'Tis the season for retailers' holiday sales. However, investors can also look for major bargains right now in retail, and here's one example: Buckle's
This youthful teen retail stock's taken a bit of a beating from its recent highs. In the last year, Buckle's shares had risen to around $48, but they're now trading at less than $40. The retailer took a drubbing after its most recent quarterly tidings, which is, in a word, bizarre. Buckle increased its third-quarter net income by 11% to $38.3 million, or $0.81 per share. Sales rose a healthy 12% to $273.4 million, and same-store sales surged by 9%.
This is great performance in the current economic climate, and those results even beat analysts' expectations, but still, apparently that wasn't good enough for many investors. Nor was Buckle's 6.9% increase in same-store sales in November.
There's a lot to like about Buckle, including some lesser-known initiatives that help it compete with retail rivals like Abercrombie & Fitch
Buckle consistently keeps its youthful clientele coming back for more by intentionally stocking clothing that's different than that of rivals, building cred with fashion-forward young people. It carefully monitors its merchandise to track what's working for its customers (and to limit what's not), offering major high-end brands like Guess?
If many investors have unbuckled themselves from Buckle recently, they're missing out on the big long-term picture regarding a very well-run retailer. As for the current opportunity, Buckle's trading at just 12 times forward earnings -- about in line with the multiples attached to rivals like the ones noted above -- and a PEG ratio of a reasonable 1.12. Meanwhile, its current share price weakness seems detached from the reality of its recent impressive financial performance, making this stock a great bargain right now.
Here's an easy way to keep up with the ever-changing, fickle retail universe:Alyce Lomax owns shares of Urban Outfitters. The Motley Fool owns shares of Fossil, Aeropostale, and Guess?. Motley Fool newsletter services have recommended buying shares of Fossil. Motley Fool newsletter services have recommended writing covered calls in Guess?. Motley Fool newsletter services have recommended shorting Fossil. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.