UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q





xQUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF


THE
SECURITIES EXCHANGE ACT OF 1934





For the
Quarterly Period Ended May 1,
2010





 ̈TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF


THE
SECURITIES EXCHANGE ACT OF 1934





For the
Transition Period from ____________ to ____________





Commission
File Number: 001-12951





THE BUCKLE, INC.


(Exact
name of Registrant as specified in its charter)





Nebraska
            47-0366193(State
      or other jurisdiction of
            (I.R.S.
      Employerincorporation
      or organization)
            Identification
      No.)





2407
West 24th Street, Kearney, Nebraska  68845-4915


(Address
of principal executive offices)     (Zip
Code)





Registrant's
telephone number, including area code: (308) 236-8491





Securities
registered pursuant to Section 12(b) of the Act:





Title of class
                
                Name of Each Exchange on Which
      RegisteredCommon
      Stock, $.01 par value
                
                New
      York Stock Exchange





Securities
registered pursuant to Section 12(g) of the Act: None




___________________________________________________________


(Former
name, former address, and former fiscal year if changed since last
report)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes þ  No  ̈





Indicate
by check mark whether the registrant  has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for a shorter period that the registrant was required to
submit and post such files). Yes  ̈  No  ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. (See
definition of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act).


þ Large
accelerated filer;  ̈ Accelerated filer;
 ̈ Non-accelerated
filer;  ̈ Smaller
Reporting Company





Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes  ̈ No þ





The
number of shares outstanding of the Registrant's Common Stock, as of May 28,
2010, was 46,730,695.





THE
BUCKLE, INC.





FORM
10-Q


INDEX




PagesPart
      I. Financial Information (unaudited)Item
      1.
                Financial
      Statements
                3Item
      2.
                Management's
      Discussion and Analysis of FinancialCondition
      and Results of Operations
                16Item
      3.
                Quantitative
      and Qualitative Disclosures About Market Risk
                24Item
      4.
                Controls
      and Procedures
                24Part
      II. Other InformationItem
      1.
                Legal
      Proceedings
                25Item
      1A.
                Risk
      Factors
                25Item
      2.
                Unregistered
      Sales of Equity Securities and Use of Proceeds
                25Item
      3.
                Defaults
      Upon Senior Securities
                25Item
      4.
                Reserved
                25Item
      5.
                Other
      Information
                25Item
      6.
                Exhibits
                25Signatures
                26




2




THE
BUCKLE, INC.




BALANCE
SHEETS


(Amounts
in Thousands Except Share and Per Share Amounts)


(Unaudited)





May 1,
                        
                        
                        January 30,2010
                        
                        
                        2010ASSETSCURRENT
      ASSETS:Cash
      and cash equivalents
                        
                        $
                        131,417
                        
                        
                        $
                        135,340Short-term
      investments
                        
                        
                        22,887
                        
                        
                        
                        22,687Accounts
      receivable, net of allowance of $20 and $35, respectively
                        
                        
                        4,942
                        
                        
                        
                        6,911Inventory
                        
                        
                        84,741
                        
                        
                        
                        88,187Prepaid
      expenses and other assets
                        
                        
                        19,313
                        
                        
                        
                        11,684Total
      current assets
                        
                        
                        263,300
                        
                        
                        
                        264,809PROPERTY
      AND EQUIPMENT
                        
                        
                        323,086
                        
                        
                        
                        305,974Less
      accumulated depreciation and amortization
                        
                        
                        (164,553
                        )
                        
                        
                        (159,392
                        )158,533
                        
                        
                        
                        146,582LONG-TERM
      INVESTMENTS
                        
                        
                        81,776
                        
                        
                        
                        72,770OTHER
      ASSETS
                        
                        
                        4,985
                        
                        
                        
                        4,742$
                        508,594
                        
                        
                        $
                        488,903LIABILITIES
      AND STOCKHOLDERS’ EQUITYCURRENT
      LIABILITIES:Accounts
      payable
                        
                        $
                        33,307
                        
                        
                        $
                        24,364Accrued
      employee compensation
                        
                        
                        16,698
                        
                        
                        
                        41,463Accrued
      store operating expenses
                        
                        
                        8,392
                        
                        
                        
                        8,866Gift
      certificates redeemable
                        
                        
                        10,241
                        
                        
                        
                        13,507Income
      taxes payable
                        
                        
                        17,940
                        
                        
                        
                        3,830Total
      current liabilities
                        
                        
                        86,578
                        
                        
                        
                        92,030DEFERRED
      COMPENSATION
                        
                        
                        7,223
                        
                        
                        
                        5,957DEFERRED
      RENT LIABILITY
                        
                        
                        36,529
                        
                        
                        
                        36,657Total
      liabilities
                        
                        
                        130,330
                        
                        
                        
                        134,644COMMITMENTSSTOCKHOLDERS’
      EQUITY:Common
      stock, authorized 100,000,000 shares of $.01 par value; 46,726,491 and
      46,381,263shares
      issued and outstanding at May 1, 2010 and January 30, 2010,
      respectively
                        
                        
                        467
                        
                        
                        
                        464Additional
      paid-in capital
                        
                        
                        82,032
                        
                        
                        
                        78,837Retained
      earnings
                        
                        
                        296,524
                        
                        
                        
                        275,751Accumulated
      other comprehensive loss
                        
                        
                        (759
                        )
                        
                        
                        (793
                        )Total
      stockholders’ equity
                        
                        
                        378,264
                        
                        
                        
                        354,259$
                        508,594
                        
                        
                        $
                        488,903




See notes
to unaudited condensed financial statements.




3




THE
BUCKLE, INC.




STATEMENTS
OF INCOME


(Amounts
in Thousands Except Per Share Amounts)


(Unaudited)




Thirteen Weeks EndedMay 1,
                
                
                May 2,2010
                
                
                2009SALES,
      Net of returns and allowances
                
                $
                214,797
                
                
                $
                199,697COST
      OF SALES (Including buying, distribution, and occupancy
    costs)
                
                
                121,346
                
                
                
                112,994Gross
      profit
                
                
                93,451
                
                
                
                86,703OPERATING
      EXPENSES:Selling
                
                
                39,843
                
                
                
                37,597General
      and administrative
                
                
                7,421
                
                
                
                7,37847,264
                
                
                
                44,975INCOME
      FROM OPERATIONS
                
                
                46,187
                
                
                
                41,728OTHER
      INCOME, Net
                
                
                1,833
                
                
                
                910INCOME
      BEFORE INCOME TAXES
                
                
                48,020
                
                
                
                42,638PROVISION
      FOR INCOME TAXES
                
                
                17,910
                
                
                
                15,776NET
      INCOME
                
                $
                30,110
                
                
                $
                26,862EARNINGS
      PER SHARE:Basic
                
                $
                0.65
                
                
                $
                0.59Diluted
                
                $
                0.64
                
                
                $
                0.58Basic
      weighted average shares
                
                
                46,053
                
                
                
                45,529Diluted
      weighted average shares
                
                
                46,993
                
                
                
                46,521





See notes
to unaudited condensed financial statements.




4




THE
BUCKLE, INC.





STATEMENTS
OF STOCKHOLDERS' EQUITY


(Dollar
Amounts in Thousands Except Share and Per Share Amounts)


(Unaudited)





AccumulatedAdditional
                                          
                                          
                                          
                                          
                                          
                                          OtherNumber
                                          
                                          
                                          Common
                                          
                                          
                                          Paid-in
                                          
                                          
                                          Retained
                                          
                                          
                                          Comprehensiveof Shares
                                          
                                          
                                          Stock
                                          
                                          
                                          Capital
                                          
                                          
                                          Earnings
                                          
                                          
                                          Loss
                                          
                                          
                                          TotalFISCAL 2010BALANCE,
      January 31, 2010
                                          
                                          
                                          46,381,263
                                          
                                          
                                          $
                                          464
                                          
                                          
                                          $
                                          78,837
                                          
                                          
                                          $
                                          275,751
                                          
                                          
                                          $
                                          (793
                                          )
                                          
                                          $
                                          354,259Net
      income
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          30,110
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          30,110Dividends
      paid on common stock,($0.20
      per share)
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          (9,337
                                          )
                                          
                                          
                                          -
                                          
                                          
                                          
                                          (9,337
                                          )Common
      stock issued on exerciseof
      stock options
                                          
                                          
                                          101,463
                                          
                                          
                                          
                                          1
                                          
                                          
                                          
                                          470
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          471Issuance
      of non-vested stock, net of forfeitures
                                          
                                          
                                          243,765
                                          
                                          
                                          
                                          2
                                          
                                          
                                          
                                          (2
                                          )
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -Amortization
      of non-vested stock grants,net
      of forfeitures
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          1,500
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          1,500Stock
      option compensation expense
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          16
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          16Income
      tax benefit related to exercise ofstock
      options
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          1,211
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          1,211Unrealized
      loss on investments, net of tax
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          34
                                          
                                          
                                          
                                          34BALANCE,
      May 1, 2010
                                          
                                          
                                          46,726,491
                                          
                                          
                                          $
                                          467
                                          
                                          
                                          $
                                          82,032
                                          
                                          
                                          $
                                          296,524
                                          
                                          
                                          $
                                          (759
                                          )
                                          
                                          $
                                          378,264FISCAL 2009BALANCE,
      February 1, 2009
                                          
                                          
                                          45,906,265
                                          
                                          
                                          $
                                          459
                                          
                                          
                                          $
                                          68,894
                                          
                                          
                                          $
                                          268,789
                                          
                                          
                                          $
                                          (920
                                          )
                                          
                                          $
                                          337,222Net
      income
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          26,862
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          26,862Dividends
      paid on common stock,($0.20
      per share)
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          (9,222
                                          )
                                          
                                          
                                          -
                                          
                                          
                                          
                                          (9,222
                                          )Common
      stock issued on exerciseof
      stock options
                                          
                                          
                                          2,337
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          18
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          18Issuance
      of non-vested stock, net of forfeitures
                                          
                                          
                                          200,053
                                          
                                          
                                          
                                          2
                                          
                                          
                                          
                                          (2
                                          )
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -Amortization
      of non-vested stock grants,net
      of forfeitures
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          1,225
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          1,225Stock
      option compensation expense
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          40
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          40Unrealized
      loss on investments, net of tax
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          (18
                                          )
                                          
                                          
                                          (18
                                          )BALANCE,
      May 2, 2009
                                          
                                          
                                          46,108,655
                                          
                                          
                                          $
                                          461
                                          
                                          
                                          $
                                          70,175
                                          
                                          
                                          $
                                          286,429
                                          
                                          
                                          $
                                          (938
                                          )
                                          
                                          $
                                          356,127




See notes
to unaudited condensed financial statements.





5





THE
BUCKLE, INC.





STATEMENTS
OF CASH FLOWS


(Dollar
Amounts in Thousands)


(Unaudited)




Thirteen Weeks EndedMay 1,
                  
                  
                  May 2,2010
                  
                  
                  2009CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income
                  
                  $
                  30,110
                  
                  
                  $
                  26,862Adjustments
      to reconcile net income to net cash flowsfrom
      operating activities:Depreciation
      and amortization
                  
                  
                  6,490
                  
                  
                  
                  5,481Amortization
      of non-vested stock grants, net of forfeitures
                  
                  
                  1,500
                  
                  
                  
                  1,225Stock
      option compensation expense
                  
                  
                  16
                  
                  
                  
                  40Deferred
      income taxes
                  
                  
                  (562
                  )
                  
                  
                  (472
                  )Other
                  
                  
                  11
                  
                  
                  
                  23Changes
      in operating assets and liabilities:Accounts
      receivable
                  
                  
                  759
                  
                  
                  
                  (52
                  )Inventory
                  
                  
                  3,446
                  
                  
                  
                  1,171Prepaid
      expenses and other assets
                  
                  
                  (7,352
                  )
                  
                  
                  (505
                  )Accounts
      payable
                  
                  
                  11,177
                  
                  
                  
                  15,800Accrued
      employee compensation
                  
                  
                  (24,765
                  )
                  
                  
                  (23,784
                  )Accrued
      store operating expenses
                  
                  
                  (474
                  )
                  
                  
                  157Gift
      certificates redeemable
                  
                  
                  (3,266
                  )
                  
                  
                  (2,538
                  )Income
      taxes payable
                  
                  
                  15,384
                  
                  
                  
                  10,147Long-term
      liabilities and deferred compensation
                  
                  
                  1,138
                  
                  
                  
                  1,966Net
      cash flows from operating activities
                  
                  
                  33,612
                  
                  
                  
                  35,521CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase
      of property and equipment
                  
                  
                  (20,700
                  )
                  
                  
                  (14,865
                  )Proceeds
      from sale of property and equipment
                  
                  
                  14
                  
                  
                  
                  8Purchases
      of investments
                  
                  
                  (15,240
                  )
                  
                  
                  (9,660
                  )Proceeds
      from sales/maturities of investments
                  
                  
                  6,088
                  
                  
                  
                  6,628Net
      cash flows from investing activities
                  
                  
                  (29,838
                  )
                  
                  
                  (17,889
                  )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from the exercise of stock options
                  
                  
                  471
                  
                  
                  
                  18Excess
      tax benefit from stock option exercises
                  
                  
                  1,169
                  
                  
                  
                  16Payment
      of dividends
                  
                  
                  (9,337
                  )
                  
                  
                  (9,222
                  )Net
      cash flows from financing activities
                  
                  
                  (7,697
                  )
                  
                  
                  (9,188
                  )NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                  
                  
                  (3,923
                  )
                  
                  
                  8,444CASH
      AND CASH EQUIVALENTS, Beginning of period
                  
                  
                  135,340
                  
                  
                  
                  162,463CASH
      AND CASH EQUIVALENTS, End of period
                  
                  $
                  131,417
                  
                  
                  $
                  170,907





See notes
to unaudited condensed financial statements.





6




THE
BUCKLE, INC.


NOTES TO
FINANCIAL STATEMENTS


THIRTEEN
WEEKS ENDED MAY 1, 2010 AND MAY 2, 2009


(Dollar
Amounts in Thousands Except Share and Per Share Amounts)


(Unaudited)





1.
            Management
      Representation





The
accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States of America for complete financial statements. In the
opinion of management, all adjustments necessary for the fair presentation of
the results of operations for the interim periods have been included. All such
adjustments are of a normal recurring nature. Because of the seasonal nature of
the business, results for interim periods are not necessarily indicative of a
full year's operations. The accounting policies followed by the Company and
additional footnotes are reflected in the financial statements for the fiscal
year ended January 30, 2010, included in The Buckle, Inc.'s 2009 Form
10-K.





The
Company follows generally accepted accounting principles (“GAAP”) established by
the Financial Accounting Standards Board (“FASB”). References to GAAP in these
notes are to the FASB Accounting Standards Codification(“ASC”), which was established by FASB as the sole source of
authoritative GAAP for financial statements issued for reporting periods ending
on or after September 15, 2009.





2.
            Description of the
      Business





The
Company is a retailer of medium to better priced casual apparel, footwear, and
accessories for fashion conscious young men and women. The Company operates its
business as one reportable industry segment. The Company had 412 stores located
in 41 states throughout the continental United States as of May 1, 2010 and 392
stores in 40 states as of May 2, 2009. During the first quarter of fiscal 2010,
the Company opened eleven new stores and substantially remodeled three stores.
During the first quarter of fiscal 2009, the Company opened six new stores,
substantially remodeled six stores, and closed one store.





The
following is information regarding the Company’s major product lines, stated as
a percentage of the Company’s net sales:





Thirteen Weeks EndedMerchandise Group
                    
                    May 1, 2010
                    
                    
                    May 2, 2009Denims
                    
                    
                    45.4
                    %
                    
                    
                    41.7
                    %Tops
      (including sweaters)
                    
                    
                    32.9
                    
                    
                    
                    36.5Sportswear/Fashions
                    
                    
                    8.4
                    
                    
                    
                    8.4Accessories
                    
                    
                    6.5
                    
                    
                    
                    7.2Footwear
                    
                    
                    5.3
                    
                    
                    
                    4.8Outerwear
                    
                    
                    0.9
                    
                    
                    
                    0.8Casual
      bottoms
                    
                    
                    0.5
                    
                    
                    
                    0.5Other
                    
                    
                    0.1
                    
                    
                    
                    0.1100.0
                    %
                    
                    
                    100.0
                    %




7





3.
            Net Earnings Per
      Share





Basic
earnings per share data are based on the weighted average outstanding common
shares during the period. Diluted earnings per share data are based on the
weighted average outstanding common shares and the effect of all dilutive
potential common shares, including stock options.




Thirteen Weeks Ended
                        
                        
                        Thirteen Weeks EndedMay 1, 2010
                        
                        
                        May 2, 2009Weighted
                        
                        
                        Per
                        
                        
                        
                        
                        
                        Weighted
                        
                        
                        PerAverage
                        
                        
                        Share
                        
                        
                        
                        
                        
                        Average
                        
                        
                        ShareIncome
                        
                        
                        Shares
                        
                        
                        Amount
                        
                        
                        Income
                        
                        
                        Shares
                        
                        
                        AmountBasic
      EPS
                        
                        $
                        30,110
                        
                        
                        
                        46,053
                        
                        
                        $
                        0.65
                        
                        
                        $
                        26,862
                        
                        
                        
                        45,529
                        
                        
                        $
                        0.59Effect
      of Dilutive Securities:Stock
      options andnon-vested
      shares
                        
                        
                        -
                        
                        
                        
                        940
                        
                        
                        
                        (0.01
                        )
                        
                        
                        -
                        
                        
                        
                        992
                        
                        
                        
                        (0.01
                        )Diluted
      EPS
                        
                        $
                        30,110
                        
                        
                        
                        46,993
                        
                        
                        $
                        0.64
                        
                        
                        $
                        26,862
                        
                        
                        
                        46,521
                        
                        
                        $
                        0.58




4.
            Investments





The
following is a summary of investments as of May 1, 2010:




Amortized
                    
                    
                    Gross
                    
                    
                    Gross
                    
                    
                    Other-than-
                    
                    
                    EstimatedCost or
                    
                    
                    Unrealized
                    
                    
                    Unrealized
                    
                    
                    Temporary
                    
                    
                    FairPar Value
                    
                    
                    Gains
                    
                    
                    Losses
                    
                    
                    Impairment
                    
                    
                    ValueAvailable-for-Sale
      Securities:Auction-rate
      securities
                    
                    $
                    23,800
                    
                    
                    $
                    -
                    
                    
                    $
                    (1,205
                    )
                    
                    $
                    (725
                    )
                    
                    $
                    21,870Municipal
      bonds
                    
                    
                    8,483
                    
                    
                    
                    13
                    
                    
                    
                    (13
                    )
                    
                    
                    -
                    
                    
                    
                    8,483Preferred
      stock
                    
                    
                    2,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (1,974
                    )
                    
                    
                    26$
                    34,283
                    
                    
                    $
                    13
                    
                    
                    $
                    (1,218
                    )
                    
                    $
                    (2,699
                    )
                    
                    $
                    30,379Held-to-Maturity
      Securities:State
      and municipal bonds
                    
                    $
                    56,416
                    
                    
                    $
                    506
                    
                    
                    $
                    (25
                    )
                    
                    $
                    -
                    
                    
                    $
                    56,897Fixed
      maturities
                    
                    
                    8,870
                    
                    
                    
                    80
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    8,950Certificates
      of deposit
                    
                    
                    1,275
                    
                    
                    
                    20
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,295U.S.
      treasuries
                    
                    
                    500
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    500$
                    67,061
                    
                    
                    $
                    606
                    
                    
                    $
                    (25
                    )
                    
                    $
                    -
                    
                    
                    $
                    67,642Trading
      Securities:Mutual
      funds
                    
                    $
                    7,217
                    
                    
                    $
                    6
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    7,223




8





The
following is a summary of investments as of January 30, 2010:




Amortized
                    
                    
                    Gross
                    
                    
                    Gross
                    
                    
                    Other-than-
                    
                    
                    EstimatedCost or
                    
                    
                    Unrealized
                    
                    
                    Unrealized
                    
                    
                    Temporary
                    
                    
                    FairPar Value
                    
                    
                    Gains
                    
                    
                    Losses
                    
                    
                    Impairment
                    
                    
                    ValueAvailable-for-Sale
      Securities:Auction-rate
      securities
                    
                    $
                    24,775
                    
                    
                    $
                    -
                    
                    
                    $
                    (1,258
                    )
                    
                    $
                    (725
                    )
                    
                    $
                    22,792Municipal
      bonds
                    
                    
                    8,116
                    
                    
                    
                    14
                    
                    
                    
                    (14
                    )
                    
                    
                    -
                    
                    
                    
                    8,116Preferred
      stock
                    
                    
                    2,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (1,974
                    )
                    
                    
                    26$
                    34,891
                    
                    
                    $
                    14
                    
                    
                    $
                    (1,272
                    )
                    
                    $
                    (2,699
                    )
                    
                    $
                    30,934Held-to-Maturity
      Securities:State
      and municipal bonds
                    
                    $
                    47,036
                    
                    
                    $
                    535
                    
                    
                    $
                    (10
                    )
                    
                    $
                    -
                    
                    
                    $
                    47,561Fixed
      maturities
                    
                    
                    8,890
                    
                    
                    
                    92
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    8,982Certificates
      of deposit
                    
                    
                    1,640
                    
                    
                    
                    27
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,667U.S.
      treasuries
                    
                    
                    1,000
                    
                    
                    
                    1
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,001$
                    58,566
                    
                    
                    $
                    655
                    
                    
                    $
                    (10
                    )
                    
                    $
                    -
                    
                    
                    $
                    59,211Trading
      Securities:Mutual
      funds
                    
                    $
                    6,200
                    
                    
                    $
                    -
                    
                    
                    $
                    (243
                    )
                    
                    $
                    -
                    
                    
                    $
                    5,957





The
auction-rate securities and preferred stock were invested as follows as of May
1, 2010:




Nature
                        
                        Underlying Collateral
                        
                        Par ValueMunicipal
      revenue bonds
                        
                        92%
      insured by AAA/AA/A-rated bond insurers at May 1, 2010
                        
                        $
                        11,650Municipal
      bond funds
                        
                        Fixed
      income instruments within issuers' money market funds
                        
                        
                        8,400Student
      loan bonds
                        
                        Student
      loans guaranteed by state entities
                        
                        
                        3,750Preferred
      stock
                        
                        Underlying
      investments of closed-end funds
                        
                        
                        2,000Total
      par value
                        
                        
                        
                        $
                        25,800




As of May
1, 2010, the Company’s auction-rate securities portfolio was 55% AAA/Aaa-rated,
28% AA/Aa-rated, 10% A-rated, and 7% below A-rated.





The
amortized cost and fair value of debt securities by contractual maturity as of
May 1, 2010 is as follows:




Amortized
                    
                    
                    FairCost
                    
                    
                    ValueAvailable-for-sale
      securitiesLess
      than 1 year
                    
                    $
                    3,353
                    
                    
                    $
                    3,3531 -
      5 years
                    
                    
                    1,179
                    
                    
                    
                    1,1795 -
      10 years
                    
                    
                    1,457
                    
                    
                    
                    1,457Greater
      than 10 years
                    
                    
                    2,494
                    
                    
                    
                    2,494$
                    8,483
                    
                    
                    $
                    8,483Held-to-maturity
      securitiesLess
      than 1 year
                    
                    $
                    18,234
                    
                    
                    $
                    18,3221 -
      5 years
                    
                    
                    46,865
                    
                    
                    
                    47,2865 -
      10 years
                    
                    
                    1,116
                    
                    
                    
                    1,171Greater
      than 10 years
                    
                    
                    846
                    
                    
                    
                    863$
                    67,061
                    
                    
                    $
                    67,642




9




At May 1,
2010 and January 30, 2010, $25,726 and $26,634 of available-for-sale securities
and $48,827 and $40,179 of held-to-maturity securities are classified in
long-term investments. Trading securities are held in a Rabbi Trust, intended to
fund the Company’s deferred compensation plan, and are classified in long-term
investments.




The
Company’s investments in auction-rate securities (“ARS”) and preferred
securities are classified as available-for-sale and reported at fair market
value. As of May 1, 2010, the reported investment amount is net of $1,205 of
temporary impairment and $2,699 of other-than-temporary impairment (“OTTI”) to
account for the impairment of certain securities from their stated par value.
The $1,205 temporary impairment is reported, net of tax, as an “accumulated
other comprehensive loss” of $759 in stockholders’ equity as of May 1, 2010. For
the investments considered temporarily impaired, the Company believes that these
ARS can be successfully redeemed or liquidated through future auctions at par
value plus accrued interest. The Company believes it has the ability and
maintains its intent to hold these investments until such recovery of market
value occurs; therefore, the Company believes the current lack of liquidity has
created the temporary impairment in valuation.




As of May
1, 2010, the Company had $23,800 invested in ARS and $2,000 invested in
preferred securities, at par value, which are reported at their estimated fair
value of $21,870 and $26, respectively. As of January 30, 2010, the Company had
$24,775 invested in ARS and $2,000 invested in preferred securities, which were
reported at their estimated fair value of $22,792 and $26, respectively. ARS
have a long-term stated maturity, but are reset through a “dutch auction”
process that occurs every 7 to 49 days, depending on the terms of the individual
security. Until February 2008, the ARS market was highly liquid. During February
2008, however, a significant number of auctions related to these securities
failed, meaning that there was not enough demand to sell the entire issue at
auction. The failed auctions have limited the current liquidity of certain of
the Company’s investments in ARS and the Company has reason to believe that
certain of the underlying issuers of its ARS are currently at risk. The Company
does not, however, anticipate that further auction failures will have a material
impact on the Company’s ability to fund its business. During the first quarter
of fiscal 2010, the Company was able to successfully liquidate $975 of its
investments in ARS at par value. The Company reviews all investments for OTTI at
least quarterly or as indicators of impairment exist. Indicators of impairment
include the duration and severity of decline in market value. In addition, the
Company considers qualitative factors including, but not limited to, the
financial condition of the investee, the credit rating of the investee, and the
current and expected market and industry conditions in which the investee
operates.





As of May
1, 2010, $1,300 of the Company’s investment in ARS and preferred securities was
classified in short-term investments, due to known or anticipated subsequent
redemptions, and $20,596 was classified in long-term investments. As of January
30, 2010, $1,350 of the Company’s investment in ARS and preferred securities was
classified in short-term investments and $21,468 was classified in long-term
investments.





5.
            Fair Value
      Measurements





As
defined by FASB ASC 820, Fair
Value Measurements and Disclosures, fair value is the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. Financial
assets and liabilities measured and reported at fair value are classified and
disclosed in one of the following categories:





·
            Level
      1 – Quoted market prices in active markets for identical assets or
      liabilities. Short-term and long-term investments with active markets or
      known redemption values are reported at fair value utilizing Level 1
      inputs.


·
            Level
      2 – Observable market-based inputs (either directly or indirectly) such as
      quoted prices for similar assets or liabilities, quoted prices in markets
      that are not active, or other inputs that are observable or inputs that
      are corroborated by market data.


·
            Level
      3 – Unobservable inputs that are not corroborated by market data and are
      projections, estimates, or interpretations that are supported by little or
      no market activity and are significant to the fair value of the assets.
      The Company has concluded that certain of its ARS represent Level 3
      valuation and should be valued using a discounted cash flow analysis. The
      assumptions used in preparing the discounted cash flow model include
      estimates for interest rates, timing and amount of cash flows, and
      expected holding periods of the
ARS.





10


As of May
1, 2010 and January 30, 2010, the Company held certain assets that are required
to be measured at fair value on a recurring basis including available-for-sale
and trading securities. The Company’s available-for-sale securities include its
investments in ARS, as further described in Note 4. The failed auctions,
beginning in February 2008, related to certain of the Company’s investments in
ARS have limited the availability of quoted market prices. The Company has
determined the fair value of its ARS using Level 1 inputs for known or
anticipated subsequent redemptions at par value, Level 2 inputs using observable
inputs, and Level 3 using unobservable inputs where the following criteria were
considered in estimating fair value:





·
            Pricing
      was provided by the custodian of
ARS;


·
            Pricing
      was provided by a third-party broker for
ARS;


·
            Sales
      of similar securities;


·
            Quoted
      prices for similar securities in active
markets;


·
            Quoted
      prices for publicly traded preferred
securities;


·
            Quoted
      prices for similar assets in markets that are not active - including
      markets where there are few transactions for the asset, the prices are not
      current, or price quotations vary substantially either over time or among
      market makers, or in which little information is released
      publicly;


·
            Pricing
      was provided by a third-party valuation consultant (using Level 3
      inputs).





In
addition, the Company considers other factors including, but not limited to, the
financial condition of the investee, the credit rating, insurance, guarantees,
collateral, cash flows, and the current and expected market and industry
conditions in which the investee operates. Management believes it has used
information that was reasonably obtainable in order to complete its valuation
process and determine if the Company’s investments in ARS had incurred any
temporary and/or other-than-temporary impairment as of May 1, 2010 and January
30, 2010.





Future
fluctuations in fair value of ARS that the Company judges to be temporary,
including any recoveries of previous write-downs, would be recorded as an
adjustment to “accumulated other comprehensive loss.”  The value and
liquidity of ARS held by the Company may be affected by continued auction-rate
failures, the credit quality of each security, the amount and timing of interest
payments, the amount and timing of future principal payments, and the
probability of full repayment of the principal. Additional indicators of
impairment include the duration and severity of the decline in market value. The
interest rates on these investments will be determined by the terms of each
individual ARS. The material risks associated with the ARS held by the Company
include those stated above as well as the current economic environment,
downgrading of credit ratings on investments held, and the volatility of the
entities backing each of the issues.





The
Company’s financial assets measured at fair value on a recurring basis subject
to the disclosure requirements of FASB ASC 820 were as follows:




Fair Value Measurements at Reporting Date UsingQuoted Prices inActive Markets
                    
                    
                    Significant
                    
                    
                    Significantfor Identical
                    
                    
                    Observable
                    
                    
                    UnobservableAssets
                    
                    
                    Inputs
                    
                    
                    InputsMay 1, 2010
                    
                    (Level 1)
                    
                    
                    (Level 2)
                    
                    
                    (Level 3)
                    
                    
                    TotalAvailable-for-Sale
      SecuritiesAuction-rate
      securities
                    
                    $
                    1,267
                    
                    
                    $
                    11,994
                    
                    
                    $
                    8,609
                    
                    
                    $
                    21,870Municipal
      bonds
                    
                    
                    8,483
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    8,483Preferred
      stock
                    
                    
                    26
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    26Trading
      Securities (including mutual funds)
                    
                    
                    7,223
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    7,223Totals
                    
                    $
                    16,999
                    
                    
                    $
                    11,994
                    
                    
                    $
                    8,609
                    
                    
                    $
                    37,602




11




Fair Value Measurements at Reporting Date UsingQuoted Prices inActive Markets
                    
                    
                    Significant
                    
                    
                    Significantfor Identical
                    
                    
                    Observable
                    
                    
                    UnobservableAssets
                    
                    
                    Inputs
                    
                    
                    InputsJanuary 30, 2010
                    
                    (Level 1)
                    
                    
                    (Level 2)
                    
                    
                    (Level 3)
                    
                    
                    TotalAvailable-for-Sale
      SecuritiesAuction-rate
      securities
                    
                    $
                    1,261
                    
                    
                    $
                    12,894
                    
                    
                    $
                    8,637
                    
                    
                    $
                    22,792Municipal
      bonds
                    
                    
                    8,116
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    8,116Preferred
      stock
                    
                    
                    26
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    26Trading
      Securities (including mutual funds)
                    
                    
                    5,957
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    5,957Totals
                    
                    $
                    15,360
                    
                    
                    $
                    12,894
                    
                    
                    $
                    8,637
                    
                    
                    $
                    36,891




ARS,
municipal bonds, and preferred securities included in Level 1 represent
securities which have a known or anticipated upcoming redemption as of the
reporting date and those that have publicly traded quoted prices. ARS included
in Level 2 represent securities which have not experienced a successful auction
subsequent to the end of fiscal 2007. The fair market value for these securities
was determined by applying a discount to par value based on auction prices for
similar securities and by utilizing a discounted cash flow model, using
market-based inputs, to determine fair value. The Company used a discounted cash
flow model to value its Level 3 investments, using estimates regarding recovery
periods, yield, and liquidity. The assumptions used are subjective based upon
management’s judgment and views on current market conditions, and resulted in
$716 of the Company’s recorded temporary impairment and $725 of the OTTI as of
May 1, 2010. The use of different assumptions would result in a different
valuation and related temporary impairment charge.





Changes
in the fair value of the Company’s financial assets measured at fair value on a
recurring basis as defined in FASB ASC 820 are as follows:




Thirteen Weeks Ended May 1,
      2010Level 1
                    
                    
                    Level 2
                    
                    
                    Level 3Balance,
      beginning of year
                    
                    $
                    15,360
                    
                    
                    $
                    12,894
                    
                    
                    $
                    8,637Total
      gains or losses (realized and unrealized):Included
      in net income
                    
                    
                    251
                    
                    
                    
                    -
                    
                    
                    
                    -Included
      in other comprehensive income
                    
                    
                    6
                    
                    
                    
                    28
                    
                    
                    
                    -Purchases,
      sales, issuances, and settlements (net)
                    
                    
                    1,382
                    
                    
                    
                    (928
                    )
                    
                    
                    (28
                    )Transfers
      in and/or out
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Balance,
      end of quarter
                    
                    $
                    16,999
                    
                    
                    $
                    11,994
                    
                    
                    $
                    8,609




Thirteen Weeks Ended May 2,
      2009Level 1
                    
                    
                    Level 2
                    
                    
                    Level 3Balance,
      beginning of year
                    
                    $
                    6,240
                    
                    
                    $
                    21,468
                    
                    
                    $
                    7,260Total
      gains or losses (realized and unrealized):Included
      in net income
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Included
      in other comprehensive income
                    
                    
                    -
                    
                    
                    
                    (18
                    )
                    
                    
                    -Purchases,
      sales, issuances, and settlements (net)
                    
                    
                    1,351
                    
                    
                    
                    (1,829
                    )
                    
                    
                    -Transfers
      in and/or out
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Balance,
      end of quarter
                    
                    $
                    7,591
                    
                    
                    $
                    19,621
                    
                    
                    $
                    7,260




12





6.
            Comprehensive
      Income





Comprehensive
income consists of net income and unrealized gains and losses on
available-for-sale securities. Unrealized losses on the Company’s investments in
auction-rate securities have been included in accumulated other comprehensive
loss and are separately included as a component of stockholders’ equity, net of
related income taxes.




Thirteen Weeks EndedMay 1, 2010
                        
                        
                        May 2, 2009Net
      income
                        
                        $
                        30,110
                        
                        
                        $
                        26,862Changes
      in net unrealized losses on investmentsin
      auction-rate-securities, net of taxes of $(20) and $11
                        
                        
                        34
                        
                        
                        
                        (18
                        )Comprehensive
      income
                        
                        $
                        30,144
                        
                        
                        $
                        26,844




7.
            Supplemental Cash Flow
      Information





The
Company had non-cash investing activities during the thirteen week periods ended
May 1, 2010 and May 2, 2009 of $2,234 and $(937), respectively. The non-cash
investing activity relates to unpaid purchases of property, plant, and equipment
included in accounts payable as of the end of the quarter. Amounts reported as
unpaid purchases are recorded as cash outflows from investing activities for
purchases of property, plant, and equipment in the statement of cash flows in
the period they are paid.





Additional
cash flow information for the Company includes cash paid for income taxes during
the thirteen week periods ended May 1, 2010 and May 2, 2009 of $1,919 and
$6,085, respectively.





8.
            Stock-Based
      Compensation





The
Company has several stock option plans which allow for granting of stock options
to employees, executives, and directors. The options are in the form of
non-qualified stock options and are granted with an exercise price equal to the
market value of the Company’s common stock on the date of grant. The options
generally expire ten years from the date of grant. The Company also has a
restricted stock plan that allows for the granting of non-vested shares of
common stock to employees and executives and a restricted stock plan that allows
for the granting of non-vested shares of common stock to non-employee
directors.





As of May
1, 2010, 641,748 shares were available for grant under the various stock option
plans, of which 452,111 were available for grant to executive officers. Also as
of May 1, 2010, no shares were available for grant under the Company’s 2005
Restricted Stock Plan and 65,624 shares were available for grant under the
Company’s 2008 Director Restricted Stock Plan. On February 9, 2010, 230,400
shares of non-vested stock were granted under the 2005 Restricted Stock Plan
while only 129,248 shares were available for grant. Thus, the grants were made
subject to shareholder approval at the Company’s 2010 Annual Meeting of an
increase in the number of shares authorized for issuance under the plan from
1,200,000 shares to 1,700,000 shares.





The
Company accounts for stock-based compensation in accordance with FASB ASC 718,
Compensation-Stock
Compensation. Compensation expense was recognized during the first
quarter of fiscal 2010 and fiscal 2009 for new awards, based on the grant date
fair value, as well as for the portion of awards granted in fiscal years prior
to FASB ASC 718 adoption that was not vested as of the beginning of fiscal 2006.
The fair value of stock options is determined using the Black-Scholes option
pricing model, while the fair value of grants of non-vested common stock awards
is the stock price on the date of grant.




13





Information
regarding the impact of stock-based compensation expense is as
follows:




Thirteen Weeks EndedMay 1, 2010
                    
                    
                    May 2, 2009Stock-based
      compensation expense, before tax:Stock
      options
                    
                    $
                    16
                    
                    
                    $
                    40Non-vested
      shares of common stock
                    
                    
                    1,500
                    
                    
                    
                    1,225Total
      stock-based compensation expense, before tax
                    
                    $
                    1,516
                    
                    
                    $
                    1,265Total
      stock-based compensation expense, after tax
                    
                    $
                    955
                    
                    
                    $
                    797




FASB ASC
718 requires the benefits of tax deductions in excess of the compensation cost
recognized for stock options exercised during the period to be classified as
financing cash inflows. This amount is shown as “excess tax benefit from stock
option exercises” on the statements of cash flows. For the fiscal quarters ended
May 1, 2010 and May 2, 2009, the excess tax benefit realized from exercised
stock options was $1,169 and $16, respectively.





No stock options were
granted during fiscal 2010 or fiscal 2009.On September 21, 2009, the
Board of Directors authorized a $1.80 per share special one-time cash dividend
to be paid on October 27, 2009 to shareholders of record at the close of
business on October 15, 2009. To preserve the intrinsic value for option
holders, the Board also approved, pursuant to the terms of the Company’s various
stock option plans, a proportional adjustment to both the exercise price and the
number of shares covered by each award for all outstanding stock options. This
adjustment did not result in any incremental compensation expense.





A summary
of the Company’s stock-based compensation activity related to stock options for
the fiscal quarter ended May 1, 2010 is as follows:





WeightedWeighted
                    
                    AverageAverage
                    
                    Remaining
                    
                    AggregateExercise
                    
                    Contractual
                    
                    IntrinsicShares
                    
                    
                    Price
                    
                    Life
                    
                    ValueOutstanding
      - beginning of year
                    
                    
                    1,352,111
                    
                    
                    $
                    5.02Granted
                    
                    
                    -
                    
                    
                    
                    -Expired/forfeited
                    
                    
                    -
                    
                    
                    
                    -Exercised
                    
                    
                    (101,463
                    )
                    
                    
                    4.65Outstanding
      - end of quarter
                    
                    
                    1,250,648
                    
                    
                    $
                    5.05
                    
                    3.10
                    years
                    $          38,934Exercisable
      - end of quarter
                    
                    
                    1,243,877
                    
                    
                    $
                    4.94
                    
                    3.07
                    years
                    $          38,853




The total
intrinsic value of options exercised during the fiscal quarters ended
May 1, 2010 and May 2, 2009 was $3,332 and $52, respectively. As of May
1, 2010, there was $48 of unrecognized compensation expense related to
non-vested stock options. It is expected that this expense will be recognized
over a weighted average period of approximately 0.75 years.




14




Non-vested
shares of common stock granted during the first quarter of fiscal 2010 and
fiscal 2009 were granted pursuant to the Company’s 2005 Restricted Stock Plan
and the Company’s 2008 Director Restricted Stock Plan. Shares granted under the
2005 Plan typically vest over a period of four years, only upon certification by
the Compensation Committee of the Board of Directors that the Company has
achieved its pre-established performance targets for the fiscal year. Shares
granted under the 2008 Director Plan vest 25% on the date of grant and then in
equal portions on each of the first three anniversaries of the date of
grant.





A summary
of the Company’s stock-based compensation activity related to grants of
non-vested shares of common stock for the fiscal quarter ended May 1, 2010 is as
follows:




Weighted AverageGrant DateShares
                    
                    
                    Fair ValueNon-Vested
      - beginning of year
                    
                    
                    405,345
                    
                    
                    $
                    23.29Granted
                    
                    
                    243,900
                    
                    
                    
                    28.53Forfeited
                    
                    
                    (135
                    )
                    
                    
                    26.20Vested
                    
                    
                    (51,516
                    )
                    
                    
                    21.75Non-Vested
      - end of quarter
                    
                    
                    597,594
                    
                    
                    $
                    25.56





As of May
1, 2010, there was $9,105 of unrecognized compensation expense related to grants
of non-vested shares. It is expected that this expense will be recognized over a
weighted average period of approximately 2.2 years. The total fair value of
shares vested during the fiscal quarters ended May 1, 2010 and May 2, 2009 was
$1,871 and $1,386, respectively.





9.
            Recently Issued
      Accounting Pronouncements





In
January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and
Disclosures (Topic 820): Improving Disclosures about Fair Value
Measurements. ASU 2010-06 revises two disclosure requirements concerning
fair value measurements and clarifies two others. It requires separate
presentation of significant transfers into and out of Levels 1 and 2 of the fair
value hierarchy and disclosure of the reasons for such transfers. It will also
require the presentation of purchases, sales, issuances, and settlements within
Level 3 on a gross basis rather than a net basis. The amendments also clarify
that disclosures should be disaggregated by class of asset or liability and that
disclosures about inputs and valuation techniques should be provided for both
recurring and non-recurring fair value measurements. The new disclosures about
fair value measurements are presented in Note 5 to these financial statements,
except for the requirement concerning gross presentation of Level 3 activity,
which is effective for fiscal years beginning after December 15, 2010. The
adoption of this statement had no effect on the Company’s financial position or
results of operations.


15


THE
BUCKLE, INC.


MANAGEMENT'S
DISCUSSION AND ANALYSIS OF


FINANCIAL
CONDITION AND RESULTS OF OPERATIONS





The
following discussion should be read in conjunction with the Financial Statements
and notes thereto of the Company included in this Form 10-Q. The following is
management’s discussion and analysis of certain significant factors which have
affected the Company’s financial condition and results of operations during the
periods included in the accompanying financial statements.





EXECUTIVE
OVERVIEW





Company
management considers the following items to be key performance indicators in
evaluating Company performance.





Comparable Store Sales –
Stores are deemed to be comparable stores if they were open in the prior year on
the first day of the fiscal period being presented. Stores which have been
remodeled, expanded, and/or relocated, but would otherwise be included as
comparable stores, are not excluded from the comparable store sales calculation.
Online sales are excluded from comparable store sales. Management considers
comparable store sales to be an important indicator of current Company
performance, helping leverage certain fixed costs when results are positive.
Negative comparable store sales results could reduce net sales and have a
negative impact on operating leverage, thus reducing net earnings.





Merchandise Margins –
Management evaluates the components of merchandise margin including initial
markup and the amount of markdowns during a period. Any inability to obtain
acceptable levels of initial markups or any significant increase in the
Company’s use of markdowns could have an adverse effect on the Company’s gross
margin and results of operations.





Operating Margin – Operating
margin is a good indicator for management of the Company’s success. Operating
margin can be positively or negatively affected by comparable store sales,
merchandise margins, occupancy costs, and the Company’s ability to control
operating costs.





Cash Flow and Liquidity (working
capital) – Management reviews current cash and short-term investments
along with cash flow from operating, investing, and financing activities to
determine the Company’s short-term cash needs for operations and expansion. The
Company believes that existing cash, short-term investments, and cash flow from
operations will be sufficient to fund current and long-term anticipated capital
expenditures and working capital requirements for the next several
years.


16





RESULTS OF
OPERATIONS





The table
below sets forth the percentage relationships of sales and various expense
categories in the Statements of Income for the thirteen-week periods ended May
1, 2010 and May 2, 2009:





Percentage of Net SalesThirteen Weeks Ended
                          
                          
                          PercentageMay 1, 2010
                          
                          
                          May 2, 2009
                          
                          
                          Increase/(Decrease)Net
      sales
                          
                          
                          100.0
                          %
                          
                          
                          100.0
                          %
                          
                          
                          7.6
                          %Cost
      of sales (including buying,distribution,
      and occupancy costs)
                          
                          
                          56.5
                          %
                          
                          
                          56.6
                          %
                          
                          
                          7.4
                          %Gross
      profit
                          
                          
                          43.5
                          %
                          
                          
                          43.4
                          %
                          
                          
                          7.8
                          %Selling
      expenses
                          
                          
                          18.5
                          %
                          
                          
                          18.8
                          %
                          
                          
                          6.0
                          %General
      and administrative expenses
                          
                          
                          3.5
                          %
                          
                          
                          3.7
                          %
                          
                          
                          0.6
                          %Income
      from operations
                          
                          
                          21.5
                          %
                          
                          
                          20.9
                          %
                          
                          
                          10.7
                          %Other
      income, net
                          
                          
                          0.8
                          %
                          
                          
                          0.5
                          %
                          
                          
                          101.5
                          %Income
      before income taxes
                          
                          
                          22.3
                          %
                          
                          
                          21.4
                          %
                          
                          
                          12.6
                          %Provision
      for income taxes
                          
                          
                          8.3
                          %
                          
                          
                          7.9
                          %
                          
                          
                          13.5
                          %Net
      income
                          
                          
                          14.0
                          %
                          
                          
                          13.5
                          %
                          
                          
                          12.1
                          %





Net sales
increased from $199.7 million in the first quarter of fiscal 2009 to $214.8
million in the first quarter of fiscal 2010, a 7.6% increase. Comparable store
sales increased by $5.3 million, or 2.8%, for the thirteen week period ended May
1, 2010 compared to the same period in the prior year. The comparable store
sales increase was primarily due to a 4.2% increase in the average retail price
of merchandise sold during the quarter and a 4.3% increase in the average number
of units sold per transaction, which were partially offset by a 5.3% decrease in
the number of transactions at comparable stores during the quarter. Sales growth
for the thirteen week period was also attributable to the inclusion of a full
quarter of operating results for the 20 new stores opened during fiscal 2009, to
the opening of 11 new stores during the first quarter of fiscal 2010, and to
growth in online sales. Online sales for the quarter (which are not included in
comparable store sales) increased 24.0% to $14.4 million. Average sales per
square foot increased 1.1% from $96.58 for the first quarter of fiscal 2009 to
$97.69 for the first quarter of fiscal 2010. Total square footage as of May 1,
2010 was 2.057 million.





The
Company’s average retail price per piece of merchandise sold increased $1.79, or
4.2%, during the first quarter of fiscal 2010 compared to the first quarter of
fiscal 2009. This $1.79 increase was primarily attributable to the following
changes (with their corresponding effect on the overall average price per
piece): a 7.1% increase in average denim price points ($1.33), an 8.5% increase
in average accessory price points ($0.23), a 9.4% increase in average footwear
price points ($0.20), a 2.8% increase in average active apparel price points
($0.09), and a shift in the merchandise mix ($0.50). These increases were
partially offset by a 4.2% reduction in average knit shirt price points (-$0.50)
and reduced price points in certain other categories (-$0.06). These changes are
primarily a reflection of merchandise shifts in terms of brands and product
styles, fabrics, details, and finishes.





Gross profit after buying,
distribution, and occupancy expenses increased from $86.7 million for the first
quarter of fiscal 2009 to $93.5 million for the first quarter of fiscal 2010,
7.8% increase. As a percentage of net sales, gross profit increased from 43.4%
in the first quarter of fiscal 2009 to 43.5% in the first quarter of fiscal
2010.The increase was attributable to a 0.55% improvement, as a
percentage of net sales, in actual merchandise margins and a 0.15% reduction in
expense related to the incentive bonus accrual; which were partially offset by
an increase in buying, distribution, and occupancy costs (0.60%, as a percentage
of net sales). The improvement in merchandise margins for the quarter was
achieved through reduced markdowns, as a result of strong sell-through of new
product, and a slight increase in the percentage of net sales from private label
merchandise; which were partially offset by an increase in Primo Card
redemptions.


17





Selling
expenses increased from $37.6 million for the first quarter of fiscal 2009 to
$39.8 million for the first quarter of fiscal 2010, a 6.0% increase. As a
percentage of net sales, selling expenses decreased from 18.8% in the first
quarter of fiscal 2009 to 18.5% in the first quarter of fiscal 2010. The
reduction was primarily attributable to a 1.00% reduction, as a percentage of
net sales, in expense related to the incentive bonus accrual and a 0.30%
reduction in store payroll expense. These reductions were partially offset by
increases in expense related to store supplies (0.50%, as a percentage of net
sales), internet-related fulfillment and marketing expenses (0.30%, as a
percentage of net sales), and health insurance claims (0.20%, as a percentage of
net sales).





General
and administrative expenses increased 0.6%, but were
$7.4 million for both the first quarter of fiscal 2009 and first quarter of
fiscal 2010.As a percentage of net sales, general and administrative
expenses decreased from 3.7% in the first quarter of fiscal 2009 to 3.5% in the
first quarter of fiscal 2010. The reduction was primarily attributable to a
0.20% reduction, as a percentage of net sales, in expense related to the
incentive bonus accrual.





As a
result of the above changes, the Company's income from operations increased
10.7% to $46.2 million for the first quarter of fiscal 2010 compared to $41.7
million for the first quarter of fiscal 2009. Income from operations was 21.5%
of net sales for the first quarter of fiscal 2010 compared to 20.9% for the
first quarter of fiscal 2009.





Other
income increased from $0.9 million for the first quarter of fiscal 2009 to $1.8
million for the first quarter of fiscal 2010. The increase in other income was
the result of a $1.1 million sales tax refund received through state economic
incentive programs, partially offset by a reduction in income earned on the
Company’s cash and investments as a result of lower interest rates.





Income
tax expense as a percentage of pre-tax income was 37.3% in the first quarter of
fiscal 2010 and 37.0% in the first quarter of fiscal 2009, bringing net income
to $30.1 million in the first quarter of fiscal 2010 compared to $26.9 million
in the first quarter of fiscal 2009, an increase of 12.1%.





LIQUIDITY AND CAPITAL
RESOURCES





As of May
1, 2010, the Company had working capital of $176.7 million, including $131.4
million of cash and cash equivalents and short-term investments of $22.9
million. The Company’s cash receipts are generated from retail sales and from
investment income, and the Company's primary ongoing cash requirements are for
inventory, payroll, occupancy costs, dividend payments, new store expansion,
remodeling, and other capital expenditures. Historically, the Company's primary
source of working capital has been cash flow from operations. During the first
quarter of fiscal 2010 and 2009, the Company’s cash flow from operating
activities was $33.6 million and $35.5 million, respectively.





The uses
of cash for both thirteen week periods include payment of annual bonuses accrued
at fiscal year end, changes in inventory and accounts payable for build-up of
inventory levels, dividend payments, construction costs for new and remodeled
stores, and other capital expenditures.





During
the first quarter of fiscal 2010 and 2009, the Company invested $9.6 million and
$11.7 million, respectively, in new store construction, store renovation, and
store technology upgrades. The Company also spent $11.1 million and $3.2 million
in the first quarter of fiscal 2010 and 2009, respectively, in capital
expenditures for the corporate headquarters and distribution facility. The
capital spending for the corporate headquarters and distribution facility during
fiscal 2009 included a portion of the total $5.5 million in capital spending
related to the expansion of the Company’s online fulfillment infrastructure
within its current warehouse and distribution center in Kearney, Nebraska. The
newly expanded online fulfillment center went live in June 2009 and the
expansion approximately doubled the size of the previous infrastructure. Capital
spending for the corporate headquarters and distribution facility during fiscal
2010 includes payments made as work progressed on the Company’s new distribution
center currently under construction in Kearney, Nebraska.


18





During
the remainder of fiscal 2010, the Company anticipates completing approximately
32 additional store construction projects, including approximately 10 new stores
and approximately 22 stores to be substantially remodeled and/or relocated.
Management estimates that total capital expenditures during fiscal 2010 will be
approximately $65 to $70 million. The Company believes that existing cash and
cash equivalents, investments, and cash flow from operations will be sufficient
to fund current and long-term anticipated capital expenditures and working
capital requirements for the next several years. The Company has a consistent
record of generating positive cash flow each year and, as of May 1, 2010, had
total cash and investments of $236.1 million. The Company does not currently
have plans for a merger or acquisition and has fairly consistent plans for new
store expansion and remodels. Based upon past results and current plans,
management does not anticipate any large swings in the Company’s need for cash
in the upcoming years.





Future
conditions, however, may reduce the availability of funds based upon factors
such as a decrease in demand for the Company’s product, change in product mix,
competitive factors, and general economic conditions as well as other risks and
uncertainties which would reduce the Company’s sales, net profitability, and
cash flows. Also, the Company’s acceleration in store openings and/or remodels
or the Company entering into a merger, acquisition, or other financial related
transaction could reduce the amount of cash available for further capital
expenditures and working capital requirements.





The
Company has available an unsecured line of credit of $17.5 million with Wells
Fargo Bank, N.A. for operating needs and letters of credit. The line of credit
provides that outstanding letters of credit cannot exceed $10.0 million.
Borrowings under the line of credit provide for interest to be paid at a rate
equal to the prime rate established by the Bank. The Company has, from time to
time, borrowed against these lines during periods of peak inventory build-up.
There were no bank borrowings during the first quarter of fiscal 2010 or
2009.





Auction-Rate Securities - As
of May 1, 2010, total cash and investments included $21.9 million of
auction-rate securities (“ARS”) and preferred securities, which compares to
$22.8 million of ARS and preferred securities as of January 30, 2010. Of the
$21.9 million in ARS and preferred securities as of May 1, 2010, $1.3 million
has been included in short-term investments, due to known or anticipated
subsequent redemptions at par value plus accrued interest, and $20.6 million has
been included in long-term investments. ARS have a long-term stated maturity,
but are reset through a “dutch auction” process that occurs every 7 to 49 days,
depending on the terms of the individual security. During February 2008, a
significant number of auctions related to these securities failed, meaning that
there was not enough demand to sell the entire issue at auction. The failed
auctions have limited the current liquidity of the Company’s investments in ARS
and the Company has reason to believe that certain of the underlying issuers of
its ARS are currently at risk. The Company does not anticipate, however, that
further auction failures will have a material impact on the Company’s ability to
fund its business.





ARS and
preferred securities are reported at fair market value, and as of May 1, 2010,
the reported investment amount is net of a $1.2 million temporary impairment and
a $2.7 million other-than-temporary impairment (“OTTI”) to account for the
impairment of certain securities from their stated par value. The Company
reported the $1.2 million temporary impairment, net of tax, as an “accumulated
other comprehensive loss” of $0.8 million in stockholders’ equity as of May 1,
2010. The Company has accounted for the impairment as temporary, as it currently
expects to be able to successfully liquidate its investments without loss once
the ARS market resumes normal operations.





The
Company reviews all investments for OTTI at least quarterly or as indicators of
impairment exist. The value and liquidity of ARS held by the Company may be
affected by continued auction-rate failures, the credit quality of each
security, the amount and timing of interest payments, the amount and timing of
future principal payments, and the probability of full repayment of the
principal. Additional indicators of impairment include the duration and severity
of the decline in market value. The interest rates on these investments will be
determined by the terms of each individual ARS. The material risks associated
with the ARS held by the Company include those stated above as well as the
current economic environment, downgrading of credit ratings on investments held,
and the volatility of the entities backing each of the issues. In addition, the
Company considers qualitative factors including, but not limited to, the
financial condition of the investee, the credit rating of the investee, and the
current and expected market and industry conditions in which the investee
operates. The Company believes it has the ability and intent to hold these
investments until recovery of market value occurs.


19





CRITICAL ACCOUNTING POLICIES
AND ESTIMATES





Management’s
Discussion and Analysis of Financial Condition and Results of Operations are
based upon The Buckle, Inc.’s financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America. The preparation of these financial statements requires that management
make estimates and judgments that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the
financial statement date, and the reported amounts of sales and expenses during
the reporting period. The Company regularly evaluates its estimates, including
those related to inventory, investments, incentive bonuses, and income taxes.
Management bases its estimates on past experience and on various other factors
that are thought to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions.
Management believes that the estimates and judgments used in preparing these
financial statements were the most appropriate at that time. Presented below are
those critical accounting policies that management believes require subjective
and/or complex judgments that could potentially affect reported results of
operations.





1.
            Revenue
      Recognition.
      Retail store sales are recorded upon the purchase of merchandise by
      customers. Online sales are recorded when merchandise is delivered to the
      customer, with the time of delivery being based on estimated shipping time
      from the Company’s distribution center to the customer. Shipping fees
      charged to customers are included in revenue and shipping costs are
      included in selling expenses. The Company accounts for layaway sales in
      accordance with FASB ASC 605, Revenue Recognition,
      recognizing revenue from sales made under its layaway program upon
      delivery of the merchandise to the customer. Revenue is not recorded when
      gift cards and gift certificates are sold, but rather when a card or
      certificate is redeemed for merchandise. A current liability for
      unredeemed gift cards and certificates is recorded at the time the card or
      certificate is purchased. The amounts of the gift certificate and gift
      card liabilities are determined using the outstanding balances from the
      prior three and four years of issuance, respectively. The liability
      recorded for unredeemed gift certificates and gift cards was $10.2 million
      and $13.5 million as of May 1, 2010 and January 30, 2010, respectively.
      The Company records breakage as other income when the probability of
      redemption, which is based on historical redemption patterns, is
      remote.





The
Company establishes a liability for estimated merchandise returns based upon the
historical average sales return percentage. Customer returns could potentially
exceed the historical average, thus reducing future net sales results and
potentially reducing future net earnings. The accrued liability for reserve for
sales returns was $0.7 million and $0.6 million at May 1, 2010 and January 30,
2010, respectively.





2.
            Inventory.
      Inventory is valued at the lower of cost or market. Cost is determined
      using an average cost method that approximates the first-in, first-out
      (FIFO) method. Management makes adjustments to inventory and cost of goods
      sold, based upon estimates, to reserve for merchandise obsolescence and
      markdowns that could affect market value, based on assumptions using
      calculations applied to current inventory levels within each of four
      different markdown levels. Management also reviews the levels of inventory
      in each markdown group and the overall aging of the inventory versus the
      estimated future demand for such product and the current market
      conditions. Such judgments could vary significantly from actual results,
      either favorably or unfavorably, due to fluctuations in future economic
      conditions, industry trends, consumer demand, and the competitive retail
      environment. Such changes in market conditions could negatively impact the
      sale of markdown inventory, causing further markdowns or inventory
      obsolescence, resulting in increased cost of goods sold from write-offs
      and reducing the Company’s net earnings. The liability recorded as a
      reserve for markdowns and/or obsolescence was $6.0 million and $5.8
      million as of May 1, 2010 and January 30, 2010, respectively. The Company
      is not aware of any events, conditions, or changes in demand or price that
      would indicate that its inventory valuation may not be materially accurate
      at this time.





3.
            Income Taxes.
      The Company records a deferred tax asset and liability for expected future
      tax consequences resulting from temporary differences between financial
      reporting and tax bases of assets and liabilities. The Company considers
      future taxable income and ongoing tax planning in assessing the value of
      its deferred tax assets. If the Company determines that it is more than
      likely that these assets will not be realized, the Company would reduce
      the value of these assets to their expected realizable value, thereby
      decreasing net income. Estimating the value of these assets is based upon
      the Company’s judgment. If the Company subsequently determined that the
      deferred tax assets, which had been written down, would be realized in the
      future, such value would be increased. Adjustment would be made to
      increase net income in the period such determination was
    made.




20




4.
            Operating
      Leases. The Company leases retail stores under operating leases.
      Most lease agreements contain tenant improvement allowances, rent
      holidays, rent escalation clauses, and/or contingent rent provisions. For
      purposes of recognizing lease incentives and minimum rental expenses on a
      straight-line basis over the terms of the leases, the Company uses the
      date of initial possession to begin amortization, which is generally when
      the Company enters the space and begins to make improvements in
      preparation of intended use. For tenant improvement allowances and rent
      holidays, the Company records a deferred rent liability on the balance
      sheets and amortizes the deferred rent over the terms of the leases as
      reductions to rent expense on the statements of
  income.





For
scheduled rent escalation clauses during the lease terms or for rental payments
commencing at a date other than the date of initial occupancy, the Company
records minimum rental expenses on a straight-line basis over the terms of the
leases on the statements of income. Certain leases provide for contingent rents,
which are determined as a percentage of gross sales in excess of specified
levels. The Company records a contingent rent liability on the balance sheets
and the corresponding rent expense when specified levels have been achieved or
are reasonably probable to be achieved.




5.
            Investments.
      The Company accounts for investments in accordance with FASB ASC 320,
      Investments-Debt and
      Equity Securities. Investments classified as short-term investments
      include securities with a maturity of greater than three months and less
      than one year, and a portion of the Company’s investments in auction-rate
      securities (“ARS”), which are available-for-sale securities.
      Available-for-sale securities are reported at fair value, with unrealized
      gains and losses excluded from earnings and reported as a separate
      component of stockholders’ equity (net of the effect of income taxes),
      using the specific identification method, until they are
    sold.





The
Company reviews impairment in accordance with FASB ASC 320 to determine the
classification of potential impairments as either temporary or
other-than-temporary. A temporary impairment results in an unrealized loss being
recorded in other comprehensive income. An impairment that is considered
other-than-temporary would be recognized in net income. The Company considers
various factors in reviewing impairment, including the duration and severity of
the decline in market value. In addition, the Company considers qualitative
factors including, but not limited to, the financial condition of the investee,
the credit rating of the investee, the current and expected market and industry
conditions in which the investee operates, and the Company’s intent and ability
to hold the investments for a period of time sufficient to allow for any
anticipated recovery in market value. The Company believes it has the ability
and maintains its intent to hold these investments until recovery of market
value occurs.





The
Company determined the fair value of ARS using Level 1 inputs for known or
anticipated subsequent redemptions at par value, Level 2 inputs using observable
inputs, and Level 3 using unobservable inputs, where the following criteria were
considered in estimating fair value:





·
            Pricing
      was provided by the custodian of
ARS;


·
            Pricing
      was provided by a third-party broker for
ARS;


·
            Sales
      of similar securities;


·
            Quoted
      prices for similar securities in active
markets;


·
            Quoted
      prices for publicly traded preferred
securities;


·
            Quoted
      prices for similar assets in markets that are not active - including
      markets where there are few transactions for the asset, the prices are not
      current, or price quotations vary substantially either over time or among
      market makers, or in which little information is released
      publicly;


·
            Pricing
      was provided by a third-party valuation consultant (using Level 3
      inputs).





In
addition, the Company considers other factors including, but not limited to, the
financial condition of the investee, the credit rating, insurance, guarantees,
collateral, cash flows, and the current and expected market and industry
conditions in which the investee operates. Management believes it has used
information that was reasonably obtainable in order to complete its valuation
process and determine if the Company’s investments in ARS had incurred any
temporary and/or other-than-temporary impairment as of May 1,
2010.


21




OFF-BALANCE SHEET
ARRANGEMENTS, CONTRACTUAL OBLIGATIONS,


AND COMMERCIAL
COMMITMENTS





As
referenced in the tables below, the Company has contractual obligations and
commercial commitments that may affect the financial condition of the Company.
Based on management’s review of the terms and conditions of its contractual
obligations and commercial commitments, there is no known trend, demand,
commitment, event, or uncertainty that is reasonably likely to occur which would
have a material effect on the Company’s financial condition, results of
operations, or cash flows.





In addition, the
commercial obligations and commitments made by the Company are customary
transactions which are similar to those of other comparable retail companies.The operating lease obligations shown in the table below represent future
cash payments to landlords required to fulfill the Company’s minimum rent
requirements. Such amounts are actual cash requirements by year and are not
reported net of any tenant improvement allowances received from
landlords.





The
following tables identify the material obligations and commitments as of May 1,
2010:


Payments Due by PeriodContractual obligations (dollar amounts in
                    thousands):
                  
                  Total
                  
                  
                  Less than 1
                    year
                  
                  
                  1-3 years
                  
                  
                  4-5 years
                  
                  
                  After5
                    yearsLong
      term debt and purchase obligations
                  
                  $
                  10,642
                  
                  
                  $
                  10,382
                  
                  
                  $
                  260
                  
                  
                  $
                  -
                  
                  
                  $
                  -Deferred
      compensation
                  
                  
                  7,223
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  7,223Operating
      leases
                  
                  
                  316,834
                  
                  
                  
                  49,368
                  
                  
                  
                  85,467
                  
                  
                  
                  69,626
                  
                  
                  
                  112,373Total
      contractual obligations
                  
                  $
                  334,699
                  
                  
                  $
                  59,750
                  
                  
                  $
                  85,727
                  
                  
                  $
                  69,626
                  
                  
                  $
                  119,596
 
 Amount of Commitment Expiration Per PeriodOther commercial commitments (dollar
                      amounts in thousands):
                    
                    Total
                      Amounts
                      Committed
                    
                    
                    Less than 1
                      year
                    
                    
                    1-3 years
                    
                    
                    4-5 years
                    
                    
                    After5
                      yearsLines
      of credit
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -Total
      commercial commitments
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -




The
Company has available an unsecured line of credit of $17.5 million, of which
$10.0 million is available for letters of credit, which is excluded from the
preceding table. Certain merchandise purchase orders require that the Company
open letters of credit. When the Company takes possession of the merchandise, it
releases payment on the letters of credit. The amounts of outstanding letters of
credit reported reflect the open letters of credit on merchandise ordered, but
not yet received or funded. The Company believes it has sufficient credit
available to open letters of credit for merchandise purchases. There were no
bank borrowings during the first quarter of fiscal 2010 or the first quarter of
fiscal 2009. The Company had outstanding letters of credit totaling $0.8 million
and $0.6 million at May 1, 2010 and January 30, 2010, respectively. The Company
has no other off-balance sheet arrangements.


22





SEASONALITY AND
INFLATION





The
Company's business is seasonal, with the holiday season (from approximately
November 15 to December 30) and the back-to-school season (from approximately
July 15 to September 1) historically contributing the greatest volume of net
sales. For fiscal years 2009, 2008, and 2007, the holiday and back-to-school
seasons accounted for approximately 35%, 37%, and 38%, respectively, of the
Company's fiscal year net sales. Although the operations of the Company are
influenced by general economic conditions, the Company does not believe that
inflation has had a material effect on the results of operations during the
thirteen-week periods ended May 1, 2010 and May 2, 2009. Quarterly results may
vary significantly depending on a variety of factors including the timing and
amount of sales and costs associated with the opening of new stores, the timing
and level of markdowns, the timing of store closings, the remodeling of existing
stores, competitive factors, and general economic conditions.





RECENTLY ISSUED ACCOUNTING
PRONOUNCEMENTS





In
January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and
Disclosures (Topic 820): Improving Disclosures about Fair Value
Measurements. ASU 2010-06 revises two disclosure requirements concerning
fair value measurements and clarifies two others. It requires separate
presentation of significant transfers into and out of Levels 1 and 2 of the fair
value hierarchy and disclosure of the reasons for such transfers. It will also
require the presentation of purchases, sales, issuances, and settlements within
Level 3 on a gross basis rather than a net basis. The amendments also clarify
that disclosures should be disaggregated by class of asset or liability and that
disclosures about inputs and valuation techniques should be provided for both
recurring and non-recurring fair value measurements. The new disclosures about
fair value measurements are presented in Note 5 to these financial statements,
except for the requirement concerning gross presentation of Level 3 activity,
which is effective for fiscal years beginning after December 15, 2010. The
adoption of this statement had no effect on the Company’s financial position or
results of operations.





FORWARD LOOKING
STATEMENTS





Information
in this report, other than historical information, may be considered to be
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 (the “1995 Act”). Such statements are made in good
faith by the Company pursuant to the safe-harbor provisions of the 1995 Act. In
connection with these safe-harbor provisions, this management’s discussion and
analysis contains certain forward-looking statements, which reflect management’s
current views and estimates of future economic conditions, Company performance,
and financial results. The statements are based on many assumptions and factors
that could cause future results to differ materially. Such factors include, but
are not limited to, changes in product mix, changes in fashion trends,
competitive factors, and general economic conditions, economic conditions in the
retail apparel industry, as well as other risks and uncertainties inherent in
the Company’s business and the retail industry in general. Any changes in these
factors could result in significantly different results for the Company. The
Company further cautions that the forward-looking information contained herein
is not exhaustive or exclusive. The Company does not undertake to update any
forward-looking statements, which may be made from time to time by or on behalf
of the Company.


23





ITEM 3 –
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





The
Company has evaluated the disclosure requirements of Item 305 of S-K
“Quantitative and Qualitative Disclosures about Market Risk,” and has concluded
that the Company has inherent risks in its operations as it is exposed to
certain market risks, including interest rates.





Interest Rate Risk -
To the extent that the Company borrows under its line of credit facility, the
Company would be exposed to market risk related to changes in interest rates. As
of May 1, 2010, no borrowings were outstanding under the line of credit
facility. The Company is not a party to any derivative financial instruments.
Additionally, the Company is exposed to market risk related to interest rate
risk on the cash and investments in interest-bearing securities. These
investments have carrying values that are subject to interest rate changes that
could impact earnings to the extent that the Company did not hold the
investments to maturity. If there are changes in interest rates, those changes
would also affect the investment income the Company earns on its cash and
investments. For each one-quarter percent decline in the interest/dividend rate
earned on cash and investments (approximately a 50% change in the rate earned),
the Company’s net income would decrease approximately $0.4 million, or less than
$0.01 per share. This amount could vary based upon the number of shares of the
Company’s stock outstanding and the level of cash and investments held by the
Company.





Other Market Risk –
At May 1, 2010, the Company held $25.8 million, at par value, of investments in
auction-rate securities (“ARS”) and preferred stock. The Company concluded that
a $1.2 million temporary impairment and $2.7 million other-than-temporary
impairment existed related to these securities as of May 1, 2010. Given current
market conditions in the ARS and equity markets, the Company may incur
additional temporary or other-than-temporary impairment in the future if market
conditions persist and the Company is unable to recover the cost of its
investments in ARS.





ITEM 4 –
CONTROLS AND PROCEDURES





The
Company maintains a system of disclosure controls and procedures that are
designed to provide reasonable assurance that material information, which is
required to be timely disclosed, is accumulated and communicated to management
in a timely manner. An evaluation of the effectiveness of the design and
operation of the Company’s disclosure controls and procedures (as defined in
Rules 13a-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) was
performed as of the end of the period covered by this report. This evaluation
was performed under the supervision and with the participation of the Company’s
Chief Executive Officer and Chief Financial Officer.





Based
upon that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the Company’s disclosure controls and procedures as of the end of
the period covered by this report were effective to provide reasonable assurance
that information required to be disclosed by the Company in the Company’s
reports that it files or submits under the Exchange Act is accumulated and
communicated to management, including its Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure and are effective to provide reasonable assurance that such
information is recorded, processed, summarized, and reported within the time
periods specified by the SEC’s rules and forms.





Change in Internal Control
Over Financial Reporting





There
were no changes in the Company's internal control over financial reporting that
occurred during the Company's last fiscal quarter that have materially affected,
or are reasonably likely to materially affect, the Company's internal control
over financial reporting.


24





THE
BUCKLE, INC.





PART II —
OTHER INFORMATION





Item
1.    Legal
Proceedings:                                                                                                None





Item 1A.
Risk
Factors:





The effect of economic
pressures and other business factors – During the thirteen weeks ended
May 1, 2010, economic conditions continued to cause uncertainty in the market,
which resulted in a lack of consumer confidence and a reduction of consumer
spending. The success of our operations depends to a significant extent upon a
number of factors relating to discretionary consumer spending, including
economic conditions affecting disposable consumer income such as employment,
consumer debt, interest rates, increases in energy costs, and consumer
confidence. There can be no assurance that consumer spending will not be further
negatively affected by general or local economic conditions, which could have an
adverse impact on our continued growth and results of operations.





Item
2.    Unregistered Sales of Equity
Securities and Use of Proceeds:





The
following table sets forth information concerning purchases made by the Company
of its common stock for each of the months in the fiscal quarter ended May 1,
2010:





Total
                              Number
                              of Shares
                              Purchased
                            
                            
                            Average
                              Price Paid
                              Per Share
                            
                            
                            Total Number of
                              Shares Purchased
                              as Part of Publicly
                              Announced Plans
                            
                            
                            Maximum Number of Shares
                              that May Yet Be Purchased
                              Under Publicly
                              Announced PlansJan.
      31, 2010 to Feb. 27, 2010
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            799,300Feb.
      28, 2010 to April 3, 2010
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            799,300April
      4, 2010 to May 1, 2010
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            799,300-
                            
                            
                            
                            -
                            
                            
                            
                            -





The
      Board of Directors authorized a 1,000,000 share repurchase plan on
      November 20, 2008. The Company has 799,300 shares remaining to complete
      this authorization.





Item
3.    Defaults Upon Senior
Securities:                                                                        None





Item
4.    Reserved.





Item
5.    Other
Information:                                                                                               None




Item
6.    Exhibits:





(a)
            Exhibits
      31.1 and 31.2 certifications, as well as Exhibits 32.1 and 32.2
      Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
      Section 906 of the Sarbanes-Oxley Act of
2002.


25


THE
BUCKLE, INC.





SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.





THE
      BUCKLE, INC.Dated:
      June 10
      ,2010
                                /s/  DENNIS H.
      NELSON                           .DENNIS
      H. NELSON, President and CEO(principal
      executive officer)Dated:
      June 10
      ,2010
                                /s/  KAREN B.
      RHOADS                           .KAREN
      B. RHOADS, Vice Presidentof
      Finance and CFO(principal
      accounting
officer)


26