel will be good additions or not distract too much from any of our other business. They should be very good long-term investments.

One of them might make a change after the first of the year of a store taking over from another store, but basically new markets on those..

There are no further questions in queue. [Operator Instructions] Okay, there are no further questions. I can go ahead and turn it back over to The Buckle for any closing remarks..

Well, thank you for participating today. If there are no further questions, we can wrap-up the call. We thank everyone for participating and hope you all enjoy the rest of the day..