The Buckle, Inc. (NYSE:BKE) Q1 2019 Earnings Conference Call - Final Transcript

May 24, 2019 • 10:00 am ET

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The Buckle, Inc. (NYSE:BKE) Q1 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

(Operator Instructions) And first in line, Tiffany Kanaga with Deutsche Bank. Please go ahead.

Analyst
Tiffany Kanaga

Hi. Thanks for taking our questions. Can you detail for us your sourcing exposure to China, what impact you felt so far from tariffs and how you might be preparing for additional increases? Also, if we do go to 25% for the next tranche of apparel, how would you consider passing through increases to your pricing, given your current initiatives to reduce denim price points to more competitive levels? Thanks.

Executive
Dennis Nelson

Well, good morning, Tiffany. In the past, last year, we had about a 50% exposure to China, and we are consistently reviewing our sourcing, and we're adding new vendors to address that. And some of our key vendors are looking at other places of production outside of China as we work through this process. But our flexibility helps us manage our product development as we work with national brands and private brands, and we've already diversified and have made product in a lot of different countries to give us options. That said, having a very good long-term relationship with our key vendors, both national brands and our private brands, helps us during this potential tariff situation as things like every -- we have a long-term view as well as our vendors that love doing business with us, so I think we'll continue to work on that to handle this potential increase in tariffs the best we can. So, we're looking to continue with the best value and quality in our products, and I think we'll have options. And with our vendors, we'll be able to do so going forward.

Analyst
Tiffany Kanaga

Thanks so much. And if I could ask a follow-up. Would you give some additional brand color and call-outs around what's working well for you and where in your assortment you still see white space to add new brands to your mix? Thanks.

Executive
Dennis Nelson

Well, we don't necessarily call out new brands. We continue to have a lot of exclusive product with our brands, and we continue to evolve with key partners in the $60 to $80 price point in denim. We are shopping like in ladies with several new footwear companies or -- and not necessarily brand new to us but expanding our selection with them.

And I'll refer to Bob and Kelli if they want to add to that.

Executive
Kelli Molczyk

For women's, we just continued to shop the market and evaluate where it makes sense, so I wouldn't say we have any predetermined plans on where we might add brands. But if something pops up that makes sense, we would obviously want to review it.

Executive
Robert Carlberg

And for men's products, same. I mean, we're consistently looking for new brands. But like most things, we'll test and react as we go. We've seen some growth in like Hey Dude and some of those places that we have started small, and that's usually how we'll go about it is to look for that and then look to build it.

Analyst
Tiffany Kanaga

All right.