Tariffs and Merchandise Margins: Contradictions Unveiled in 2025 Earnings Calls

Revenue and Sales Growth:
- Buckle's net sales for the 13-week second quarter increased to $305.7 million, up 8.3% compared to the prior year.
- The growth was driven by an increase of 7.3% in comparable store sales and a 17.7% rise in online sales, demonstrating strong performance across both physical and digital retail channels.

Profitability and Gross Margin:
- Buckle's gross margin for the quarter was 47.4%, a 50 basis point increase from the previous year's second quarter.
- The margin expansion was due to a 10 basis point increase in merchandise margin and 40 basis points of leverage on buying distribution and occupancy expenses, indicating effective cost management and operational efficiency.

Operating Margin Improvement:
- Buckle's operating margin for the quarter was 18.4% compared to 17.1% in the prior year, reflecting a significant improvement.
- This improvement was largely due to a 65 basis point decrease in nonrecurring digital commerce investments and a 55 basis point reduction in other SG&A expenses, although partially offset by an 85 basis point increase in incentive compensation accruals.

Women's and Men's Business Performance:
- The women's business saw merchandise sales increase by about 18.5%, representing 47.5% of sales, with a significant contribution from the denim category.
- The men's business returned to growth, with merchandise sales up about 1.5%, paced by an increase of about 4.5% in the men's denim category.