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Investing.com - UBS reiterated its Neutral rating and $40.00 price target on Buckle, Inc. (NYSE:BKE) on Wednesday, citing limited earnings growth potential despite the retailer’s solid business fundamentals. According to InvestingPro data, the company maintains impressive gross profit margins of 59% and trades at a P/E ratio of 11.3x.
The investment firm acknowledged Buckle’s "solid playbook to drive long-term sales growth, maintain high EBIT margins, and deliver cash returns to shareholders," noting potential share gain opportunities within the U.S. Specialty Retail sector.
UBS indicated that recent meetings with Buckle’s management provided better insight into how the company is navigating macroeconomic challenges and tariff headwinds that have affected the retail sector.
Despite these positive factors, UBS expressed concern about near-term margin and earnings pressure facing the retailer, projecting Buckle’s earnings per share to grow at only a 4% compound annual growth rate over four years following fiscal year 2025.
The modest growth outlook led UBS to conclude that Buckle is unlikely to experience meaningful price-to-earnings ratio expansion, stating that "there are more attractive opportunities across our Softlines coverage universe."
In other recent news, Buckle Inc. reported its first-quarter earnings for 2025, surpassing expectations with an earnings per share (EPS) of $0.70, compared to the forecasted $0.66. The company’s revenue increased by 3.7% year-over-year, reaching $272.1 million, with a notable rise in net income to $35.2 million. This positive performance was driven by strong momentum in the women’s business segment, although men’s sales saw a slight decline. Additionally, Buckle announced a 7.2% increase in comparable store sales for May 2025, with net sales for the month rising to $88.4 million. The company has also declared a quarterly dividend of $0.35 per share, payable to shareholders on record by July 15, 2025. UBS has maintained a Neutral rating on Buckle’s stock, with a price target of $40, citing concerns about increased operating expenses and potential tariff challenges. Despite these challenges, Buckle continues to focus on expanding its private label offerings and enhancing its retail presence through store openings and remodels.
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