The Buckle, Inc. (NYSE:BKE) Q1 2017 Earnings Conference Call - Final Transcript
May 18, 2017 • 10:30 am ET
Ladies and gentlemen, thank you for standing by. Welcome to the first quarter earnings release conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. (Operator Instructions) As a reminder, this conference is being recorded.
Members of Buckle's management on the call today are Dennis Nelson, President and CEO; Karen Rhoads, SVP of Finance and CFO; Kelli Molczyk, VP of Women's Merchandising; Bob Carlberg, SVP of Men's Merchandising; Kyle Hanson, VP, General Counsel and Corporate Secretary; and Tom Heacock, VP of Finance, Treasurer and Corporate Controller.
(Forward-Looking Cautionary Statements)
Additionally, the Company does not authorize the reproduction or dissemination of transcripts or audio recordings of the Company's quarterly conference calls without its expressed written consent. Any unauthorized reproductions or recordings of the call should not be relied upon as the information may not be -- or may be inaccurate.
I would now like to turn the conference over to your host, Karen Rhoads. Please go ahead.
Thank you. Good morning, everyone. Thank you for joining the call. Our May 18, 2017, press release reported that net income for the 13-week first quarter that ended April 29, 2017, was $16.3 million, or $0.34 per share on a diluted basis. That is compared to net income of $23.1 million, or $0.48 per share on a diluted basis for the prior year 13-week first quarter that ended April 30, 2016.
Our net sales for the 13-week first quarter decreased 12.8% to $212.3 million, compared to net sales of $243.5 million for the prior year 13-week first quarter. Comparable store sales for the quarter were down 12.7% in comparison to the same 13-week period in the prior year, and our online sales decreased 7.2% to $21.8 million.
Gross margin for the quarter was 38.5%, down approximately 40 basis points from 38.9% for the first quarter last year. The decrease was driven primarily by deleveraged occupancy, buying and distribution expenses resulting from the comparable store sales decline, which had about a 300 basis point impact. That was partially offset by a 70 basis point improvement in merchandise margins for the quarter. Furthermore, gross margin benefited approximately 200 basis points as a result of the fiscal 2016 sunset of our old Primo Card loyalty program. And under that program, the rewards were recorded as a cost of goods sold at the time of redemption.
Selling expense was 22.1% of net sales for the first quarter of fiscal 2017, and that compared to 19.5% of net sales for the first quarter of fiscal 2016, with increases as a percentage of net sales in store payroll, online marketing and fulfillment, health insurance and certain other selling expenses. This was partially offset by a reduction in expense related to the incentive bonus accrual.
General and administrative expenses for the quarter were 4.6% of net sales, and that compared to 4.4% of net sales for the first quarter of fiscal 2016, with increases as