Buckle, Inc. (Buckle (BKE)) shares fell on Friday despite better-than-expected quarterly results, as investors weighed margin pressure from tariffs and rising occupancy costs.

The retailer highlighted strong momentum in women's and kids' apparel, but higher expenses tied to store expansion and remodeling activity remained a focus.

Quarterly Details

The company reported first-quarter earnings per share of 92 cents, beating the analyst consensus estimate of 74 cents. Quarterly sales of $288.735 million (+6.1% year over year) outpaced the Street view of $287.679 million.

Comparable store net sales increased 5.1% from the prior-year period. Online sales rose 2.8% to $47.7 million, compared to $46.4 million a year ago.

Gross profit increased to $133.476 million from $126.976 million a year ago. But gross margin declined 50 basis points year over year to 46.2% from 46.7%, as higher occupancy and merchandise costs outpaced sales growth.

The company exited the quarter with cash and equivalents of $266.164 million.

Earnings Call Takeaways

Women's business remained the primary growth driver, with sales increasing 11% and representing 52% of total revenue. Kids apparel continued to deliver strong momentum, rising 16%, as management identified the category as a significant long-term growth opportunity.

Private-label penetration increased to 48% of sales, highlighting continued customer adoption of Buckle-owned brands.

Occupancy expenses jumped 66.6%, driven by higher rent and depreciation associated with recent store openings and remodeling projects. The company accelerated its store expansion strategy, completing six new store openings, seven remodels, and two closures year-to-date.

Management expressed confidence in the health and quality of inventory despite inventory levels increasing 13.5% from a year ago. Higher fuel-related freight surcharges affected both inbound and outbound shipping costs, although executives described the impact as manageable.

The company disclosed that it has filed tariff refund claims but has not yet received any material financial benefit. Meanwhile, stronger profitability resulted in higher incentive compensation accruals during the quarter, though management expects some of that pressure to moderate as the year progresses.

BKE Price Action: Buckle shares are trading lower by 5.84% to $47.70 at publication on Friday.