Ladies and gentlemen, thank you for standing by. Welcome to the First Quarter Earnings Release Conference Call. [Operator Instructions] As a reminder, this call is being recorded. Members of Buckle's management on the call today are Dennis Nelson, President and CEO; Karen Rhoads, Vice President of Finance and CFO; Pat Whisler, Vice President of Women's Merchandising; Bob Carlberg, Vice President of Men's Merchandising; Kyle Hanson, Corporate Secretary and General Counsel; and Tom Heacock, Treasurer and Corporate Controller. As they review the operating results for the first quarter, which ended April 28, 2012, they would like to reiterate their policy of not giving future sales or earnings guidance and have the following Safe Harbor statement. Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. All forward-looking statements made by the company involve material risks and uncertainties and are subject to change based on factors, which may be beyond the company's control. Accordingly, the company's future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. Such factors include, but are not limited to, those described in the company's filings with Securities and Exchange Commission. The company does not undertake to publicly update or revise any forward-looking statements, even if experience or future changes make it clear that any of projected results, expressed or implied therein, will not be realized. 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 be inaccurate. I would now like to turn the conference over to our host, Karen Rhoads. Please go ahead.

Thank you, and good morning, everyone. Thank you for joining our call. Our May 17, 2012, press release reported that net income for the first quarter, ended April 28, 2012, was $37.8 million or $0.79 per share on a diluted basis. That was up from 13% -- that was up 13% from net income of $33.5 million or $0.71 per share on a diluted basis for the prior year first quarter that ended April 30, 2011. Net sales for the 13-week first quarter increased 9.9% to $263.8 million, and that's compared to net sales of $240.1 million for the prior year first quarter. Our comparable store sales for the quarter increased 7.4%. And online sales, which are not included in comparable store sales, increased 15.1% to $19.7 million. Gross margin for the quarter was 43.3%, up 40 basis points from 42.9% for the first quarter last year. The improvement was driven by the leveraging of certain occupancy and distribution costs, which had about a 50 basis point impact and was partially offset by an increase in expense related to the incentive bonus accrual, which had about a 10 basis point impact. Our merchandise margins for the quarter were even with the first quarter of last year. Selling expense for the quarter was 17.5% of net sales, which was a reduction of approximately 30 basis points from the first quarter of fiscal 2011. The reduction was driven by decreases, as a percentage of net sales in bank card fees, in Internet-related fulfillment and marketing expenses, which were partially offset by an increase in the expense related to the incentive bonus accrual. General and administrative expenses for the quarter were 3.8% of net sales, up approximately 10 basis points from the first quarter of fiscal 2011. Increases in expense related to accrued vacation pay and equity compensation expense were partially offset by the leveraging of certain other general and administrative expenses. Our operating margin for the quarter was 22% compared to 21.4% for the first quarter of fiscal 2011. Other income for the quarter was $1.8 million, which compares to $1.6 million for the first quarter of fiscal 2011. Income tax expense as a percentage of pretax net income was 36.8% for the first quarter of both fiscal 2012 and 2011, bringing net income to $37.8 million for fiscal 2012 versus $33.5 million for fiscal 2011, an increase of 13%. Our press release also included a balance sheet as of April 28, 2012, which included the following: Inventory of $97.0 million, which was up approximately 8% from inventory of $89.9 million at the end of the first quarter of fiscal 2011; and total cash and investments of $259.9 million, which compares to $236.5 million at the end of fiscal 2011 and also compares to $226 million at the same time a year ago. As of the end of the quarter, inventory on a comparable store basis was up approximately 6%, and total markdown inventory was approximately even with the same time a year ago. A reduction in inventory in the 1/3-off category was offset by an increase in merchandise in the 20% off category. We also ended the quarter with $170.9 million in fixed assets, net of accumulated depreciation. Our capital expenditures for the quarter were $8.8 million and depreciation expense was $7.9 million. Capital spending for the quarter was broken down as follows: $7.9 million for new store construction, store remodel and store technology upgrade; and $0.9 million for capital spending at the corporate headquarters and distribution center. We still expect our fiscal 2012 capital expenditures to be in the range of $32 million to $36 million. Also, as an update on our ongoing project to replace our point-of-sale software in our stores, we began the full rollout during the first quarter, and currently, over 1/2 of our stores are running on the new software. The rollout will be completed for all remaining stores during the second quarter of fiscal 2012. For the quarter, UPTs decreased approximately 2%, the average transaction value increased approximately 7% and the average unit retail increased approximately 8.5%. Buckle ended the quarter with 431 retail stores in 43 states compared to 422 stores in 41 states at the end of the first quarter of fiscal 2011. Additionally, our total square footage was 2.156 million square feet as of the end of the quarter compared to 2.108 million square feet at the same time a year ago. At this time, I'd like to turn the call over to Tom Heacock, our Treasurer and Corporate Controller.

Good morning, and thanks for joining us. I'd like to start by highlighting the performance from our various merchandise categories that led to our net sales increase of 9.9% for the quarter. Men's merchandise sales for the quarter were up approximately 10%, with strong categories including denim, knit shirts, active apparel, accessories and footwear. Average denim price points increased from $89.80 in the first quarter of fiscal 2011 to $91.45 in the first quarter of fiscal 2012. For the quarter, our men's business was approximately 39.5% of net sales compared to approximately 39.5% last year, and the average men's price points increased approximately 4.5% from $51.55 to $53.75. Women's merchandise sales for the quarter were also up approximately 10%, with strong categories including denim and casual bottoms, woven tops, active apparel and footwear. Average denim price points increased from $90.30 in the first quarter of fiscal 2011 to $96.15 in the first quarter of fiscal 2012. For the quarter, our women's business was approximately 60.5% of net sales compared to approximately 60.5% last year, and average women's price points increased approximately 9% from $43.80 to $47.75. For the quarter, combined accessories sales were down approximately 0.5%, and combined footwear sales were up approximately 14%. These 2 categories accounted for approximately 7% and 5.5%, respectively, of first quarter net sales, which compares to approximately 7.5% and 5.5% for each in the first quarter of fiscal 2011. Average accessory price points were up approximately 1% and average footwear price points were up approximately 11%. For the quarter, denim accounted for approximately 44.5% of sales and tops accounted for approximately 30%, which compares to approximately 44.5% and 31.5% for each in the first quarter of last year. Our private label business was flat as a percentage of net sales for the quarter and represented approximately 30% of sales. During the quarter, we did not open any new stores but completed 6 substantial remodels. As of the end of the quarter, 305 of our 431 stores were in our newest format. For the full fiscal year, we anticipate opening 10 new stores, including 2 that have already opened in May and one additional for spring, 5 for back-to-school and 2 for holiday. We also still anticipate completing 20 substantial remodels and several smaller remodeling projects during fiscal 2012. Additionally, planned promotional events during the second quarter include a Hurley gift with purchase and sweepstakes in June and our annual denim gift with purchase and sweepstakes and a gift with purchase event with Roar in July. And with that we'll open it up to your questions.

[Operator Instructions] Our first question comes from the line of Simeon Siegel from JPMorgan.

So there's no question you've done a great job driving the top line through these AUR lifts. Can you just talk about how you're thinking about your comp metrics going forward? Do you expect to show an improvement in units? And maybe you can talk about how you expect to drive those. Are you assuming any improvement in transaction? Anything there would be helpful. And then, I know we bring it up pretty often, but could you talk a little bit about your stance on inventory? You obviously, ended this quarter really healthy position, below your sales growth. I think over the past few quarters, you had spoken to potentially building that level strategically to hit certain product areas. So any color on how you're approaching your inventory,guys, going forward would be helpful. And then lastly, do you have any color on your Natick, Vegas stores, how they're performing? I don't know if you guys spoke to those, that would be helpful.

Regarding the inventory, we had mentioned in the end of the third quarter and the end of the fourth quarter that we had brought in some denim earlier, as well as building our inventories to take advantage of what we thought was missed sales previously. And the flow of our inventory will continually change, as we're always buying to maximize our business or be prepared for business. We are very happy with where we're at with our inventory right now. And the best estimate for the end of the second quarter would probably be about the same increase in inventory as we had at the end of this first quarter. As far as forecasting on transactions or units per transaction, we're addressing the inventory status of our accessories, which per units per transaction probably had a little effect. There's always cycling out of different hot categories. I think a year ago, first quarter, we were up somewhere around 30% in accessories. So being flat this year was, I think, due to the cycling out -- just not having the right levels of inventory, because we didn't see the right product in certain categories and such. But I think we've addressed that. The team's doing a nice job, and we're optimistic on that part going forward. As far as stores in general, we've been happy with our new stores. The new areas of -- always start a little slower but have been doing fine. And as far as our Vegas store, we're very happy with that store. And our teams in the stores throughout the country are doing an excellent job. So we're very pleased with that.

And our next question comes from the line of Paul Alexander with Bank of America Merrill Lynch.

Could you stay on inventory for just a moment and explain, maybe give us a little color as to what happened during the quarter with inventory receipts or how quickly you're bringing in inventory. It seems days payable are down pretty significantly, so were deliveries late? Or did you just cut deliveries off on the back end? And if you did, what does that imply for your ability to drive comps in second quarter?

Well, I think, at the end of the fourth quarter, we had brought some product in early. With the Chinese New Year, it always seems to affect some of our spring shipping. And we've learned over the years that on certain categories, we want to be sure to have for the early part of February and such that we need to bring those in before the Chinese New Year starts and such, so -- and the previous year, I think, some people have been late on deliveries, so the buildup there was not only, as I mentioned, to take advantage of not having enough inventory in previous years, but also getting set up for spring. And we're in the fashion business and as we deliver new product in all categories almost daily, and there's a continual flow. Sometimes there's reasons to be more aggressive early. Sometimes we take a break and clean things out and ready to reload. So it's kind of a -- we're not just buying a couple of categories or real basic stuff, so it's a moving business. And sometimes you could get deliveries like the last week of the month that might show it up a little bit, or next time you might get them the next week after the quarter close. So the inventories can vary for different reasons. Does that answer?

Kind of. Would you say that you're currently in a period where you're taking a break or reloading? Have you been cutting off any receipts?

No. We, basically -- I mean, there's always something that would be late or something that doesn't get shipped that has an effect that we don't have control on or such. But I think on some of the adjustments we needed to make earlier, we did. And now, this time, it seems like it's more of a consistent level where -- I mean, I can't say this business is normal, but basically, we still have a steady flow of new product, and we're looking to turn goods and do business the best we can.

Okay, that's great. And then just one follow-up. On the online business, any thoughts on the deceleration there in first quarter, and what you're thinking for the rest of the year there?

I have not studied that. My one thought might be that we had a little less promotional product to clear out on store one. But that's kind of a hunch. Outside of that, we expect it to grow but not necessarily going to forecast at what level.

Our next question comes from the line of Margaret Whitfield with Sterne Agee.

I was wondering about women's denim. Last month, April, it was negative. Right now, there's limited colored denim in the store. I guess it's a question as to whether or not this trend will last. I wonder what your thoughts are on colored denim and on your women's denim business, in particular, that's question number one? And question number two, 10 stores opening this year. Might we see a lift in the number of new store openings in the following year?

Regarding the new stores, it's too early to comment on 2013 yet, as we're still looking at possibilities and opportunities. As regard the colored denim, we had some color in, more casuals early. As the team was shopping, we added some color in through the spring, probably more in the shorts or crops, for the most part. We have color -- a degree of color coming in as we go through back to school. But in total, it's still going to be a small part of our denim mix. And I think with the earlier warm weather compared to last year's weather, you probably had some guests going for the denim shorts and some of the other categories that might have -- we had strong gain in the active wear part of our business, so that might have had an effect. But for the quarter, we are very happy with our denim business. So Pat, do you have anything on the color?

Just to reiterate what Dennis had mentioned, we were really happy with the strong results that we ended the quarter with. We also had some new receipts just recently on color in full length and casuals and denim, which will add to the mix. And then we continue to see color as part of our mix going into the next season. So we're confident with the look, along with unique details, but it will be a small part of our business.

Our next question comes from line of Adrienne Tennant with the Janney Capital Markets.

My first question is about the price points within the denim category, particularly -- well, actually, on both of the men's and the women's businesses. Can you talk about other styles? Is there any movement in the percentage of branded to private label? Anything that helps us understand where the consistency of those price increases. So if you can start with that, that would be great.

Sure. Well we've been very successful with some of our branded denim in the stores that are definitely at higher price points, close to $100 up to -- we're selling some Rock Revival's that are in the $160s give or take. And so we've had good response there, both -- and on the Rocks, both on men's and women's. And so our BKE brand is still doing well and working for us. But we've added the layers on in the branded business that have raised those price points up for us.

Okay. And where -- at least for Q1, what's the branded penetration this Q1 versus last year, last Q1?

Well, our private label was basically flat. As far as for Q1, I'm not sure if I looked at that for breaking that out for denim. Do you guys have any information on that?

But if you have private label for the total business, that's fine too, because half of your business is denim.

That was about 30%, right?

Correct.

And pretty flat on a year-over-year basis?

Yes, Adrienne.

Okay, great. And then, Pat, just to follow-up on the colored skinny leg, is the customer sort of telling you that so many other places to buy the colored skinny leg and there's so many different price points, that maybe your denim, which last year, I think, was 47% of total sales, the offering that you have is more differentiated and she's coming in for that specifically, so that she -- maybe you don't need as much as the colored skinny leg as some other competitors are showing?

What we tried to do is give them a selection like we would do on all our categories. We didn't, by any means, walk away from our core business, which just great denim selection with unique details and finishes, and that continues to be very strong. And when we see a trend come through like that, we treat it as a complementary part of the business like we would skirts or dresses or other things that trend. So we would want to have that as part of the mix, but don't think it really takes away from our core business or things that we have going on there.

Our next question comes the line of Tom Filandro with Susquehanna International Group.

I guess, the first question is on the POS rollouts, or at least the first quarter. I think you said it's going to be counted [ph] to the entire organization fleet by I think second quarter. Can you kind of tell us what efficiencies you believe you'll gain from that rollout? And does this mean now you're ready to roll out of the POS loyalty program? And then I have 2 follow-ups.

On the POS, I mean, I think 2 of things right now is it does bring us into PCI compliance. I mean, that was one of -- making sure that we're totally in compliance is always a big concern to us. It does allow us to take pin-based debit, which we were not able to take before. It does not mean that we're quite ready to roll out electronic loyalty, Tom, that's a great question. And that is kind of the next phase of the project.

Any thoughts on when that might happen? I feel like you guys have been testing for it while, Karen.

We have. I don't have a definite date on there. Again, we want to make sure that when we do it, that we do it the best way we can for the stores, and so we don't want to...

Yes, we wanted to get the new POS system in before back-to-school and get that rolling. There's meetings on the clientele-ing [ph] and that project started already. But that will definitely be the second phase. And it will not be put in this year.

Follow-up question is -- and I'd be very curious, if we get into Gimmicks and BKE Sport, how that performed? And just sort of the penetration of it and is there a view that it will continue to be sort of a -- 2 sub-brands that grow in the business, any thoughts on those 2 would be great. And then one more, and I'll be done.

Well, the Gimmicks response, for the ones not familiar with it, is fashion tops that the ladies come up with this label and kind of their own fashion look based on the success of other things in the store, and so we're very happy with that. And I think those should be out to probably over half the stores by back to school. So we're very pleased with that. And the trends will kind of determine the future of that. And the BKE Sport has been received well and is good. It's very small, and the team is continually coming up and testing new ideas in fabrics there. Pat, do you have any comments?

I would just add on the BKE Sport that we'll be launching, hopefully in about mid-July, BKE Sport for the ladies side, as a complement to what the men's have been working on. So that'll be something we can look forward to there. And as Dennis mentioned, the Gimmicks line has been received very well, and so we'll just add that to designed in-house. And so we are just working to keep a nice steady flow there and grow it as sales warrant.

Yes. Bob, do you have any comments on the men's sport?

Yes. The -- I mean, like Dennis said, it was well received. Although we've still got a lot to learn there, and I think we're -- we'll continue to get better. We'll have more long sleeve that'll compliment the shorts and the true workout t's that we delivered for spring.

Great, thank you. And then one final one, Dennis. Just your AUC outlook, I'm sorry if you answered earlier, I was off for a short while. But I seem to recall that you had not a huge impact on AUC during back-to-school fall. But clearly, there was categories where you saw high-single to low double-digit increases. I figured that was outerwear, maybe sweaters. Can you just walk us through what you're thinking about in terms -- or what you're seeing so far in terms of costing for the back half?

Yes. I think we'll see some improvement as we go through second quarter. And in the men's side, you'll probably see even more improvement from some of the sweaters or outerwear, although both are smaller categories for us, as well as some improvement in the denim costing and such, as well as woven shirts. So that should be beneficial. The ladies will see some increases as we get later in the year and such. Although with the brands last year, in a lot of the categories, the ladies tend to be less affected last year with some of the cost increases than the men's.

Our next question comes from the line of John Kernan with Cowen.

Just wanted to follow up on the previous AUR question. You had 12 straight months of increasing AUR. How do you view AUR going into the back half of the year, the effects of continually increasing AUR on merchandise margin? What -- how do you view merchandise margin internally in the back half of the year as you cycle some easier comparisons?

The average retails we would probably see being pretty consistent or close to what they've been first quarter as we go through back-to-school. We focus on more the product of what our guests want and the selection, the variety there. And we don't internally get to focus on the margin. I mean, that's part of it, but we want to make sure that we have the right product and selection for the guests. So that's kind of where we put our emphasis.

Okay. Is there a mix benefit that's going on within AUR? Is it actually -- are you raising prices? Or is it -- it's somewhat of -- is it a mix that's driving that? Just trying to understand what's driving the AUR consistently?

Well, the improvement of branded denim, especially on the ladies side, is driving those higher retails. And denim is such a big part of our business that it has a substantial effect on all our price increases. On a lot of the other categories, you're probably seeing very similar prices, maybe sometimes even little less, but it all comes down to the product is always changing, always different, could be different fabrics, different looks or styles. So that changes as the season and the trends go.

Okay. And then one final question. Your cash balance is up significantly year-over-year. Just any change in how you view special dividends or maybe share repurchase going at the back half of the year?

I don't think we have any comments on that. We just continually review with the board at each meeting.

Our next question comes from the line of Edward Yruma with KeyBanc Capital Markets.

This is Jane in for Ed. Most of my questions have been asked, but I just have one last one. On the vacation accrual that was referenced earlier, would you detail out the impact of that as the rest of the year goes on?

Well, I think -- a bit of a change, I think, in the way that we accounted for that, and previously, we've accrued more of it at the beginning of the year, and now we're doing it throughout the year as the vacation is earned. I think the impact in the first quarter is probably $700,000. And I think we'd expect it to be less going through the rest of the year, but there should be some impact in each quarter.

Okay, great. And are there any other one-off items similar to that in SG&A or G&A that we should be thinking about for the rest of this year?

I don't believe so, no.

And our next question comes the line of Dana Telsey with Telsey Advisor Group.

Can you tell us a little bit about -- as you're thinking about new stores, what's happening on the real estate cost of new stores? What kind of comps do you need to leverage occupancy costs? And how long does it take a new store to be profitable? In addition to, what are you seeing out there in the real estate development community?

Well, we're in markets from communities like our home office Kearney, Nebraska to the Mall of Americas, the NorthParks in Dallas. I mean, we have a wide range of centers. And naturally, the -- what the industry refers to B malls doesn't always refer to a B mall for us. But each situation, the economics can be different, there's a wide variety. The majority of our stores, we think, could certainly be profitable after the first year, if not before. We feel very good about that. And we're continually working on new projects. We have a convention next week, which we always see a lot of opportunities and learn quite a bit from. But overall, we see the climate pretty favorable for the most part. We have a lot to offer for the malls. So as far as getting good locations and fairness on the economics of the deal, seems to work out in most cases. So we're optimistic on what's available and what we're looking at. Hopefully that answers that.

Our next question comes from the line of Brian Delaney with EnTrust.

So on the inventory, I think someone asked earlier about the days payable, but payable's down pretty meaningful year-on-year. Is that a timing issue or change in terms, or just where we stood at the end of the quarter from an inventory deliveries perspective?

Yes, it's where we said at the end of the quarter by inventory delivery. That was the primary difference.

So the days payable -- this new level that we're seeing in the first quarter, should we assume this level going forward, or is it just an anomaly?

I mean, it will really depend upon the flow of the product, that -- how it flows throughout each quarter where it's going to be at the end of the quarter.

Yes, I mean, last year there might have been some shipments that were late and some that were early that might have adjusted some of the numbers. Hopefully, we'll have the flow as we want this year. But I think it's not unusual that we would bring down our full-length denim inventory to some degree for this time of the year and then with all the newness that we want to bring in for back-to-school. So we're offering fresh product and styling and detail. So that would probably be a little more traditional, but it doesn't always work out that way.

And Dennis, at the end of last quarter, I thought you had kind of guided to a low to mid teens-type inventory growth. We came in at, obviously, at below that. Is it -- once again, is it a timing issue, or did something change in terms of what you thought the opportunities out there were for inventory build?

I think I was -- as I remember, it was more the low-teens estimate. And like I say, there are so many variables in our business. Whether we didn't reorder maybe some t-shirts that are on shorter delivery, if people shipped early or just the sell-through on -- I mean, there's a lot of variables. So being within a couple points of it, I think is pretty accurate, because it's just tough to call.

And the comp inventory up 6, did you give a breakdown where we sit units versus price year-on-year?

We did not. But I think units are up probably mid-single digits, and then the cost would be low-single digits.

Within the comp or within total inventories, same kind of breakdown?

Both, yes.

[Operator Instructions] And so far, we have no else queuing up.

Okay. Well, thank you very much.

Okay. I think we're done then, Mary.

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