10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

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

THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended February 3, 2007

oTRANSITION 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 incorporation or organization)	(I.R.S. Employer 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 Registered
Common Stock, $.01 par value	New York Stock Exchange

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

Yes o No þ

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 o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K o.

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

o Large accelerated filer;þ  Accelerated filer; o  Non-accelerated filer

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

The aggregate market value (based on the closing price of the New York Stock Exchange) of the common stock of the registrant held by non-affiliates of the registrant was $348,270,190.02 on July 29, 2006. For purposes of this response, executive officers and directors are deemed to be the affiliates of the Registrant and the holdings by non-affiliates was computed as 8,796,923 shares.

The number of shares outstanding of the Registrant's Common Stock, as of March 29, 2007, was 29,876,089.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive Proxy Statement dated April 27, 2007 for Registrant’s 2007 Annual Meeting of Shareholders to be held May 31, 2007 are incorporated by reference in Part III.

The Buckle, Inc.

Form 10-K

February 3, 2007

Table of Contents

		Page
	Part I
Item 1.	Business	3
Item 1A.	Risk Factors	11
Item 1B.	Unresolved Staff Comments	12
Item 2.	Properties	13
Item 3.	Legal Proceedings	13
Item 4.	Submission of Matters to a Vote of Security Holders	13
	Part II
Item 5.	Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities	13
Item 6.	Selected Financial Data	15
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	15
Item 8.	Financial Statements and Supplementary Data	15
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	16
Item 9A.	Controls and Procedures	16
Item 9B.	Other Information	18
	Part III
Item 10.	Directors, Executive Officers and Corporate Governance	18
Item 11.	Executive Compensation	18
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	18
Item 13.	Certain Relationships and Related Transactions	18
Item 14.	Principal Accountant Fees and Services	18
	Part IV
Item 15.	Exhibits and Financial Statements Schedules	18

2

PART I

ITEM 1 - BUSINESS

The Buckle, Inc. (the "Company") is a retailer of medium to better-priced casual apparel, footwear and accessories for fashion conscious young men and women. As of February 3, 2007, the Company operated 350 retail stores in 38 states throughout the continental United States, excluding the northeast, under the names "Buckle" and "The Buckle." The Company markets a wide selection of mostly brand name casual apparel including denims, other casual bottoms, tops, sportswear, outerwear, accessories and footwear. The Company emphasizes personalized attention to its customers and provides customer services such as free alterations, free gift-wrapping, easy layaways, the Buckle private label credit card and a frequent shopper program. Most stores are located in regional, high-traffic shopping malls and lifestyle centers, and this is the Company's strategy for future expansion. The majority of the Company's central office functions, including purchasing, pricing, accounting, advertising and distribution, are controlled from its headquarters and distribution center in Kearney, Nebraska. However, the men’s buying team and the marketing team have had a portion of their employees in Kansas City, Missouri for several years and the Company is currently in the process of relocating the entire men’s buying team to a new office in Overland Park, Kansas.

Incorporated in Nebraska in 1948, the Company commenced business under the name Mills Clothing, Inc., a conventional men's clothing store with only one location. In 1967, a second store, under the trade name Brass Buckle, was purchased. In the early 1970s, the store image changed to that of a jeans store with a wide selection of denims and shirts. The first branch store was opened in Columbus, Nebraska, in 1976. In 1977, the Company began selling young women's apparel and opened its first mall store. The Company has experienced significant growth over the past ten years, growing from 181 stores at the start of 1997 to 350 stores by the close of fiscal 2006. The Company changed its corporate name to The Buckle, Inc. on April 23, 1991. All references herein to fiscal 2006 refer to the 53-week period ended February 3, 2007. Fiscal 2005 refers to the 52-week period ended January 28, 2006 and fiscal 2004 refers to the 52-week period ended January 29, 2005.

The Company's principal executive offices and distribution center are located at 2407 West 24th Street, Kearney, Nebraska 68845. The Company's telephone number is (308) 236-8491. The Company publishes its corporate web site at www.buckle.com.

Available Information

The Company’s annual reports on Form 10-K, along with all other reports and amendments filed with or furnished to the Securities and Exchange Commission, are publicly available free of charge on the Investor Information section of the Company’s website at www.buckle.com as soon as reasonably practicable after the Company files such materials with, or furnishes them to, the Securities and Exchange Commission. The Company’s corporate governance policies, ethics code and Board of Directors’ committee charters are also posted within this section of the website. The information on the Company’s website is not part of this or any other report The Buckle, Inc. files with, or furnishes to, the Securities and Exchange Commission.

Marketing and Merchandising

The Company's marketing and merchandising strategy is designed to create customer loyalty by offering a wide selection of key brand name and private label merchandise and providing a broad range of value-added services. The Company believes it provides a unique specialty apparel store with merchandise designed to appeal to the fashion conscious 12 to 24-year old. The merchandise mix includes denims, casual bottoms, tops, sportswear, outerwear, accessories and footwear. Denim is a significant contributor to total sales (44.6% of fiscal 2006 net sales) and is a key to the Company's merchandising strategy. The Company believes it attracts customers with a wide selection of key brands plus private label denim and a wide variety of fits, finishes and styles. Shirts and tops are also significant contributors to total sales (31.0% of fiscal 2006 net sales). The Company strives to provide a continually changing selection of the latest casual fashions.

3

The percentage of net sales over the past three fiscal years of the Company's major product lines are set forth in the following table:

	Percentage of Net Sales
Merchandise Group	Fiscal 2006			Fiscal 2005			Fiscal 2004
Denims		44.6	%		42.7	%		40.3	%
Tops (including sweaters)		31.0			29.8			31.8
Accessories		9.2			10.2			11.4
Footwear		7.0			8.1			7.6
Outerwear		2.3			3.5			2.5
Sportswear/fashions		3.9			3.1			4.2
Casual bottoms		1.9			2.5			2.1
Other		0.1			0.1			0.1
		100.0	%		100.0	%		100.0	%

Brand name merchandise accounted for approximately 67% of the Company's sales during fiscal 2006. The remaining balance is comprised of private label merchandise that is manufactured to the Company's specifications. The Company's merchandisers continually work with manufacturers and vendors to produce brand name merchandise that they believe is unique in color and style. While the brands offered by the Company change to meet current customer preferences, the Company currently offers brands such as Lucky Brand Dungarees, Silver, Big Star, Fossil, Hurley, Guess, Quiksilver/Roxy, 7 Diamonds, Billabong, and OBEY. The Company expects that brand name merchandise will continue to constitute the majority of sales.

Management believes the Company provides a unique store environment by maintaining a high level of personalized service and by offering a wide selection of fashionable, quality merchandise. The Company believes it is essential to create an enjoyable shopping atmosphere and, in order to fulfill this mission, it must employ highly motivated employees who give personal attention to customers. Each salesperson is educated to help create a complete look for the customer by helping them find the best fits and showing merchandise as coordinating outfits. The Company also incorporates specialized services such as free alterations, free gift wrapping, layaways, a frequent shopper card, the Buckle private label credit card and a special order system that allows stores to obtain specifically requested merchandise from other Company stores. Customers are encouraged to use the Company's layaway plan, which allows customers to make a partial payment on merchandise that is then held by the store until the balance is paid. For the past three fiscal years, an average of approximately three percent of net sales has been made on a layaway basis.

Merchandising and pricing decisions are made centrally; however, the Company's distribution system allows for variation in the mix of merchandise distributed to each store. This allows individual store inventories to be tailored to reflect differences in customer buying patterns at various locations. In addition, to assure a continually fresh new look in its stores, the Company ships new merchandise daily to most stores. The Company also has a transfer program that shifts certain merchandise to locations where it is selling best. This distribution and transfer system helps to maintain customer satisfaction by providing in-stock popular items and reducing the need to mark down slow-moving merchandise at a particular location. The Company believes the reduced markdowns justify the incremental distribution costs associated with the transfer system. The Company does not hold storewide off-price sales at anytime.

The Company continually evaluates the store design as part of the overall shopping experience and feels the fiscal 2002 re-design continues to be very well received by guests and developers. This store design contains warm woods, real brick finishes and an appealing ceiling and lighting layout to provide a comfortable environment for the guest. The Company has developed modifications to the store design for specialized venues including lifestyle centers and larger mall fronts. The signature Buckle-B icon and red color are used throughout the store on fixtures, graphic images and print materials to reinforce the brand identity. To enhance selling and product presentation, new tables and fixtures were added to the Company’s signature store design in both fiscal 2006 and 2005. The new tables and fixtures were also rolled out to select existing stores to update their looks as well.

4

Marketing and Advertising

In fiscal 2006, the Company spent $6.5 million or 1.2% of net sales on seasonal marketing campaigns, advertising, promotions, online marketing and in-store point of sale materials. Seasonal image and promotional signs are presented in store window displays and on merchandising presentations throughout the store to complement the product and reinforce the brand's image. Promotions such as sweepstakes, gift with purchase offers and special events are offered to enhance the guest shopping experience. Seasonal brochures featuring current fashion trends and product selection are distributed through the stores, at special events and in new markets. Magazine advertising in leading teen publications is used during key seasons to introduce new merchandise, build awareness and brand the Buckle's image. Editorial product placement in national and regional magazines creates exposure for seasonal merchandise and the Buckle's private label brands. The Buckle partners with key merchandise vendors on joint advertising and promotional opportunities that expand the marketing reach and position the Buckle as the destination store for these specialty branded fashions.

The Company offers programs to strengthen relationships with loyal guests. The Company continues to support a frequent shopper program (the Buckle Primo Card), a rewards program designed to build customer loyalty. Private label credit card marketing is another avenue for marketing to loyal guests. The Company extends exclusive benefits to active Buckle Cardholders such as bonus rewards and special targeted mailings. The Buckle continues to build on its B-Rewards incentive program, which is offered exclusively to Buckle Cardholders. Qualifying Cardholders are mailed B-Rewards merchandise certificates at the end of each Rewards period inviting them back into the store at the start of the next season. After successfully testing the program during fiscal 2005, the Company added a student credit card program for all stores in July 2006. The Buckle Card marketing program is partially funded by WFNNB, a third-party bank that owns the Buckle Card accounts.

The Company publishes a corporate web site at www.buckle.com. The Company’s web site serves as a second retail touch-point for cross-channel marketing, reaching a growing online audience. Buckle.com is an eCommerce enabled channel with an interactive, entertaining, informative and brand building environment where guests can shop, enter sweepstakes, fill out a wish list, find out about career opportunities and read the latest Buckle financial news. The Company has an opt-in email database. National email campaigns are sent bi-monthly and targeted weekly messages are sent notifying guests of the latest store promotions and product offerings. Search engine and affiliate marketing programs are managed to increase online and in-store traffic as well as conversion rates. Buckle’s online store was launched April 26, 1999 as a marketing tool, to extend the Company’s brand beyond the physical locations. Offering a growing selection of the merchandise inventory online, the Company presents the online store as a “taste test” in new markets as well as a cross-channel tool in existing markets, which means guests can shop both in the physical stores and via the online store. On October 19, 2006, the Company launched a redesigned Buckle.com on the Escalate E-Commerce platform. The new Buckle.com includes new search features which allow guests to shop by special attributes, including brand and size.

Store Operations

The Company has an Executive Vice President of Sales, a Vice President of Sales, 26 district managers and 57 area managers. The majority of the district managers and each of the area managers also serve as manager of their home base store. In general, each store has one manager, one or two assistant managers, one to three additional full-time salespeople and up to 20 part-time salespeople. Most stores have peak levels of staff during the back-to-school and Christmas seasons. Almost every location also employs a seamstress.

The Company places great importance on educating quality personnel. In addition to sharing career opportunities with current Buckle employees, the Company also recruits interns and management trainees from college campuses. A majority of the Company’s store managers, all of its area and district managers and most of its upper level management are former salespeople, including the President and CEO, Dennis H. Nelson and Chairman, Daniel J. Hirschfeld. Recognizing talent and promoting managers from within allows the Company to build a strong foundation for management.

Store managers receive compensation in the form of a base salary and incentive bonuses. District and area managers also receive added incentives based upon the performance of stores in their district/area. Store managers perform sales training for new employees at the store level. Salespeople displaying particular talent are generally assigned to stores operated by district managers for training to become a store manager.

The Company has established a comprehensive program stressing the prevention and control of shrinkage losses. Steps taken to reduce shrinkage include monitoring cash refunds, voids, inappropriate discounts, employee sales and returns-to-vendor. The Company also has electronic article surveillance systems in all of the Company’s stores as well as surveillance camera systems in approximately 85% of the stores. As a result, the Company achieved a merchandise shrinkage rate of 0.7% of net sales for fiscal 2006, 0.6% of net sales for fiscal 2005 and 0.7% for fiscal year 2004.

5

The average store is approximately 4,900 square feet (of which the Company estimates an average of approximately 80% is selling space), and stores range in size from 2,600 square feet to 8,475 square feet.

Purchasing and Distribution

The Company has an experienced buying team. The buying team includes the President, Vice President of Women’s Merchandising, Vice President of Men’s Merchandising, six women’s buyers and five men’s buyers. The two Vice Presidents of Merchandising have over 50 years of combined experience with the Company. The experience and leadership within the buying team contributes significantly to the Company’s success by enabling the buying team to react quickly to changes in fashion and by providing extensive knowledge of sources for branded and private label goods.

The Company purchases products from manufacturers within the United States as well as from agents who source goods from foreign manufacturers. The Company's merchandising team shops and monitors U.S. fashion centers (in New York and on the West Coast) to stay abreast of the latest trends. The Company continually monitors fabric selection, quality and delivery schedules. The Company has not experienced any material difficulties with merchandise manufactured in foreign countries. The Company does not have long-term or exclusive contracts with any brand name manufacturer, private label manufacturer or supplier. The Company plans its private label production with several private label vendors three to six months in advance of product delivery. The Company requires its vendors to sign and adhere to its Code of Conduct and Standards of Engagement, which addresses adherence to legal requirements regarding employment practices and health, safety, and environmental regulations.

In fiscal 2006, Koos Manufacturing, Inc. (one of the Company’s private label vendors) and Lucky Brand Dungarees made up 21.1% and 16.1% of the Company’s net sales, respectively. No other vendor accounted for more than 10% of the Company’s sales. Other current significant vendors include Silver, Big Star, Fossil, Hurley, Billabong, Guess, Quiksilver/Roxy, 7 Diamonds, and OBEY. The Company continually strives to offer brands that are currently popular with its customers and, therefore, the Company's suppliers and purchases from specific vendors may vary significantly from year to year.

The Buckle stores generally carry the same merchandise, with quantity and seasonal variations based upon historical sales data, climate and perceived local customer demand. The Company uses a centralized receiving and distribution center located within the corporate headquarters building in Kearney, Nebraska. Merchandise is received daily in Kearney where it is sorted, tagged with bar-coded tickets (unless the vendor UPC code can be used or the merchandise is pre-ticketed), and packaged for distribution to individual stores primarily via United Parcel Service. The Company's goal is to ship the majority of its merchandise out to the stores within one to two business days of receipt. This system allows stores to receive new merchandise almost every day, creating excitement within each store and providing customers with a reason to shop often.

The Company completed an 82,200 square foot expansion to its corporate headquarters facility during fiscal 2005. This expansion houses the Company’s online fulfillment and customer service center and allows additional space for the supplies and returns-to-vendor departments. The online fulfillment center occupies approximately 100,000 square feet of space on three levels. The Company plans to renovate the space vacated by supplies and returns in fiscal 2007 to add new office space. The current distribution center should allow for handling of up to 450 stores. The Company has developed an effective computerized system for tracking merchandise from the time it is checked in at the Company's distribution center until it arrives at the stores and is sold to a customer. The system's function is to insure that store shipments are delivered accurately and promptly, to account for inventory and to assist in allocating merchandise among stores. Management can track, on a daily basis, which merchandise is selling at specific locations and direct transfers of merchandise from one store to another as necessary. This allows stores to carry a reduced inventory while at the same time satisfying customer demands.

To reduce inter-store shipping costs and provide timely restocking of in-season merchandise, the Company warehouses a portion of initial shipments for later distribution. Sales reports are then used to replenish, on a basis of one to three times each week, those stores that are experiencing the greatest success selling specific styles, colors and sizes of merchandise. This system is also designed to prevent an over-crowded look in the stores at the beginning of a season.

6

Store Locations and Expansion Strategies

As of April 1, 2007, the Company operated 351 stores in 38 states, including 2 stores opened and 1 closed during fiscal 2007. The existing stores are in 4 downtown locations, 9 strip centers, 20 lifestyle centers and 318 shopping malls. The Company anticipates opening approximately 20 new stores in fiscal 2007. For fiscal 2007, 16 of the new stores are expected to be located in higher traffic shopping malls and 4 of the new stores are expected to be located in lifestyle centers. The following table lists the location of existing stores as of April 1, 2007:

		Location of Stores
State	Number of Stores	State	Number of Stores	State	Number of Stores
Alabama	7	Louisiana	8	Oregon	2
Arizona	8	Michigan	18	Pennsylvania	6
Arkansas	6	Minnesota	12	South Carolina	1
California	14	Mississippi	5	South Dakota	3
Colorado	13	Missouri	12	Tennessee	11
Florida	9	Montana	5	Texas	38
Georgia	4	Nebraska	14	Utah	10
Idaho	5	Nevada	2	Virginia	2
Illinois	16	New Mexico	4	Washington	10
Indiana	13	North Carolina	8	West Virginia	2
Iowa	18	North Dakota	3	Wisconsin	13
Kansas	17	Ohio	13	Wyoming	1
Kentucky	5	Oklahoma	13	Total	351

The Buckle has grown significantly over the past ten years, with the number of stores increasing from 181 at the beginning of 1997 to 350 at the end of fiscal 2006. The Company's plan is to continue expansion by developing the geographic region it currently serves and by expanding into contiguous markets. The Company intends to open new stores only when management believes there is a reasonable expectation of satisfactory results.

The following table sets forth information regarding store openings and closings since the beginning of fiscal 1997 to the end of fiscal 2006: 

Total Number of Stores Per Year
Fiscal Year	Open at start of year		Opened in Current Year		Closed in Current Year		Total
1997		181		19		1		199
1998		199		24		1		222
1999		222		27		1		248
2000		248		28		2		274
2001		274		24		3		295
2002		295		11		2		304
2003		304		16		4		316
2004		316		13		2		327
2005		327		15		4		338
2006		338		17		5		350

The Company's criteria used when considering a particular location for expansion include:

1. Market area, including proximity to existing markets to capitalize on name recognition;

2. Trade area population (number, average age, and college population);

3. Economic vitality of market area;

4. Mall location, anchor tenants, tenant mix, average sales per square foot;

5. Available location within a mall, square footage, storefront width, and facility of using the current store design;

6. Availability of suitable management personnel for the market;

7. Cost of rent, including minimum rent, common area and extra charges;

8. Estimated construction costs, including landlord charge backs and tenant allowances.

7

The Company generally seeks sites of 4,250 to 5,000 square feet for its stores. The projected cost of opening a store with the new design is approximately $867,000, including construction costs of approximately $656,000 (prior to any construction allowance received) and inventory costs of approximately $211,000, net of accounts payable.

The Company anticipates opening approximately 20 new stores during fiscal 2007 and completing approximately 12 remodels. Remodels range from partial to full, with construction costs for a full remodel being nearly the same as for a new store. Of the stores scheduled for remodeling during fiscal 2007, it is estimated that approximately 7 to 8 stores will receive full remodeling. The Company has budgeted a total of $28 to $30 million for new store construction, remodeling, technology upgrades and improvements at the corporate headquarters during fiscal 2007.

The Company plans to expand in 2007 by opening stores in existing markets. The Company believes that, given the time required for training personnel, staffing a store and developing adequate district and regional managers, its current management infrastructure is sufficient to support its currently planned rate of growth.

The Company's ability to expand in the future will depend, in part, on general business conditions, the ability to find suitable malls with acceptable sites on satisfactory terms, the availability of financing and the readiness of trained store managers. There can be no assurance that the Company's expansion plans will be fulfilled in whole or in part, or that leases under negotiation for planned new sites will be obtained on terms favorable to the Company.

Management Information Systems

The Company's management information systems (MIS) and electronic data processing systems (EDP) consist of a full range of retail, financial and merchandising systems, including purchasing, inventory distribution and control, sales reporting, accounts payable and merchandise management.

The system includes PC basedpoint-of-sale (POS) registers equipped with bar code readers in each store. These registers are polled nightly by the central computer (IBM iSeries) using a virtual private network for collection of comprehensive data, including complete item-level sales information, employee time clocking, merchandise transfers and receipts, special orders, supply orders and returns-to-vendor. In conjunction with the nightly polling, the central computer sends the PC servermessages from various departments at the Company headquarters and price changes for the price lookup (PLU) file maintained within the POS registers.

Each weekday morning, the Company initiates an electronic "sweep" of the individual store bank accounts to the Company's primary concentration account. This allows the Company to meet its obligations with a minimum of borrowing and to invest excess cash on a timely basis.

Management monitors the performance of each of its stores on a continual basis. Daily information is used to evaluate inventory, determine markdowns, analyze profitability and assist management in the scheduling and compensation of employees.

The PLU system allows management to control merchandise pricing centrally, permitting faster and more accurate processing of sales at the store and the monitoring of specific inventory items to confirm that centralized pricing decisions are carried out in each of the stores. Management is able to direct all price changes, including promotional, clearance and markdowns on a central basis and estimate the financial impact of such changes.

The virtual private network for communication with the stores also supports the Company’s intranet site. The intranet allows stores to view various types of information from the corporate office. Stores also have access to a variety of tools such as a product search feature with pictures, printable forms and links to transmit various requests and information to the corporate office.

The Company is committed to ongoing review of the MIS and EDP systems to maintain productive, timely information and effective controls. This review includes testing of new products and systems to assure that the Company is aware of technological developments. Most important, continual feedback is sought from every level of the Company to assure that information provided is pertinent to all aspects of the Company's operations.

8

Employees

As of February 3, 2007, the Company had approximately 6,100 employees - approximately 1,300 of whom were full-time. The Company has an experienced management team and substantially all of the management team, from store managers through senior management, began work for the Company on the sales floor. The Company experiences high turnover of store and distribution center employees, primarily due to the number of part-time employees. However, the Company has not experienced significant difficulty in hiring qualified personnel. Of the total employees, approximately 390 are employed at the corporate headquarters and in the distribution center. None of the Company's employees are represented by a union. Management believes that employee relations are good.

The Company provides medical, dental, life insurance and long-term disability plans, as well as a 401(k) and a section 125 cafeteria plan for eligible employees. An employee must be at least 20 years of age and work a minimum of 1,000 hours during the plan year to be eligible for the 401(k) plan. To be eligible for the plans, other than the 401(k) Plan, an employee must have worked for the Company for 90 days or more, and his or her normal workweek must be 35 hours or more. As of February 3, 2007, 1,089 employees participated in the medical plan, 1,099 in the dental plan, 993 in the life insurance plan, 299 in the supplemental life insurance plan, 955 in the long-term disability plan and 767 in the cafeteria plan. With respect to the medical, dental and life insurance plans, the Company pays 80% to 100% of the employee's expected premium cost plus 20% to 100% of the expected cost of dependent coverage under the health plan. The exact percentage is based upon the employee's term of employment and job classification within the Company. In addition, all employees receive discounts on company merchandise.

Competition

The men's and women's apparel industries are highly competitive with fashion, selection, quality, price, location, store environment and service being the principal competitive factors. While the Company believes it is able to compete favorably with other merchandisers, including department stores and specialty retailers, with respect to each of these factors, the Company believes it competes mainly on the basis of customer service and merchandise selection.

In the men's merchandise area, the Company competes with specialty retailers such as Abercrombie & Fitch, American Eagle Outfitters, Hollister, Hot Topic, Gap and Pacific Sunwear. The men's market also competes with certain department stores, such as Dillards, Federated stores, Parisian, Saks, Bon-Ton stores and other local or regional department stores and specialty retailers, as well as with mail order and internet retailers.

In the women's merchandise area, the Company competes with specialty retailers such as Abercrombie & Fitch, American Eagle Outfitters, Express, Aeropostale, Hollister, Gap, Maurices, Pacific Sunwear, Wet Seal, Forever 21, and Vanity. The women's market also competes with department stores, such as Dillards, Federated stores, Parisian, Saks, Bon-Ton stores and certain local or regional department stores and specialty retailers, as well as with mail order and internet retailers.

Many of the Company's competitors are considerably larger and have substantially greater financial, marketing and other resources than the Company, and there is no assurance that the Company will be able to compete successfully with them in the future. Furthermore, while the Company believes it competes effectively for favorable site locations and lease terms, competition for prime locations within a mall is intense.

Trademarks

"BUCKLE”, “RECLAIM”, “BKE”, and "THE BUCKLE" are federally registered trademarks of the Company. The Company believes the strength of its trademarks is of considerable value to its business, and its trademarks are important to its marketing efforts. The Company intends to protect and promote its trademarks as management deems appropriate.

9

Executive Officers of the Company

The Executive Officers of the Company are listed below, together with brief accounts of their experience and certain other information.

Daniel J. Hirschfeld, age 65. Mr. Hirschfeld is Chairman of the Board of the Company. He has served as Chairman of the Board since April 19, 1991. Prior to that time, Mr. Hirschfeld served as President and Chief Executive Officer. Mr. Hirschfeld has been involved in all aspects of the Company's business, including the development of the Company's management information systems.

Dennis H. Nelson, age 57. Mr. Nelson is President and Chief Executive Officer and a Director of the Company. He has held the titles of President and Director since April 19, 1991. Mr. Nelson was elected Chief Executive Officer on March 17, 1997. Mr. Nelson began his career with the Company in 1970 as a part-time salesman while he was attending Kearney State College (now the University of Nebraska - Kearney). While attending college, he became involved in merchandising and sales supervision for the Company. Upon graduation from college in 1973, Mr. Nelson became a full-time employee of the Company and he has worked in all phases of the Company's operations since that date. Prior to his election as President and Chief Operating Officer on April 19, 1991, Mr. Nelson performed all of the functions normally associated with those positions.

Karen B. Rhoads, age 48. Ms. Rhoads is the Vice President of Finance, Treasurer, Chief Financial Officer and a Director of the Company. Ms. Rhoads was elected a Director on April 19, 1991. She worked in the corporate offices while attending Kearney State College (now the University of Nebraska - Kearney) and later worked part-time on the sales floor. Ms. Rhoads practiced as a CPA for 6 1/2 years, during which time she began working on tax and accounting matters for the Company as a client. She has been employed with the Buckle since November 1987.

James E. Shada, age 51. Mr. Shada is Executive Vice President of Sales and a Director of the Company. He was elected Executive Vice President on May 31, 2001 and served as Vice President of Sales from April 19, 1991 until such date. Mr. Shada was elected Director of the Company on May 30, 2002. He began employment with the Company in November 1978 as a salesperson. Between 1979 and 1985, he managed and opened new stores for the Company, and in 1985 Mr. Shada became the Company's sales manager. He is also involved in site selection and development and the education of personnel as store managers and as area and district managers.

Brett P. Milkie, age 47. Mr. Milkie is Vice President of Leasing. He was elected Vice President of Leasing on May 30, 1996. Mr. Milkie was a leasing agent for a national retail mall developer for 6 years prior to joining the company in January 1992 as director of leasing.

Kari G. Smith, age 43. Ms. Smith is Vice President of Sales. She has held this position since May 31, 2001. Ms. Smith joined the Company May 16, 1978 as a part-time salesperson. Later she became store manager in Great Bend, KS and then began working with other stores as an area manager. Ms. Smith has continued to develop her involvement with the sales management executive team, helping with manager meetings and new store manager development, as well as providing support for store managers, area managers and district managers.

Patricia K. Whisler, age 50.Ms. Whisler is Vice President of Women’s Merchandising. She has held this position since May 31, 2001. Ms. Whisler joined the Company in February 1976 as a part-time salesperson and later became manager of a Buckle store before returning to the corporate office in 1983 to work as part of the growing merchandising team.

Kyle L. Hanson, age 42. Ms. Hanson is the Corporate Secretary and General Counsel. She has held this position since February 2001. Ms. Hanson joined the Company in May 1998 as General Counsel. She also worked for the Company as a part-time salesperson while attending Kearney State College (now the University of Nebraska - Kearney). Ms. Hanson was previously First Vice President and Trial Attorney for Mutual of Omaha Companies for 2 years and an attorney with Kutak Rock law firm in Omaha from 1990 to 1996.

Robert M. Carlberg, age 44. Mr. Carlberg is Vice President of Men’s Merchandising. He has held this position since December 11, 2006. Mr. Carlberg started with the Company as a salesperson and also worked as a store manager and as an area and district leader while being involved and traveling with the Men’s Merchandising team. He has been full-time with the merchandising team since January 2001.

10

ITEM 1A - RISK FACTORS

Cautionary Statement Pursuant to the Private Securities Litigation Reform Act of 1995 and Risk Factors

Certain statements herein, including anticipated store openings, trends in or expectations regarding The Buckle, Inc.’s revenue and net earnings growth, comparable store sales growth, cash flow requirements and capital expenditures, all constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. Actual future results and trends may differ materially depending on a variety of factors, including, but not limited to, changes in product mix, changes in fashion trends and/or pricing, competitive factors, general economic conditions, economic conditions in the retail apparel industry, successful execution of internal performance and expansion plans and other risks detailed herein and in The Buckle, Inc.’s other filings with the Securities and Exchange Commission.

A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. Users should not place undue reliance on the forward-looking statements, which are accurate only as of the date of this report. The Company is under no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The following are material risk factors.

Merchandising/Fashion Sensitivity. The Company’s success is largely dependent upon its ability to gauge the fashion tastes of its customers and to provide merchandise that satisfies customer demand in a timely manner. The Company’s failure to anticipate, identify or react appropriately and timely to the changes in fashion trends would reduce the Company’s net sales and profitability. Misjudgments or unanticipated fashion changes could have a negative impact on the Company’s image with its customers, which would also reduce the Company’s net sales and profitability.

Private Label Merchandise. Sales from private label merchandise accounted for approximately 33% of the net sales for both fiscal 2006 and fiscal 2005. The Company may increase or decrease the percentage of net sales in private label merchandise in the future. The Company’s private label products generally earn a higher margin than branded product. Thus, reductions in the private label mix would decrease the Company’s merchandise margin and, as a result, reduce net earnings.

Fluctuations in Comparable Store Net Sales Results. The Company’s comparable store net sales results have fluctuated in the past and are expected to continue to fluctuate in the future. A variety of factors affect comparable sales results, including changes in fashion trends, changes in the Company’s merchandise mix, calendar shifts of holiday periods, actions by competitors, weather conditions and general economic conditions. As a result of these or other factors, the Company’s future comparable sales could decrease, reducing overall net sales and profitability. These reductions could also cause the market price of the Company’s common stock to decline.

Expansion and Management of Growth. The Buckle, Inc.’s continued growth depends on its ability to open and operate stores on a profitable basis and management’s ability to manage planned expansion. During fiscal 2007, the Company plans to open 20 new stores. This expansion is dependent upon factors such as the ability to locate and obtain favorable store sites, negotiate acceptable lease terms, obtain necessary merchandise and hire and train qualified management and other employees. There may be factors outside of the Company’s control that affect the ability to expand, including general economic conditions. There is no assurance that the Company will be able to achieve its planned expansion or that such expansion will be profitable. If the Company fails to manage its store growth, there would be less growth in the Company’s net sales from new stores and less growth in profitability. If the Company opened unprofitable store locations, there could be a reduction in net earnings, even with the resulting growth in the Company’s net sales.

Reliance on Key Personnel. The continued success of The Buckle, Inc. is dependent to a significant degree on the continued service of key personnel, including senior management. The loss of a member of senior management could create additional expense in covering their position as well as cause a reduction in net sales, thus reducing in net earnings. The Company’s success in the future will also be dependent upon the Company’s ability to attract and retain qualified personnel. The Company’s failure to attract and retain qualified personnel could reduce the number of new stores the Company could open in a year which would cause net sales to decline, could create additional operating expenses and could reduce overall profitability for the Company.

Dependence on a Single Distribution Facility and Third-Party Carriers. The distribution function for all of the Company’s stores is handled from a single facility in Kearney, Nebraska. Any significant interruption in the operation of the distribution facility due to natural disasters, system failures or other unforeseen causes would impede the distribution of merchandise to the stores, causing a decline in store inventory, a reduction in store sales and a reduction in company profitability. Interruptions in service by common carriers could also delay shipment of goods to Company store locations. Additionally, there can be no assurance that the current facilities will be adequate to support the Company’s future growth.

Reliance on Foreign Sources of Production. The Company purchases a portion of its private label merchandise through Sourcing agents in foreign markets. In addition, some of the Company’s domestic vendors manufacture goods overseas. The Company does not have any long-term merchandise supply contracts and its imports are subject to existing or potential duties, tariffs and quotas. The Company faces a variety of risks associated with doing business overseas including competition for facilities and quotas, political instability, possible new legislation relating to imports that could limit the quantity of merchandise that may be imported, imposition of duties, taxes and other charges on imports and local business practice and political issues which may result in adverse publicity. The Company’s inability to rely on foreign sources of production due to these or other causes could reduce the amount of inventory the Company is able to purchase, hold up the timing on the receipt of new merchandise and reduce merchandise margins if comparable inventory is purchased from branded sources. Any or all of these changes would cause a decrease in the Company’s net sales and in net earnings.

Dependence upon Maintaining Sales and Profit Growth in the Highly Competitive Retail Apparel Industry. The specialty retail industry is highly competitive. The Company competes primarily on the basis of fashion, selection, quality, price, location, service and store environment. The Company faces a variety of competitive challenges, including:

11

· anticipating and responding timely to changing customer demands and preferences;

·   effectively marketing both branded and private label merchandise to consumers in several diverse market segments and maintaining favorable brand recognition;

·   providing unique, high-quality merchandise in styles, colors and sizes that appeal to consumers;

· sourcing merchandise efficiently;

· competitively pricing merchandise and creating customer perception of value;

· increased labor costs, including increases in health care benefits and worker’s compensation costs.

There is no assurance that the Company will be able to compete successfully in the future.

Reliance on Consumer Spending Trends. The continued success of the Company depends, in part, upon numerous factors that impact the levels of individual disposable income and thus, consumer spending. Factors include the political environment, economic conditions, employment, consumer debt, interest rates, inflation and consumer confidence. A decline in consumer spending, for any reason, could have an adverse effect on the Company’s net sales, gross profits and results from operations.

Modifications and/or Upgrades to Information Technology Systems May Disrupt Operations. The Company relies upon its various information systems to manage its operations and regularly evaluates its information technology in order for management to identify investment opportunities for maintaining, modifying, upgrading or replacing these systems. There are inherent risks associated with replacing or changing these systems. Any delays, errors in capturing data or difficulties in transitioning to these or other new systems, or in integrating these systems with the Company’s current systems, or any other disruptions affecting the Company’s information systems, could have a material adverse impact on the Company’s business.

The Company cautions that the risk factors described above could cause actual results to vary materially from those anticipated from any forward-looking statements made by or on behalf of the Company. Management cannot assess the impact of each factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to vary from those contained in forward-looking statements.

ITEM 1B - UNRESOLVED STAFF COMMENTS

None.

12

ITEM 2 - PROPERTIES

All of the store locations operated by the Company are leased facilities. Most of the Company's stores have lease terms of approximately ten years and generally do not contain renewal options. In the past, the Company has not experienced problems renewing its leases, although no assurance can be given that the Company can renew existing leases on favorable terms. The Company seeks to negotiate extensions on leases for stores undergoing remodeling to provide terms of approximately ten years after completion of remodeling. Consent of the landlord generally is required to remodel or change the name under which the Company does business. The Company has not experienced problems in obtaining such consent in the past. Most leases provide for a fixed minimum rental plus an additional rental cost based upon a set percentage of sales beyond a specified breakpoint, plus common area and other charges. The current terms of the Company's leases, including automatic renewal options, expire on or before January 31^st of each of the following years:

Year	Number of expiring leases
2008		63
2009		38
2010		58
2011		43
2012		32
2013		22
2014		30
2015 and later		65
Total		351

The corporate headquarters and distribution center for the Company operate within a facility purchased by the Company in 1988, and located in Kearney, NE. The building currently provides approximately 261,200 square feet of space, which includes approximately 82,200 square feet related to the Company’s 2006 addition. The Company also owns a 40,000 square foot building with warehouse and office space near the corporate headquarters. This building also houses the Company’s screenprinting operations. The Company also acquired the lease, with favorable terms, on the land the building is built upon. The lease is currently in the second of ten five-year renewal options, which expires on October 31, 2011.

ITEM 3 - LEGAL PROCEEDINGS

From time to time, the Company is involved in litigation relating to claims arising out of its operations in the normal course of business. As of the date of this form, the Company was not engaged in any legal proceedings that are expected, individually or in the aggregate, to have a material effect on the Company.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of security holders during the fourth quarter of fiscal 2006.

PART II

ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUERS PURCHASE OF EQUITY SECURITIES

The Company’s common stock trades on the New York Stock Exchange under the symbol BKE. Prior to the Company’s initial public offering on May 6, 1992, there was no public market for the Company’s common stock. During the third quarter of fiscal 2003, the Board of Directors authorized the Company’s first ever cash dividend of $.0667 per share to be paid quarterly, with the initial dividend payment on October 27, 2003 and the second quarterly dividend payment on January 27, 2004. During fiscal 2004, the Company continued quarterly dividend payments with $.0667 per share paid during each of the first two quarters and $.08 per share for the third and fourth quarters. Dividend payments continued during fiscal 2005 with $.08 per share paid in the first quarter, $.10 per share paid in the second quarter and $.1133 per share paid in the third and fourth quarters. The Company continued the $.1133 per share cash dividends in the first and second quarters of fiscal 2006, while in the third quarter of fiscal 2006, it paid cash dividends of $.1333 per share and in the fourth quarter of fiscal 2006, it paid cash dividends of $.20 per share. In addition, the Company paid a special one-time cash dividend of $2.00 per share in the fourth quarter of fiscal 2006. The dividend amounts paid prior to the Company’s January 12, 2007 3-for-2 stock split have been adjusted to reflect the impact of the split. The Company plans to continue its quarterly dividends during fiscal 2007.

13

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 February 3, 2007:

	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans		Approximate Number of Shares Yet Be Purchased Under Publicly Announced Plans
Oct. 29, 2006 to Nov. 25, 2006		-	$	0		-		380,100
Nov. 26, 2006 to Dec. 30, 2006		-	$	0		-		380,100
Dec. 31, 2006 to Feb. 3, 2007		-	$	0		-		380,100
		-	$	0		-

The Board of Directors authorized a 1,500,000 share repurchase plan. This plan had 380,100 shares remaining as of February 3, 2007. Shares have been adjusted to reflect the impact of the Company’s 3-for-2 stock split paid in the form of a stock dividend on January 12, 2007.

Stock Price Performance Graph

The graph below compares the cumulative total return on common shares of the Company for the last five fiscal years with the cumulative total return on the Russell 2000 Stock Index and a peer group of Retail Trade Stocks.

Total Return Analysis
	2/2/2002		2/1/2003		1/31/2004		1/29/2005		1/28/2006		2/3/2007
The Buckle, Inc.	$	100.00	$	83.36	$	130.37	$	147.15	$	184.33	$	283.78
Peer Group	$	100.00	$	92.17	$	127.34	$	179.64	$	186.73	$	231.62
Russell 2000	$	100.00	$	77.04	$	120.22	$	129.17	$	151.77	$	165.67

Source: CTA Integrated Communications www.ctaintegrated.com (303) 665-4200. Data from ReutersBRIDGE Data Networks

14

The number of record holders of the Company’s common stock as of March 29, 2007 was 341. Based upon information from the principal market makers, the Company believes there are approximately 2,500 beneficial owners. The closing price of the Company’s common stock on March 29, 2007 was $35.10.

Additional information required by this item is incorporated by reference to the information on page 36 of the Company’s 2006 Annual Report to Shareholders under the caption “Stock Prices by Quarter” which is attached to this Form 10-K. The remainder of the information required by this item appears in the Notes to Financial Statements under Footnote I "Stock-Based Compensation" on pages 32 to 34 in the Company's Annual Report to Shareholders which is attached to this Form 10-K and is incorporated by reference.

ITEM 6 - SELECTED FINANCIAL DATA

The information required by this item is incorporated by reference to information on page 8 in the Company’s 2006 Annual Report to Shareholders under the caption “Selected Financial Data” which is attached to this Form 10-K.

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information required by this item is incorporated by reference to the information appearing on pages 9 through 16 in the Company’s 2006 Annual Report to Shareholders which is attached to this Form 10-K.

ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET 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 February 3, 2007, no borrowings were outstanding under our 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 7% change in the rate earned), the Company’s net income would decrease approximately $310,000 or approximately $.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.

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements together with the report of Deloitte & Touche LLP, an independent registered public accounting firm, dated April 16, 2007, (which report expresses an unqualified opinion and includes an explanatory paragraph relating to the Company’s adoption of Statement of Financial Accounting Standard No. 123(R), Share-Based Payment) appearing on pages 17 through 36 of the Company’s 2006 Annual Report to Shareholders (which is attached to this Form 10-K) are incorporated by reference in this Form 10-K.

15

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A - 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 our 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 are 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.

Management’s Report on Internal Control over Financial Reporting - Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15-d-15(f) under the Securities Exchange Act of 1934. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United State of America (“GAAP”).

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Management has assessed the effectiveness of the Company’s internal control over financial reporting as of February 3, 2007, based on the criteria set forth by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission in their Internal Control-Integrated Framework. In making its assessment of internal control over financial reporting, management has concluded that the Company’s internal control over financial reporting was effective as of February 3, 2007.

The Company’s independent registered public accounting firm, Deloitte & Touche LLP, has audited management’s assessment of the Company’s internal control over financial reporting. Their report appears herein.

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 reasonable likely to materially affect, the Company's internal control over financial reporting.

16

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

The Buckle, Inc.

Kearney, Nebraska

We have audited management's assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that The Buckle, Inc. (the “Company”) maintained effective internal control over financial reporting as of February 3, 2007, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management's assessment and an opinion on the effectiveness of the Company's internal control over financial reporting based on our audit.

We have conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management's assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management's assessment that the Company maintained effective internal control over financial reporting as of February 3, 2007, is fairly stated, in all material respects, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also, in our opinion, the Company maintained effective internal control over financial reporting as of February 3, 2007, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the financial statements as of and for the year ended February 3, 2007 of the Company and our report dated April 16, 2007 expressed an unqualified opinion on those financial statements and included an explanatory paragraph relating to the Company’s adoption of Statement of Financial Accounting Standards No. 123(R), Share-Based Payment, in 2006.

/s/ Deloitte & Touche LLP

Omaha, Nebraska

April 16, 2007

17

ITEM 9B - OTHER INFORMATION

As required by Section 303A of the New York Stock Exchange’s Corporate Governance Standards, the Company’s Chief Executive Officer submitted a certification to the New York Stock Exchange in fiscal 2006 that he was not aware of any violation by the Company of the New York Stock Exchange’s Corporate Governance Standards as of the date of the certification, June 30, 2006.

PART III

ITEM 10 - DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The information required by this item appears under the captions "Executive Officers of the Company" appearing on page 10 of this report, and "Election of Directors" in the Company's Proxy Statement for its 2007 Annual Shareholders' Meeting and is incorporated by reference.

ITEM 11- EXECUTIVE COMPENSATION

Information required by this item appears under the following captions in the Company's Proxy Statement for its 2007 Annual Shareholders' Meeting and is incorporated by reference: “Executive Compensation and Other Information,” “Directors Compensation” (included under the “Election of Directors” section), and “Report of the Audit Committee,” including sub-captions “Option Grants in Last Fiscal Year,” “Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option Values,” “Employment Agreements,” and “Compensation Committee Interlocks and Insider Participation.”

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item appears under the captions "Election of Directors" in the Company's Proxy Statement for its 2007 Annual Shareholders' Meeting and in the Notes to Financial Statements under Footnote I on pages 32 to 34 in the Annual Report to Shareholders for fiscal 2006, and is incorporated by reference.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item appears under the caption "Compensation Committee Interlocks and Insider Participation" in the Company's Proxy for its 2007 Annual Shareholders' Meeting and is incorporated by reference.

ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information regarding the fees billed by our independent registered public accounting firm and the nature of services comprising the fees for each of the two most recent fiscal years is set forth under the caption “Ratification of Independent Accountants” in the Company’s Proxy Statement and is incorporated herein by reference.

PART IV

ITEM 15 - EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES

(a) (1) Financial Statements

The Company’s 2006 Annual Report to Shareholders, a copy of which appears as Exhibit 13 to this Form 10-K Report, contains the following on pages 17 through 36 and they are hereby incorporated by reference to this report:

Report of Independent Registered Public Accounting Firm

Balance Sheets as of February 3, 2007, and January 28, 2006

Statements of Income for each of the three years in the period ended February 3, 2007

Statements of Stockholders' Equity for each of the three years in the period ended February 3, 2007

Statements of Cash Flows for each of the three years in the period ended February 3, 2007

Notes to Financial Statements

(a) (2) Financial Statement Schedule

Report of Independent Registered Public Accounting Firm

Valuation and Qualifying Account. This schedule is on page 20.

All other schedules are omitted because they are not applicable or the required information is presented in the financial statements or notes thereto.

(b) Exhibits

See index to exhibits on pages 21 and 22.

18

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.
Date: April 19, 2007	By:	/s/ DENNIS H. NELSON
		Dennis H. Nelson, President and Chief Executive Officer

Date: April 19, 2007	By:	/s/ KAREN B. RHOADS
		Karen B. Rhoads, Vice President of Finance, Treasurer, and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities indicated on the 19^th day of April, 2007.

/s/ DANIEL J. HIRSCHFELD
Daniel J. Hirschfeld	Bill L. Fairfield
Chairman of the Board and Director	Director
/s/ DENNIS H. NELSON
Dennis H. Nelson	Ralph M. Tysdal
President and Chief Executive Officer	Director
and Director
/s/ KAREN B. RHOADS
Karen B. Rhoads	Bruce L. Hoberman
Vice President of Finance and	Director
Chief Financial Officer and Director
/s/ JAMES E. SHADA
James E. Shada	David A. Roehr
Executive Vice President of Sales and Director	Director
/s/ ROBERT E. CAMPBELL	/s/ JOHN P. PEETZ
Robert E. Campbell	John P. Peetz, III
Director	Director

19

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

The Buckle, Inc.

Kearney, Nebraska

We have audited the financial statements of The Buckle, Inc. (the “Company”) as of February 3, 2007 and January 28, 2006, and for each of the three fiscal years in the period ended February 3, 2007, management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of February 3, 2007 and the effectiveness of the Company’s internal control over financial reporting as of February 3, 2007 and have issued our reports thereon dated April 16, 2007 (which report expresses an unqualified opinion and includes an explanatory paragraph relating to the Company’s adoption of Statement of Financial Accounting Standards No. 123(R), Share-Based Payment as described in Note A) and have issued our reports thereon dated April 16, 2007; such financial statements and reports are included in your 2006 Annual Report to Stockholders and are incorporated herein by reference. Our audits also included the financial statement schedule of The Buckle, Inc. listed in Item 15(a)(2). This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ Deloitte & Touche LLP

Omaha, Nebraska

April 16, 2007

* * * * *

SCHEDULE II - Valuation and Qualifying Accounts and Reserves

	Allowance for Doubtful Accounts
Balance, January 31, 2004	$	181,000
Amounts charged to costs and expenses		379,281
Write-off of uncollectible accounts		(447,281	)
Balance January 29, 2005		113,000
Amounts charged to costs and expenses		319,377
Write-off of uncollectible accounts		(338,377	)
Balance, January 28, 2006		94,000
Amounts charged to costs and expenses		237,598
Write-off of uncollectible accounts		(259,598	)
Balance, February 3, 2007	$	72,000

20

INDEX TO EXHIBITS

		Exhibits	Page Number or Incorporation
			by Reference to
(3)	Articles of Incorporation and By-Laws.
	(3.1) Articles of Incorporation		Exhibit 3.1 to Form S-1
	of The Buckle, Inc. as amended		No. 33-46294
	(3.1.1)	Amendment to the Articles of
		Incorporation of The Buckle, Inc.
	(3.2)	By-Laws of The Buckle, Inc.	Exhibit 3.2 to Form S-1
			No. 33-46294
(4)	Instruments defining the rights of security
	holders, including indentures
	(4.1)	See Exhibits 3.1 and 3.2 for provisions
		of the Articles of Incorporation and
		By-laws of the Registrant defining rights
		of holders of Common Stock of the registrant
	(4.2)	Form of stock certificate for Common Stock	Exhibit 4.1 to Form S-1
			No. 33-46294
(9)	Not applicable
(10)	Material Contracts
	(10.1)	1991 Stock Incentive Plan	Exhibit 10.1 to Form S-1
			No. 33-46294
	(10.2)	1991 Non-Qualified Stock Option Plan	Exhibit 10.2 to Form S-1
			No. 33-46294
	(10.3)	Non-Qualified Stock Option Plan and	Exhibit 10.3 to Form S-1
		Agreement With Dennis Nelson	No. 33-46294
	(10.4)	Acknowledgment for Dennis H. Nelson
		dated March 27, 2007
	(10.5)	Acknowledgment for James E. Shada
		dated March 27, 2007
	(10.6)	Acknowledgment for Brett P. Milkie
		dated March 27, 2007
	(10.7)	Acknowledgment for Patricia K. Whisler
		dated March 27, 2007
	(10.8)	Acknowledgment for Kari G. Smith
		dated March 27, 2007
	(10.10)	Cash or Deferred Profit Sharing Plan	Exhibit 10.10 to Form S-1
			No. 33-46294
	(10.10.1)	Non-Qualified Deferred Compensation Plan
	(10.11)	Revolving Line of Credit Note and First
		Amendment to Credit Agreement, dated
		August 1, 2006 between The Buckle, Inc. and
		Wells Fargo Bank, N.A. for a $17.5 million
		line of credit

21

	(10.12)	Credit Agreement dated August 1, 2003	Exhibit 10.12 to Form 10-K
		between The Buckle, Inc. and Wells	filed for the fiscal year ended
		Fargo Bank, N.A, regarding $17.5 million	January 31, 2004
		line of credit for working capital and letters
		of credit.
	(10.17)	1993 Director Stock Option Plan	Exhibit A to Proxy Statement
			for Annual Meeting held
			May 26, 1993
	(10.23)	1997 Executive Stock Option Plan	Exhibit B to Proxy Statement
			for Annual Meeting held
			May 28, 1998
	(10.24)	1998 Restricted Stock Plan	Exhibit C to Proxy Statement
			for Annual Meeting held
			May 28, 1998
	(10.27)	2004 Management Incentive Plan	Exhibit A to Proxy Statement
			for Annual Meeting held
			May 28, 2004
	(10.28)	2005 Executive Incentive Plan	Exhibit A to Proxy Statement
			for Annual Meeting held
			June 2, 2005
(12)	Not applicable
(13)	2006 Annual Report to Stockholders
(18)	Not applicable
(19)	Not applicable
(22)	Not applicable
(23)	Consent of Deloitte & Touche LLP
(25)	Not applicable
(28)	Not applicable
(31a)	Certification Pursuant to 18 U.S.C.
	Section 1350, as Adopted Pursuant to
	Section 302 of the Sarbanes-Oxley Act of 2002.
(31b)	Certification Pursuant to 18 U.S.C.
	Section 1350, as Adopted Pursuant to
	Section 302 of the Sarbanes-Oxley Act of 2002.
(32)	Certifications Pursuant to 18 U.S.C.
	Section 1350, as Adopted Pursuant to
	Section 906 of the Sarbanes-Oxley Act of 2002.

22

EX-10.4

EXHIBIT 10.4

ACKNOWLEDGMENT

1. Dennis H. Nelson, currently employed by The Buckle, Inc. (“Company”) of Kearney, Nebraska, will be paid an annual salary of $835,000 for so long as the employee is employed by the Company during the fiscal year ending February 2, 2008.

2. In addition to the salary outlined in paragraph 1, above, a “Cash Award” for the above fiscal year will be paid to you provided you are employed by the Company on the last day of such fiscal year. The “Cash Award” will be paid as part of the Incentive Plan which includes a Bonus Pool as Cash Incentive for executives. This Bonus Pool will be calculated for the fiscal year based upon dollars of growth in key performance categories compared to the Base Year amounts, multiplied by the applicable percentage amounts as outlined in the Plan and multiplied by the net income factor outlined in the plan (see Exhibit A to the Company’s 2007 Proxy Statement). The applicable percentage amounts per the 2007 Executive Incentive Plan include 8.5% of the increase in Same Store Sales, 5.0% of the increase in Gross Profit and 15.0% of the increase in Pre-bonus Net Income. The Base Year amounts are determined using the immediately preceding fiscal year for Same Store Sales and the prior three-year rolling average, with the immediately preceding year receiving a 4:1 weighting over the other two years included in the calculation, for both Gross Profit and Pre-Bonus Net Income. Your percentage of the bonus pool has been pre-set for fiscal 2007 by the compensation committee of the Board of Directors.

No payment of a Cash Award for the year may be made until the Company's key performance categories for the year are certified by the Compensation Committee. You shall not be entitled to receive payment of a Cash Award unless you are still in the employ of (and shall not have delivered notice of resignation to) the Company on the last day of the fiscal year for which the Cash Award is earned.

The Cash Award will be paid on or before April 15 following the close of the fiscal year. For calculating this Cash Award, "Pre-Bonus Net Income" shall be defined as the Company's net income from operations after the deduction of all expenses, excluding administrative and store manager percentage bonuses and excluding income taxes, but including draws against such bonuses. Net income from operations does not include earnings on cash investments. For this purpose, net income shall be computed by the Company in accordance with the Company's normal accounting practices, and the Company's calculations will be final and conclusive.

3. You were awarded 50,000 shares of restricted stock in The Buckle, Inc. common stock pursuant to the 2005 Restricted Stock Plan as of February 4, 2007. Restricted stock granted under the Plan will vest according to the terms of the 2005 Restricted Stock Plan and the terms of the separate Restricted Stock Agreement between you and the Company, to which Agreement reference is hereby made. Those terms include a performance feature whereby one-half of the shares granted will vest over four years if a 5% increase in Pre-Bonus Net Income is achieved and the second one-half of the shares granted will vest over four years if an 8% increase in Pre-Bonus Net Income is achieved. If the performance goal is met, the shares will vest 20% upon certification by the compensation committee that such goal was met, and then 20% at January 31, 2009, 30% on January 30, 2010 and 30% on January 29, 2011. You must continue to be employed by the Company on the date of vesting. The foregoing description of the vesting features of the Restricted Stock granted to you is qualified in its entirety by reference to the terms of the 2005 Restricted Stock Plan and the separate Restricted Stock Agreement between you and the Company.

4. You will be given a vehicle allowance of $17,000 to be paid quarterly throughout the fiscal year. You are also allowed personal use of a corporate owned aircraft for up to 30 hours this fiscal year.

5. A credit limit of $3,500 has been established on your The Buckle charge account, subject to annual change as determined by management. Please make sure your charge account balance does not exceed this limit. You may have payments made to your charge account via payroll withholding during the year.

Management is committed to reviewing its policies continually. Accordingly, the statements outlined above are subject to review and change at any time, with or without notice.

I understand I have the right to terminate my employment with the Company at any time, with or without notice, and the Company retains the same right, with or without cause or notice. I recognize, therefore, that I am an "at will" employee.

This acknowledgment supersedes any prior acknowledgment or agreement with the Company. This acknowledgment does not constitute an agreement of employment with the Company.

March 27, 2007

The Buckle, Inc.

Acknowledged by:	/s/ DENNIS H. NELSON
	Dennis H. Nelson

EX-10.5

EXHIBIT 10.5

ACKNOWLEDGMENT

1. James E. Shada, currently employed by The Buckle, Inc. (“Company”) of Kearney, Nebraska, will be paid an annual salary of $475,000 for so long as the employee is employed by the Company during the fiscal year ending February 2, 2008.

2. In addition to the salary outlined in paragraph 1, above, a “Cash Award” for the above fiscal year will be paid to you provided you are employed by the Company on the last day of such fiscal year. The “Cash Award” will be paid as part of the Incentive Plan which includes a Bonus Pool as Cash Incentive for executives. This Bonus Pool will be calculated for the fiscal year based upon dollars of growth in key performance categories compared to the Base Year amounts, multiplied by the applicable percentage amounts as outlined in the Plan and multiplied by the net income factor outlined in the plan (see Exhibit A to the Company’s 2007 Proxy Statement). The applicable percentage amounts per the 2007 Executive Incentive Plan include 8.5% of the increase in Same Store Sales, 5.0% of the increase in Gross Profit and 15.0% of the increase in Pre-bonus Net Income. The Base Year amounts are determined using the immediately preceding fiscal year for Same Store Sales and the prior three-year rolling average, with the immediately preceding year receiving a 4:1 weighting over the other two years included in the calculation, for both Gross Profit and Pre-Bonus Net Income. Your percentage of the bonus pool has been pre-set for fiscal 2007 by the compensation committee of the Board of Directors.

No payment of a Cash Award for the year may be made until the Company's key performance categories for the year are certified by the Compensation Committee. You shall not be entitled to receive payment of a Cash Award unless you are still in the employ of (and shall not have delivered notice of resignation to) the Company on the last day of the fiscal year for which the Cash Award is earned.

The Cash Award will be paid on or before April 15 following the close of the fiscal year. For calculating this Cash Award, "Pre-Bonus Net Income" shall be defined as the Company's net income from operations after the deduction of all expenses, excluding administrative and store manager percentage bonuses and excluding income taxes, but including draws against such bonuses. Net income from operations does not include earnings on cash investments. For this purpose, net income shall be computed by the Company in accordance with the Company's normal accounting practices, and the Company's calculations will be final and conclusive.

3. You were awarded 17,000 shares of restricted stock in The Buckle, Inc. common stock pursuant to the 2005 Restricted Stock Plan as of February 4, 2007. Restricted stock granted under the Plan will vest according to the terms of the 2005 Restricted Stock Plan and the terms of the separate Restricted Stock Agreement between you and the Company, to which Agreement reference is hereby made. Those terms include a performance feature whereby one-half of the shares granted will vest over four years if a 5% increase in Pre-Bonus Net Income is achieved and the second one-half of the shares granted will vest over four years if an 8% increase in Pre-Bonus Net Income is achieved. If the performance goal is met, the shares will vest 20% upon certification by the compensation committee that such goal was met, and then 20% at January 31, 2009, 30% on January 30, 2010 and 30% on January 29, 2011. You must continue to be employed by the Company on the date of vesting. The foregoing description of the vesting features of the Restricted Stock granted to you is qualified in its entirety by reference to the terms of the 2005 Restricted Stock Plan and the separate Restricted Stock Agreement between you and the Company.

4. You will be given a vehicle allowance of $13,000 to be paid quarterly throughout the fiscal year. You are also allowed personal use of a corporate owned aircraft for up to 10 hours this fiscal year.

5. A credit limit of $3,500 has been established on your The Buckle charge account, subject to annual change as determined by management. Please make sure your charge account balance does not exceed this limit. You may have payments made to your charge account via payroll withholding during the year.

Management is committed to reviewing its policies continually. Accordingly, the statements outlined above are subject to review and change at any time, with or without notice.

I understand I have the right to terminate my employment with the Company at any time, with or without notice, and the Company retains the same right, with or without cause or notice. I recognize, therefore, that I am an "at will" employee.

This acknowledgment supersedes any prior acknowledgment or agreement with the Company. This acknowledgment does not constitute an agreement of employment with the Company.

March 27, 2007

The Buckle, Inc.

Acknowledged by:	/s/ JAMES E. SHADA
	James E. Shada

EX-10.6

EXHIBIT 10.6

ACKNOWLEDGMENT

1. Brett P. Milkie, currently employed by The Buckle, Inc. (“Company”) of Kearney, Nebraska, will be paid an annual salary of $282,000 for so long as the employee is employed by the Company during the fiscal year ending February 2, 2008.

2. In addition to the salary outlined in paragraph 1, above, a “Cash Award” for the above fiscal year will be paid to you provided you are employed by the Company on the last day of such fiscal year. The “Cash Award” will be paid as part of the Incentive Plan which includes a Bonus Pool as Cash Incentive for executives. This Bonus Pool will be calculated for the fiscal year based upon dollars of growth in key performance categories compared to the Base Year amounts, multiplied by the applicable percentage amounts as outlined in the Plan and multiplied by the net income factor outlined in the plan (see Exhibit A to the Company’s 2007 Proxy Statement). The applicable percentage amounts per the 2007 Executive Incentive Plan include 8.5% of the increase in Same Store Sales, 5.0% of the increase in Gross Profit and 15.0% of the increase in Pre-bonus Net Income. The Base Year amounts are determined using the immediately preceding fiscal year for Same Store Sales and the prior three-year rolling average, with the immediately preceding year receiving a 4:1 weighting over the other two years included in the calculation, for both Gross Profit and Pre-Bonus Net Income. Your percentage of the bonus pool has been pre-set for fiscal 2007 by the compensation committee of the Board of Directors.

No payment of a Cash Award for the year may be made until the Company's key performance categories for the year are certified by the Compensation Committee. You shall not be entitled to receive payment of a Cash Award unless you are still in the employ of (and shall not have delivered notice of resignation to) the Company on the last day of the fiscal year for which the Cash Award is earned.

The Cash Award will be paid on or before April 15 following the close of the fiscal year. For calculating this Cash Award, "Pre-Bonus Net Income" shall be defined as the Company's net income from operations after the deduction of all expenses, excluding administrative and store manager percentage bonuses and excluding income taxes, but including draws against such bonuses. Net income from operations does not include earnings on cash investments. For this purpose, net income shall be computed by the Company in accordance with the Company's normal accounting practices, and the Company's calculations will be final and conclusive.

3. You were awarded 8,250 shares of restricted stock in The Buckle, Inc. common stock pursuant to the 2005 Restricted Stock Plan as of February 4, 2007. Restricted stock granted under the Plan will vest according to the terms of the 2005 Restricted Stock Plan and the terms of the separate Restricted Stock Agreement between you and the Company, to which Agreement reference is hereby made. Those terms include a performance feature whereby one-half of the shares granted will vest over four years if a 5% increase in Pre-Bonus Net Income is achieved and the second one-half of the shares granted will vest over four years if an 8% increase in Pre-Bonus Net Income is achieved. If the performance goal is met, the shares will vest 20% upon certification by the compensation committee that such goal was met, and then 20% at January 31, 2009, 30% on January 30, 2010 and 30% on January 29, 2011. You must continue to be employed by the Company on the date of vesting. The foregoing description of the vesting features of the Restricted Stock granted to you is qualified in its entirety by reference to the terms of the 2005 Restricted Stock Plan and the separate Restricted Stock Agreement between you and the Company.

4. A credit limit of $3,500 has been established on your The Buckle charge account, subject to annual change as determined by management. Please make sure your charge account balance does not exceed this limit. You may have payments made to your charge account via payroll withholding during the year.

Management is committed to reviewing its policies continually. Accordingly, the statements outlined above are subject to review and change at any time, with or without notice.

I understand I have the right to terminate my employment with the Company at any time, with or without notice, and the Company retains the same right, with or without cause or notice. I recognize, therefore, that I am an "at will" employee.

This acknowledgment supersedes any prior acknowledgment or agreement with the Company. This acknowledgment does not constitute an agreement of employment with the Company.

March 27, 2007

The Buckle, Inc.

Acknowledged by:	/s/ BRETT P. MILKIE
	Brett P. Milkie

EX-10.7

EXHIBIT 10.7

ACKNOWLEDGMENT

1. Patricia K. Whisler, currently employed by The Buckle, Inc. (“Company”) of Kearney, Nebraska, will be paid an annual salary of $297,000 for so long as the employee is employed by the Company during the fiscal year ending February 2, 2008.

2. In addition to the salary outlined in paragraph 1, above, a “Cash Award” for the above fiscal year will be paid to you provided you are employed by the Company on the last day of such fiscal year. The “Cash Award” will be paid as part of the Incentive Plan which includes a Bonus Pool as Cash Incentive for executives. This Bonus Pool will be calculated for the fiscal year based upon dollars of growth in key performance categories compared to the Base Year amounts, multiplied by the applicable percentage amounts as outlined in the Plan and multiplied by the net income factor outlined in the plan (see Exhibit A to the Company’s 2007 Proxy Statement). The applicable percentage amounts per the 2007 Executive Incentive Plan include 8.5% of the increase in Same Store Sales, 5.0% of the increase in Gross Profit and 15.0% of the increase in Pre-bonus Net Income. The Base Year amounts are determined using the immediately preceding fiscal year for Same Store Sales and the prior three-year rolling average, with the immediately preceding year receiving a 4:1 weighting over the other two years included in the calculation, for both Gross Profit and Pre-Bonus Net Income. Your percentage of the bonus pool has been pre-set for fiscal 2007 by the compensation committee of the Board of Directors.

No payment of a Cash Award for the year may be made until the Company's key performance categories for the year are certified by the Compensation Committee. You shall not be entitled to receive payment of a Cash Award unless you are still in the employ of (and shall not have delivered notice of resignation to) the Company on the last day of the fiscal year for which the Cash Award is earned.

The Cash Award will be paid on or before April 15 following the close of the fiscal year. For calculating this Cash Award, "Pre-Bonus Net Income" shall be defined as the Company's net income from operations after the deduction of all expenses, excluding administrative and store manager percentage bonuses and excluding income taxes, but including draws against such bonuses. Net income from operations does not include earnings on cash investments. For this purpose, net income shall be computed by the Company in accordance with the Company's normal accounting practices, and the Company's calculations will be final and conclusive.

3. You were awarded 8,250 shares of restricted stock in The Buckle, Inc. common stock pursuant to the 2005 Restricted Stock Plan as of February 4, 2007. Restricted stock granted under the Plan will vest according to the terms of the 2005 Restricted Stock Plan and the terms of the separate Restricted Stock Agreement between you and the Company, to which Agreement reference is hereby made. Those terms include a performance feature whereby one-half of the shares granted will vest over four years if a 5% increase in Pre-Bonus Net Income is achieved and the second one-half of the shares granted will vest over four years if an 8% increase in Pre-Bonus Net Income is achieved. If the performance goal is met, the shares will vest 20% upon certification by the compensation committee that such goal was met, and then 20% at January 31, 2009, 30% on January 30, 2010 and 30% on January 29, 2011. You must continue to be employed by the Company on the date of vesting. The foregoing description of the vesting features of the Restricted Stock granted to you is qualified in its entirety by reference to the terms of the 2005 Restricted Stock Plan and the separate Restricted Stock Agreement between you and the Company.

4. A credit limit of $3,500 has been established on your The Buckle charge account, subject to annual change as determined by management. Please make sure your charge account balance does not exceed this limit. You may have payments made to your charge account via payroll withholding during the year.

Management is committed to reviewing its policies continually. Accordingly, the statements outlined above are subject to review and change at any time, with or without notice.

I understand I have the right to terminate my employment with the Company at any time, with or without notice, and the Company retains the same right, with or without cause or notice. I recognize, therefore, that I am an "at will" employee.

This acknowledgment supersedes any prior acknowledgment or agreement with the Company. This acknowledgment does not constitute an agreement of employment with the Company.

March 27, 2007

The Buckle, Inc.

Acknowledged by:	/s/ PATRICIA K. WHISLER
	Patricia K. Whisler

EX-10.8

EXHIBIT 10.8

ACKNOWLEDGMENT

1. Kari G. Smith, currently employed by The Buckle, Inc. (“Company”) of Kearney, Nebraska, will be paid an annual salary of $273,000 for so long as the employee is employed by the Company during the fiscal year ending February 2, 2008.

2. In addition to the salary outlined in paragraph 1, above, a “Cash Award” for the above fiscal year will be paid to you provided you are employed by the Company on the last day of such fiscal year. The “Cash Award” will be paid as part of the Incentive Plan which includes a Bonus Pool as Cash Incentive for executives. This Bonus Pool will be calculated for the fiscal year based upon dollars of growth in key performance categories compared to the Base Year amounts, multiplied by the applicable percentage amounts as outlined in the Plan and multiplied by the net income factor outlined in the plan (see Exhibit A to the Company’s 2007 Proxy Statement). The applicable percentage amounts per the 2007 Executive Incentive Plan include 8.5% of the increase in Same Store Sales, 5.0% of the increase in Gross Profit and 15.0% of the increase in Pre-bonus Net Income. The Base Year amounts are determined using the immediately preceding fiscal year for Same Store Sales and the prior three-year rolling average, with the immediately preceding year receiving a 4:1 weighting over the other two years included in the calculation, for both Gross Profit and Pre-Bonus Net Income. Your percentage of the bonus pool has been pre-set for fiscal 2007 by the compensation committee of the Board of Directors.

No payment of a Cash Award for the year may be made until the Company's key performance categories for the year are certified by the Compensation Committee. You shall not be entitled to receive payment of a Cash Award unless you are still in the employ of (and shall not have delivered notice of resignation to) the Company on the last day of the fiscal year for which the Cash Award is earned.

The Cash Award will be paid on or before April 15 following the close of the fiscal year. For calculating this Cash Award, "Pre-Bonus Net Income" shall be defined as the Company's net income from operations after the deduction of all expenses, excluding administrative and store manager percentage bonuses and excluding income taxes, but including draws against such bonuses. Net income from operations does not include earnings on cash investments. For this purpose, net income shall be computed by the Company in accordance with the Company's normal accounting practices, and the Company's calculations will be final and conclusive.

3. You were awarded 8,250 shares of restricted stock in The Buckle, Inc. common stock pursuant to the 2005 Restricted Stock Plan as of February 4, 2007. Restricted stock granted under the Plan will vest according to the terms of the 2005 Restricted Stock Plan and the terms of the separate Restricted Stock Agreement between you and the Company, to which Agreement reference is hereby made. Those terms include a performance feature whereby one-half of the shares granted will vest over four years if a 5% increase in Pre-Bonus Net Income is achieved and the second one-half of the shares granted will vest over four years if an 8% increase in Pre-Bonus Net Income is achieved. If the performance goal is met, the shares will vest 20% upon certification by the compensation committee that such goal was met, and then 20% at January 31, 2009, 30% on January 30, 2010 and 30% on January 29, 2011. You must continue to be employed by the Company on the date of vesting. The foregoing description of the vesting features of the Restricted Stock granted to you is qualified in its entirety by reference to the terms of the 2005 Restricted Stock Plan and the separate Restricted Stock Agreement between you and the Company.

4. A credit limit of $3,500 has been established on your The Buckle charge account, subject to annual change as determined by management. Please make sure your charge account balance does not exceed this limit. You may have payments made to your charge account via payroll withholding during the year.

Management is committed to reviewing its policies continually. Accordingly, the statements outlined above are subject to review and change at any time, with or without notice.

I understand I have the right to terminate my employment with the Company at any time, with or without notice, and the Company retains the same right, with or without cause or notice. I recognize, therefore, that I am an "at will" employee.

This acknowledgment supersedes any prior acknowledgment or agreement with the Company. This acknowledgment does not constitute an agreement of employment with the Company.

March 27, 2007

The Buckle, Inc.

Acknowledged by:	/s/ KARI G. SMITH
	Kari G. Smith

EX-10.11

EXHIBIT 10.11

WELLS FARGO	REVOLVING LINE OF CREDIT NOTE
$17,500,000.00	Lincoln, Nebraska
	August 1, 2006

FOR VALUE RECEIVED, the undersigned THE BUCKLE, INC. ("Borrower") promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") at its office at Nebraska RCBO - Lincoln, 1248 0 Street, 3rd Floor, Lincoln, NE 68508, or at such other place as the holder hereof may designate, in lawful money of the United States of America and in immediately available funds, the principal sum of $17,500,000.00, or so much thereof as may be advanced and be outstanding, with interest thereon, to be computed on each advance from the date of its disbursement as set forth herein.

1. INTEREST:

1.1 Interest. The outstanding principal balance of this Note shall bear interest (computed on the basis of a 360-day year, actual days elapsed) at a rate per annum equal to the Prime Rate in effect from time to time. The term "Prime Rate" means at any time the rate of interest most recently announced within Bank at its principal office as its Prime Rate, with the understanding that the Prime Rate is one of Bank's base rates and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto, and is evidenced by the recording thereof after its announcement in such internal publication or publications as Bank may designate. Each change in the rate of interest hereunder shall become effective on the date each Prime Rate change is announced within Bank.

1.2 Payment of Interest. Interest accrued on this Note shall be payable on the last day of each month, commencing August 31, 2006.

1.3 Default Interest. From and after the maturity date of this Note, or such earlier date as all principal owing hereunder becomes due and payable by acceleration or otherwise, the outstanding principal balance of this Note shall bear interest until paid in full at an increased rate per annum (computed on the basis of a 360-day year, actual days elapsed) equal to 4% above the rate of interest from time to time applicable to this Note.

2. BORROWING AND REPAYMENT:

2.1 Borrowing and Repayment. Borrower may from time to time during the term of this Note borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and conditions of this Note and of the Credit Agreement between Borrower and Bank defined below; provided however, that the total outstanding borrowings under this Note shall not at any time exceed the principal amount stated above. The unpaid principal balance of this obligation at any time shall be the total amounts advanced hereunder by the holder hereof less the amount of principal payments made hereon by or for Borrower, which balance may be endorsed hereon from time to time by the holder. The outstanding principal balance of this Note shall be due and payable in full on July 31, 2009.

2.2 Advances. Advances hereunder, to the total amount of the principal sum available hereunder, may be made by the holder at the oral or written request of (a) Dennis H. Nelson, Karen B Rhoads, anyone acting alone, who are authorized to request advances and direct the disposition of any advances until written notice of the revocation of such authority is received by the holder at the office designated above, or (b) any person, with respect to advances deposited to the credit of any deposit account of Borrower, which advances, when so deposited, shall be conclusively presumed to have been made to or for the benefit of Borrower regardless of the fact that persons other than those authorized to request advances may have authority to draw against such account. The holder shall have no obligation to determine whether any person requesting an advance is or has been authorized by Borrower.

2.3 Application of Payments. Each payment made on this Note shall be credited first, to any interest then due and second, to the outstanding principal balance hereof.

3. EVENTS OF DEFAULT:

This Note is made pursuant to and is subject to the terms and conditions of that certain Credit Agreement between Borrower and Bank dated as of August1, 2003, as amended from time to time (the "Credit Agreement"). Any default in the payment or performance of any obligation under this Note, or any defined event of default under the Credit Agreement, shall constitute an "Event of Default" under this Note.

4. MISCELLANEOUS:

4.1 Remedies. Upon the occurrence of any Event of Default, the holder of this Note, at the holder's option, may declare all sums of principal and interest outstanding hereunder to be immediately due and payable without presentment, demand, notice of nonperformance, notice of protest, protest or notice of dishonor, all of which are expressly waived by Borrower, and the obligation, if any, of the holder to extend any further credit hereunder shall immediately cease and terminate. Borrower shall pay to the holder immediately upon demand the full amount of all payments, advances, charges, costs and expenses, including reasonable attorneys' fees (to include outside counsel fees and all allocated costs of the holder's in-house counsel), expended or incurred by the holder in connection with the enforcement of the holder's rights and/or the collection of any amounts which become due to the holder under this Note, and the prosecution or defense of any action in any way related to this Note, including without limitation, any action for declaratory relief, whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise, and including any of the foregoing incurred in connection with any bankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or motion brought by Bank or any other person) relating to Borrower or any other person or entity.

4.2 Obligations Joint and Several. Should more than one person or entity sign this Note as a Borrower, the obligations of each such Borrower shall be joint and several.

4.3 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Nebraska.

IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first written above.

The Buckle, Inc.

By:	/s/ DENNIS H. NELSON
	Dennis H. Nelson ,President / CEO

FIRST AMENDMENT TO CREDIT AGREEMENT

THIS AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered into as of August 1, 2006, by and between THE BUCKLE, INC., a Nebraska corporation ("Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank").

RECITALS

WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and conditions of that certain Credit Agreement between Borrower and Bank dated as of August 1, 2003, as amended from time to time ("Credit Agreement").

WHEREAS, Bank and Borrower have agreed to certain changes in the terms and conditions set forth in the Credit Agreement and have agreed to amend the Credit Agreement to reflect said changes.

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:

1. Section 1.1 (a) is hereby amended by deleting "July 31, 2006" as the last day on which Bank will make advances under the Line of Credit, and by substituting for said date "July 31, 2009," with such change to be effective upon the execution and delivery to Bank of a promissory note dated as of August 1, 2006 (which promissory note shall replace and be deemed the Revolving Line of Credit Note defined in and made pursuant to the Credit Agreement) and all other contracts, instruments and documents required by Bank to evidence such change.

2.  Section 4.9 (a) is hereby deleted in its entirety, and the following substituted therefor:

"(a) Tangible Net Worth not at any time less than $250,000,000.00 increasing by 50% of net profit after taxes and dividends in each subsequent year to be measured at fiscal year end, with "Tangible Net Worth" defined as the aggregate of total stockholders' equity plus subordinated debt less any intangible assets."

3. Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver or modification. All terms defined in the Credit Agreement shall have the same meaning when used in this Amendment. This Amendment and the Credit Agreement shall be read together, as one document.

4. Borrower hereby remakes all representations and warranties contained in the Credit Agreement and reaffirms all covenants set forth therein. Borrower further certifies that as of the date of this Amendment there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default.

A CREDIT AGREEMENT MUST BE IN WRITING TO BE ENFORCEABLE UNDER NEBRASKA LAW. TO PROTECT THE PARTIES FROM ANY MISUNDERSTANDINGS OR DISAPPOINTMENTS, ANY CONTRACT, PROMISE, UNDERTAKING OR OFFER TO FOREBEAR REPAYMENT OF MONEY OR TO MAKE ANY OTHER FINANCIAL ACCOMMODATION IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF CREDIT, OR ANY AMENDMENT OF, CANCELLATION OF, WAIVER OF, OR SUBSTITUTION FOR ANY OR ALL OF THE TERMS OR PROVISIONS OF ANY INSTRUMENT OR DOCUMENT EXECUTED IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF CREDIT, MUST BE IN WRITING TO BE EFFECTIVE.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day and year first written above.

THE BUCKLE, INC.		WELLS FARGO BANK N.A.
By:	/s/ DENNIS H. NELSON	By:	/s/ MONICA BALTERS
	Dennis H. Nelson, President/CEO		Monica Balters, Relationship Manager

EX-13

Dear Shareholders:

Fiscal 2006 represented another excellent year for the Company as we achieved record sales of $530.1 million—an increase of 5.8% over fiscal 2005—and increased earnings per share to $1.86 per diluted share, up from $1.69 in fiscal 2005.

By almost every measure, fiscal 2006 was an outstanding year for Buckle. In addition to generating positive financial results, we delivered strong returns to our shareholders. During the year, we returned more than $90 million to our shareholders by repurchasing 654,300 split-adjusted shares at an average price of $24.52, twice increasing our quarterly dividend rate, and paying a $3.00 per share special cash dividend before the 3-for-2 stock split on January 12, 2007. We also ended the year with a strong balance sheet including cash and investments of $183.4 million, stockholders’ equity of $286.6 million, and no long-term debt.

Our success during the year was driven by our continued commitment to providing our guests with the most enjoyable shopping experience possible. We accomplished this by providing a unique selection of compelling merchandise and an exceptional level of customer service. Here are a few highlights:

2006 Highlights

· Average sales per store were $1.49 million, compared with $1.47 million in fiscal 2005

· Average sales per square foot were $302, up from $298 in fiscal 2005

· Denim sales increased for the seventh consecutive year, bringing the category to approximately 45% of our fiscal 2006 net sales

· Gross margin improved as a percentage of net sales for the fourth consecutive year, rising to 39.1% in fiscal 2006 from 38.7% in fiscal 2005

· Average transaction value increased 7% to $79 and average price point increased 5% to $40.50

Denim remains the foundation of our business and fiscal 2006 proved to be another strong year for our denim brands, which include BKE, Lucky Brand, Silver, Big Star, and Guess. To uphold our reputation as a denim destination, we continually test-market and add new brands to our merchandise mix. To that end, in 2006 we tested several new denim brands including MEK and Miss Me. We also added Elements and Volcom to our strong array of current brands that include Hurley, Quiksilver, Roxy, Affliction, OBEY, Billabong, 7 Diamonds, and Fossil.

Our real estate expansion strategy is a disciplined one that is driven by careful site selection as well as the availability of an internal leader to successfully manage in a particular market. As we continue to add new stores, we look for prime locations in regional malls and lifestyle shopping centers in trade areas with populations of at least 300,000. In fiscal 2006, we opened 17 new stores, including 4 in Florida and 3 in California, and completed 10 substantial remodels (as well as several smaller remodels). We expect to open 20 new stores in fiscal 2007, including 5 in Florida, 2 in Texas, 2 in Washington, and 2 in Arizona, and complete 7-8 substantial remodels.

Much of our success is predicated on the talent and dedication of our people. Our merchandising team continues to find, create, and deliver what our guests want—fresh, unique, and on-trend merchandise. Our sales teams provide our guests with outstanding, individualized service that complements our merchandise and enhances the overall value of the shopping experience. Supporting these efforts are our teammates in the home office who are committed to providing a high level of service to our stores and our guests.

I would like to take this opportunity to thank our guests, vendors, and shareholders for your continued loyalty and support. And to our 6,000+ teammates across 38 states who helped make 2006 a successful year, I thank you for your continued hard work and dedication. It is a pleasure to work with such an extraordinary team.

Each and every day, you remain committed to what we do best—providing our guests with merchandise that they enjoy, outstanding service that they appreciate, and a depth of experience that distinguishes us in the marketplace.   We are proud of what we achieved in 2006, and we are excited to build on our accomplishments as we move forward—inspiring our teammates, delighting our guests, and rewarding our shareholders in the years to come.  

 

Dennis H. Nelson

President and Chief Executive Officer

Financial Highlights

(Dollar Amounts in Thousands, Except Per Share Amounts and Selected Operating Data)

	February 3,			January 28,			January 29,
	2007 (a)			2006			2005
INCOME STATEMENT DATA
Net sales	$	530,074		$	501,101		$	470,937
Income before income taxes	$	88,053		$	82,445		$	67,842
Provision for income taxes	$	32,327		$	30,539		$	24,613
Net income	$	55,726		$	51,906		$	43,229
Diluted earnings per share	$	1.86		$	1.69		$	1.29
Net income as a percentage of net sales		10.5	%		10.4	%		9.2	%
BALANCE SHEET DATA
Working capital	$	189,017		$	193,428		$	219,231
Total assets	$	368,198		$	374,266		$	405,543
Long-term debt		-			-			-
Stockholders’ equity	$	286,587		$	299,793		$	332,928
SELECTED OPERATING DATA
Number of stores open at year end		350			338			327
Average sales per square foot	$	302		$	298		$	291
Average sales per store (000’s)	$	1,493		$	1,474		$	1,454
Comparable store sales change		0.0	%		1.4	%		6.3	%

(a) Consists of 53 weeks.

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Proving that it’s a place where you can build a career, Buckle’s district managers have been with the Company an average of 20 years.

Exceptional service that makes each guest feel special. That’s what we strive to provide and it’s our people who make it happen. Instilled in our team is the idea that doing your best is not just something you say, it’s something you do each and every day. Our teammates are still as committed to serving our guests today as they were when our Company was established nearly 40 years ago.

Given our values, it’s no surprise that Buckle has a performance-based culture. We give our managers the tools and freedom to be successful, encourage them to be innovative, and then reward them for their achievements. The rationale behind this approach is simple: when our leaders have a personal stake in the business, they are driven to do their best. It’s what has helped us maintain a team of talented individuals who possess a strong work ethic and are passionate about what they do.

At Buckle, we also believe that there’s no substitute for on-the-job experience. That’s why we promote store managers from within—resulting in consistent performance and a depth of expertise that makes us unique. To help our leaders stay on top of their game, we invest in their education and development by hosting three company-wide manager meetings and several smaller career meetings throughout the year. By providing leaders with up-to-date information on the latest fashion trends and merchandising strategies, as well as new ideas for recruiting and developing their teams, we are able to maintain our high standard of product knowledge and service.

As we continue to expand, having a strong leadership team that can support our growth is increasingly important. With that in mind, we continue to enhance our campus recruiting and management development programs so that we can hire the best talent possible—individuals who are committed to our ideals and have the ability to become our future leaders.

“I am writing to let you know that your Spokane Valley Mall store is the best-run  retail store I have ever visited. Since I started shopping there several months ago, I  have been back at least a dozen times and each time I receive customer service  that goes ‘above and beyond.’ The staff is knowledgeable about the products  and they always find exactly what I want. No matter who helps me, I always  receive the highest level of service. Thank you.” 

Buckle Guest

Spokane, Washington

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 product

Strengthening our reputation as a denim destination, in 2006 we grew denim sales for the seventh consecutive year, bringing the category to approximately 45% of our fiscal 2006 net sales.

Strong brands, on-trend products, and unparalleled selection continue to define Buckle's approach to merchandising. Our philosophy has been to continually provide our stores with the best selection of brands, styles, fits, details, and price points. This approach differentiates us in that guests who walk into our stores can expect to walk out with a look that's as unique as they are.

We collaborate with some of the most recognizable brands in the apparel industry to create compelling merchandise—much of which is exclusive to Buckle. To maintain our edge, our buyers continually seek out fresh, innovative brands that add newness and excitement to our merchandise mix.

While we carry a full range of apparel, footwear, and accessories, it's our expertise in denim that makes us the store of choice for guests who seek a great-fitting pair of jeans. At Buckle, guests can find their favorites by selecting from a wide selection of fits, styles, and finishes from a powerhouse of brands including BKE, Lucky Brand, Silver Jeans, Big Star, Guess, and Miss Me.

BKE, our private label brand, represents a growing and important component of our merchandise mix. Reflecting our high standards, BKE offers distinctive details and styling that have helped to cultivate a loyal following amongst our guests. For fiscal 2006, BKE accounted for approximately 45% of our denim sales and we see continued opportunities for growth in the brand.

Proving that shopping at Buckle is an enjoyable experience for both men and women, guys' merchandise represented 44% of fiscal 2006 net sales and gals' merchandise represented 56%. Our average retail price points for the year increased to approximately $42.50 for guys and $40.25 for gals.

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Whether guests choose to shop in one of our 350 retail locations or online at buckle.com, they can count on receiving reliable, friendly service that transcends the traditional.

To ensure that we provide the most enjoyable shopping experience possible, Buckle continuously invests in the enhancement of our store environment. Featuring warm wood tones and brick and corrugated metal accents, our signature store design was displayed in 125 of our 350 retail locations as of February 3, 2007. In addition, we continue to roll out new fixtures and tables to all of our stores. This helps maximize the impact of our merchandise and encourages guests to experience the special details that set our merchandise apart—from the unique stitching and pocket detail on a pair of jeans to the soft, combed cotton and exposed seams of a graphic tee.

We continued to expand our presence by opening 17 new stores in 2006—including 4 in Florida and 3 in California. We also completed 10 substantial remodels during the fiscal year (as well as several smaller remodels). In 2007, we plan to open 20 new stores—including 5 in Florida, 2 in Texas, 2 in Washington, and 2 in Arizona—and complete 7-8 substantial remodels.

Our online store—buckle.com—remains a valuable complement to our brick and mortar stores. To accommodate our growing online business, we proudly launched a completely redesigned buckle.com in October 2006. The new site offers several new features including expanded product search capabilities that make it easier for guests to find their favorites.

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Selected Financial Data

(Amounts in Thousands Except Share, Per Share Amounts, and Selected Operating Data) 

	Fiscal Years Ended
	February 3, 2007 (d)			January 28, 2006			January 29, 2005			January 31, 2004			February 1, 2003
Income Statement Data
Net sales	$	530,074		$	501,101		$	470,937		$	422,820		$	401,060
Cost of sales (including buying, distribution, and occupancy costs)	$	322,760		$	307,063		$	299,958		$	280,004		$	269,516
Gross profit		207,314			194,038			170,979			142,816			131,544
Selling expenses		107,592			100,148			89,008			79,668			74,754
General & administrative expenses		20,701			17,568			18,599			15,045			10,979
Income from operations		79,021			76,322			63,372			48,103			45,811
Other income, net		9,032			6,123			4,470			4,688			4,698
Income before income taxes		88,053			82,445			67,842			52,791			50,509
Provision for income taxes		32,327			30,539			24,613			19,112			18,434
Net income	$	55,726		$	51,906		$	43,229		$	33,679		$	32,075
Basic earnings per share	$	1.93		$	1.76		$	1.34		$	1.07		$	1.01
Diluted earnings per share	$	1.86		$	1.69		$	1.29		$	1.04		$	0.98
Dividends declared per share (a)	$	2.49		$	0.41		$	0.29		$	0.13		$	0.00
Selected Operating Data
Stores open at end of period		350			338			327			316			304
Average sales per square foot	$	302		$	298		$	291		$	274		$	274
Average sales per store (000’s)	$	1,493		$	1,474		$	1,454		$	1,350		$	1,334
Comparable store sales change (b)		0.0	%		1.4	%		6.3	%		1.1	%		-0.5	%
Balance Sheet Data (c)
Working capital	$	189,017		$	193,428		$	219,231		$	174,188		$	142,840
Long-term investments	$	31,958		$	41,654		$	54,395		$	59,137		$	56,248
Total assets	$	368,198		$	374,266		$	405,543		$	356,222		$	318,011
Long-term debt		-			-			-			-			-
Stockholders’ equity	$	286,587		$	299,793		$	332,928		$	293,845		$	261,027

(a) The Company declared and paid its first ever quarterly cash dividends of $.0667 per share in both the third and fourth quarters of fiscal 2003. Cash dividends of $.0667 per share were paid in the first and second quarters of fiscal 2004 and $.08 per share in the third and fourth quarters of fiscal 2004. For fiscal 2005, the Company paid cash dividends of $.08 per share in the first quarter, $.10 per share in the second quarter, and $.1133 per share in the third and fourth quarters. The Company continued the $.1133 per share cash dividends in the first and second quarters of fiscal 2006, while in the third quarter of fiscal 2006, it paid cash dividends of $.1333 per share and, in the fourth quarter of fiscal 2006, $.20 per share. In addition, the Company paid a special one-time cash dividend of$2.00 per share in the fourth quarter of fiscal 2006. The dividend amounts have been adjusted to reflect the Company’s 3-for-2 stock split in January 2007.

(b) Stores are deemed to be comparable stores if they were open in the prior year on the first day of the fiscal period 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.

(c) At the end of the period.

 (d) Consists of 53 weeks.

 

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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 incorporated by reference in this Form 10-K. 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 incorporated by reference in Form 10-K.

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.

Net 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.

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Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Results of Operations

The following table sets forth certain financial data expressed as a percentage of net sales and the percentage change in the dollar amount of such items compared to the prior period.

	Percentage of Net Sales For Fiscal Years Ended									Percentage Increase (Decrease)
										Fiscal Year
	February 3, 2007			January 28, 2006			January 29, 2005			2005 to 2006			2004 to 2005
Income Statement Data
Net sales		100.0	%		100.0	%		100.0	%		5.8	%		6.4	%
Cost of sales (including
buying, distribution,
and occupancy costs)		60.9	%		61.3	%		63.7	%		5.1	%		2.4	%
Gross profit		39.1	%		38.7	%		36.3	%		6.8	%		13.5	%
Selling expenses		20.3	%		20.0	%		18.9	%		7.4	%		12.5	%
General and administrative
expenses		3.9	%		3.5	%		3.9	%		17.8	%		(5.5	)%
Income from operations		14.9	%		15.2	%		13.5	%		3.5	%		20.4	%
Other income		1.7	%		1.3	%		0.9	%		47.5	%		37.0	%
Income before income taxes		16.6	%		16.5	%		14.4	%		6.8	%		21.5	%
Provision for income taxes		6.1	%		6.1	%		5.2	%		5.9	%		24.1	%
Net income		10.5	%		10.4	%		9.2	%		7.4	%		20.1	%

Fiscal 2006 Compared to Fiscal 2005

Fiscal 2006 net sales, for the 53-week period ended February 3, 2007, increased 5.8 percent to $530.1 million from net sales of $501.1 million for the 52-week fiscal year ended January 28, 2006. Comparable store net sales for the fiscal year were flat in comparison to the same 53-week period last year. The comparable store sales performance was driven by a decrease in the number of transactions at comparable stores during the year, which was offset by a 5.1% increase in the average retail price per piece of merchandise sold during the period and a 2.5% increase in the average number of units sold per transaction. Growth in net sales for the fiscal year was, therefore, attributable to the inclusion of a full year of operating results for the 15 new stores opened during fiscal 2005, to the opening of 17 new stores during fiscal 2006, to growth in online sales, and to the inclusion of an extra week of sales due to the fact that fiscal 2006 was a 53-week year.

The Company’s average retail price per piece of merchandise sold increased $1.95, or 5.1%, in fiscal 2006 compared to fiscal 2005. This $1.95 increase in the average price per piece was primarily attributable to the following changes (with their corresponding effect on the overall average price per piece): a 5.8% increase in average denim price points ($1.00), a 5.7% increase in average knit shirt price points ($0.47), a 14.8% increase in average woven shirt price points ($0.30), a 3.2% increase in average accessories price points ($0.12), and a 5.3% increase in average sweater price points ($0.08). These increases were partially offset by reduced average price points in certain other categories ($0.02). These changes are primarily a reflection of merchandise shifts in terms of brands and product styles, fabrics, details, and finishes. Average sales per square foot for fiscal 2006 increased 1.1% from $298 to $302.

Gross profit after buying, distribution, and occupancy costs increased $13.3 million in fiscal 2006 to $207.3 million, a 6.8% increase. As a percentage of net sales, gross profit increased from 38.7% in fiscal 2005 to 39.1% in fiscal 2006. The increase was primarily attributable to a 0.6% improvement, as a percentage of net sales, in actual merchandise margins, achieved through timely sell-throughs on new product and a slight increase in sales of private label merchandise, which achieves a higher margin due to greater initial mark-up. This improvement was partially offset by increases in occupancy and distribution costs (0.2%, as a percentage of net sales). Merchandise shrinkage increased from 0.6% in fiscal 2005 to 0.7% in fiscal 2006.

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Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Selling expenses increased from $100.1 million for fiscal 2005 to $107.6 million for fiscal 2006, a 7.4% increase. Selling expenses as a percentage of net sales increased from 20.0% for fiscal 2005 to 20.3% for fiscal 2006. The increase was primarily attributable to increases in stock option compensation expense as a result of FASB Statement No. 123 (revised 2004) (“SFAS 123(R)”), “Share-Based Payment,” adoption during fiscal 2006 (0.3%, as a percentage of net sales), internet-related fulfillment and marketing expenses (0.2%, as a percentage of net sales), and bankcard fees as a result of an increase in the percentage of sales tendered in bankcards (0.1%, as a percentage of net sales). These increases were partially offset by a 0.3% reduction, as a percentage of net sales, in expense related to the incentive bonus accrual.

General and administrative expenses increased from $17.6 million in fiscal 2005 to $20.7 million in fiscal 2006, a 17.8% increase. As a percentage of net sales, general and administrative expenses increased from 3.5% for fiscal 2005 to 3.9% for fiscal 2006. The increase was primarily attributable to increases in non-vested stock compensation expense (0.4%, as a percentage of net sales), stock option compensation expense as a result of SFAS 123(R) adoption during fiscal 2006 (0.1%, as a percentage of net sales), and certain other general and administrative expenses (0.1%, as a percentage of net sales). These increases were partially offset by a 0.1% reduction, as a percentage of net sales, in expense related to the incentive bonus accrual and a 0.1% reduction, as a percentage of net sales, in corporate aircraft expenses.

As a result of the above changes, the Company’s income from operations increased $2.7 million to $79.0 million for fiscal 2006, a 3.5% increase compared to fiscal 2005. Income from operations was 14.9% as a percentage of net sales in fiscal 2006 compared to 15.2% as a percentage of net sales in fiscal 2005.

Other income increased from $6.1 million in fiscal 2005 to $9.0 million in fiscal 2006, a 47.5% increase. The increase in other income is primarily due to an increase in income earned on the Company’s cash and investments, resulting from higher interest rates and higher average balances of cash and investments, insurance proceeds received in the second quarter of fiscal 2006 related to Hurricane Katrina and Hurricane Rita losses, and the settlement of a lawsuit related to Visa/Mastercard interchange fees, as further described in Footnote A to the financial statements.

Income tax expense as a percentage of pre-tax income was 36.7% in fiscal 2006 compared to 37.0% in fiscal 2005, bringing net income to $55.7 million for fiscal 2006 versus $51.9 million for fiscal 2005, an increase of 7.4%. The decrease in the effective tax rate is partially due to an increase in tax-exempt interest income earned on investments.

Fiscal 2005 Compared to Fiscal 2004

Net sales increased from $470.9 million in fiscal 2004 to $501.1 million in fiscal 2005, a 6.4% increase. Comparable store sales increased by $6.2 million, or 1.4%, for the 52-week period ended January 28, 2006 compared to the same 52-week period in the prior year. The comparable store sales increase during the period resulted primarily from a 4.5% increase in the average retail price per piece of merchandise sold and a 1.0% increase in the average number of units sold per transaction, partially offset by a decrease in the number of transactions at comparable stores during the period. Sales growth for the 52-week period was also attributable to the inclusion of a full year of operating results for the 13 new stores opened during fiscal 2004, to the opening of 15 new stores during fiscal 2005, and to growth in online sales.

The Company’s average retail price per piece of merchandise sold increased $1.61, or 4.5%, in fiscal 2005 compared to fiscal 2004. This $1.61 increase in the average price per piece was primarily attributable to the following changes (with their corresponding effect on the overall average price per piece): a 5.5% increase in denim price points ($0.86), a 2.6% increase in knit shirt price points ($0.20), a 1.8% increase in woven shirt price points ($0.05), and a shift in the merchandise mix ($1.06). These increases were partially offset by reduced price points for outerwear ($0.26), accessories ($0.14), footwear ($0.07), and sportswear ($0.06). These changes are primarily a reflection of merchandise shifts in terms of brands; product styles, fabrics, details, and finishes; and the mix of branded versus private label. Average sales per square foot for fiscal 2005 increased 2.4% from $291 to $298.

Gross profit after buying, distribution, and occupancy costs increased $23.1 million in fiscal 2005 to $194.0 million, a 13.5% increase. As a percentage of net sales, gross profit increased from 36.3% in fiscal 2004 to 38.7% in fiscal 2005. The increase was primarily attributable to a 2.0% improvement, as a percentage of net sales, in actual merchandise margins, achieved through timely sell-throughs on new product and an increase in sales of private label merchandise, which achieves a higher margin due to greater initial mark-up. Gross profit improvement was also impacted by a 0.3% reduction, as a percentage of net sales, in occupancy costs and a 0.1% reduction, as a percentage of net sales, related to reduced incentive bonus expense. Merchandise shrinkage decreased from 0.7% in fiscal 2004 to 0.6% in fiscal 2005.

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Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Selling expenses increased from $89.0 million for fiscal 2004 to $100.1 million for fiscal 2005, a 12.5% increase. Selling expenses as a percentage of net sales increased from 18.9% for fiscal 2004 to 20.0% for fiscal 2005. The increase was primarily attributable to increases in internet-related fulfillment and marketing expenses (0.4%, as a percentage of net sales), store salaries (0.3%, as a percentage of net sales), bankcard fees as a result of a nearly 9% increase in the percentage of sales tendered in bankcards and increased rates charged by VISA/Mastercard (0.1%, as a percentage of net sales), health insurance costs (0.1%, as a percentage of net sales), payroll taxes (0.1%, as a percentage of net sales), and certain other selling expenses (0.1%, as a percentage of net sales).

General and administrative expenses decreased from $18.6 million in fiscal 2004 to $17.6 million in fiscal 2005, a 5.5% decrease. As a percentage of net sales, general and administrative expenses decreased from 3.9% for fiscal 2004 to 3.5% for fiscal 2005. The reduction in general and administrative expenses, as a percentage of net sales, was attributable to a reduction in the amount of non-vested stock compensation recognized during period (-0.4%, as a percentage of net sales), a reduction in the incentive bonus accrual (-0.1%, as a percentage of net sales), and reduced expense related to gains/losses on the disposal of assets (-0.1%, as a percentage of net sales). These reductions were partially offset by increases in professional fees related to the Company’s stock buyback from its founder and Sarbanes-Oxley compliance (0.1%, as a percentage of net sales) and certain other general and administrative expenses (0.1%, as a percentage of net sales).

As a result of the above changes, the Company’s income from operations increased $13.0 million to $76.3 million for fiscal 2005, a 20.4% increase compared to fiscal 2004. Income from operations was 15.2% as a percentage of net sales in fiscal 2005 compared to 13.5% as a percentage of net sales in fiscal 2004.

Other income for fiscal 2005 increased 37.0% from fiscal 2004 to $6.1 million in fiscal 2005. The increase is primarily due to an increase in interest income, as average interest rates on cash and investments were over 50% higher in fiscal 2005 than in fiscal 2004, although balances in cash and investments were lower during fiscal 2005 than they were during the prior fiscal year.

Income tax expense as a percentage of pre-tax income was 37.0% in fiscal 2005 compared to 36.3% in fiscal 2004, bringing net income to $51.9 million for fiscal 2005 versus $43.2 million for fiscal 2004, an increase of 20.1%.

Liquidity and Capital Resources

As of February 3, 2007, the Company had working capital of $189.0 million, including $35.8 million of cash and cash equivalents and $115.7 million in short-term investments. The Company’s primary ongoing cash requirements are for inventory, payroll, occupancy costs, dividend payments, new store expansion, and remodeling. Historically, the Company’s primary source of working capital has been cash flow from operations. During fiscal 2004, the Company paid dividends of $.0667 per share for each of the first two quarters, and a $.08 per share dividend paid during the third and fourth quarters. During fiscal 2005, the Company paid dividends of $.08 per share in the first quarter, $.10 per share in the second quarter, and $.1133 per share in both the third and fourth quarters. The Company continued the $.1133 per share cash dividends in the first and second quarters of fiscal 2006, while in the third quarter of fiscal 2006, it paid cash dividends of $.1333 per share and paid a $.20 per share dividend for the fourth quarter of fiscal 2006. In addition, the Company paid a special one-time cash dividend of $2.00 per share in the fourth quarter of fiscal 2006. These dividend amounts have been adjusted to reflect the impact of the Company’s 3-for-2 stock split in January 2007. The Company plans to continue its quarterly dividends during fiscal 2007. During fiscal 2006, 2005, and 2004, the Company’s cash flow from operations was $80.4 million, $76.1 million, and $72.6 million, respectively. During fiscal 2006, 2005, and 2004, the Company also used cash for repurchasing shares of the Company’s common stock. The Company purchased 654,300 shares in fiscal 2006 at a cost of $16.0 million. In fiscal 2005, the Company purchased 4,993,613 shares at a cost of $94.9 million, which included 4,500,000 shares from the Company’s founder and chairman at a cost of $84 million. The Company purchased 196,050 shares in fiscal 2004 at a cost of $3.4 million. The number of shares repurchased for each fiscal year has been adjusted to reflect the impact of the Company’s 3-for-2 stock split in January 2007. 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 million. Borrowings under the line of credit note 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 of credit during periods of peak inventory build-up. There were no borrowings during fiscal 2006, 2005, and 2004. The Company had no bank borrowings as of February 3, 2007.

page 12

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

During fiscal 2006, 2005, and 2004, the Company invested $19.0 million, $18.3 million, and $14.8 million, respectively, in new store construction, store renovation, and store technology upgrades. The Company also spent $2.9 million, $7.3 million, and $1.8 million, in fiscal 2006, 2005, and 2004, respectively, in capital expenditures for the corporate headquarters and distribution facility. In fiscal 2005, the Company expanded its corporate headquarters and distribution center by 82,200 square feet. The addition houses a 100,000 square foot multi-level structure for online sales fulfillment and customer service, plus areas for the supplies and returns-to-vendor departments.

During fiscal 2007, the Company anticipates completing approximately 32 store construction projects, including approximately 20 new stores and approximately 12 stores to be remodeled and/or relocated. As of March 2007, leases for eight new stores have been signed, and leases for nine additional locations are under negotiation; however, exact new store openings, remodels, and relocations may vary from those anticipated. The average cost of opening a new store during fiscal 2006 was approximately $867,000, including construction costs of approximately $656,000 and inventory costs of approximately $211,000, net of payables. Management estimates that total capital expenditures during fiscal 2007 will be approximately $28 to $30 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 had a consistent record of generating positive cash flows each year, does not currently have plans for any 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.

However, future conditions 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’s 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.

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, and 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 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 an estimate of the 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 SAB No. 101, 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 amount of the gift certificate liability is determined using the outstanding balances from the prior three years of issuance and the gift card liability is determined using the outstanding balances from the prior four years of issuance. The liability recorded for unredeemed gift cards and gift certificates was $6.7 million and $5.5 million as of February 3, 2007 and January 28, 2006, 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 $0.3 million and $0.3 million at February 3, 2007 and January 28, 2006, respectively.

page 13

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

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 mark downs and/or obsolescence was $6.4 million and $6.5 million as of February 3, 2007 and January 28,2006, respectively. We are not aware of any events, conditions, or changes in demand or price that would indicate that our 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.

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.

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.

page 14

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

The following tables identify the material obligations and commitments as of February 3, 2007:

			Payments Due by Period
Contractual obligations (dollar amounts in thousands)	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Long term debt	$	-	$	-	$	-	$	-	$	-
Purchase obligations	$	523	$	190	$	333	$	-	$	-
Deferred compensation	$	3,368	$	-	$	-	$	-	$	3,368
Operating leases	$	197,485	$	36,529	$	63,297	$	44,551	$	53,108
Total contractual obligations	$	201,376	$	36,719	$	63,630	$	44,551	$	56,476

			Amount of Commitment Expiration Per Period
Other commercial commitments (dollar amounts in thousands)	Total Amounts Committed		Less than 1 year		1-3 years		4-5 years		After 5 years
Lines of credit	$	-	$	-	$	-	$	-	$	-
Total commercial commitments	$	-	$	-	$	-	$	-	$	-

The Company has available an unsecured line of credit of $17.5 million, of which $10 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 fiscal 2006, 2005, and 2004. The Company had outstanding letters of credit totaling $0.7 million and $0.9 million at February 3, 2007 and January 28, 2006, respectively. The Company has no other off-balance sheet arrangements.

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 2006, 2005, and 2004, the Christmas and back-to-school seasons accounted for approximately 36%, 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 past three fiscal years. 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

On June 28, 2006, the Emerging Issues Task Force reached a consensus on Issue No. 06-3 (“EITF 06-3”), “How Taxes Collected from Customers and Remitted to Government Authorities Should be Presented in the Income Statement.” The consensus allows an entity to choose between two acceptable alternatives based on their accounting policies for transactions in which the entity collects taxes on behalf of a governmental authority, such as sales taxes. Under the gross method, taxes collected are accounted for as a component of revenue with an offsetting amount in operating expenses. Under the net method, taxes are excluded from revenue and are instead recorded as a liability until they are remitted to the appropriate governmental authority. EITF 06-3 will be effective at the beginning of the Company’s 2007 fiscal year. The Company’s current accounting policy is to record such taxes on a net basis. The Company does not anticipate that this pronouncement will have a material impact on the Company’s financial position, liquidity, and results of operations.

page 15

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

On July 13, 2006, the FASB issued Interpretation 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109.” The interpretation provides a consistent recognition threshold and measurement attribute, as well as clear criteria for subsequently recognizing, derecognizing, and measuring uncertain tax positions for financial statement purposes. The interpretation also requires expanded disclosure with respect to the uncertainty in income taxes. FIN 48 will be effective at the beginning of the Company’s 2007 fiscal year. The Company is currently assessing the effect of this pronouncement on the financial statements, but does not anticipate that it will have a material impact on the Company’s financial position, liquidity, and results of operations.

In September 2006, the FASB issued Statement No. 157 (“SFAS 157”), “Fair Value Measurements.” This standard defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 will be effective at the beginning of the Company’s 2008 fiscal year. The Company is currently assessing the effect of this pronouncement on the financial statements, but does not anticipate that it will have a material impact on the Company’s financial position, liquidity, and 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.

page 16

Management’s Report on Internal Control

Over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15-d-15(f) under the Securities Exchange Act of 1934. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Management has assessed the effectiveness of the Company’s internal control over financial reporting as of February 3, 2007, based on the criteria set forth by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission in its Internal Control-Integrated Framework. In making its assessment of internal control over financial reporting, management has concluded that the Company’s internal control over financial reporting was effective as of February 3, 2007.

The Company’s independent registered public accounting firm, Deloitte & Touche LLP, has audited management’s assessment of the Company’s internal control over financial reporting. Their report appears herein.

page 17

Report of Independent

Registered Public Accounting Firm

To the Board of Directors and Stockholders of

The Buckle, Inc.

Kearney, Nebraska

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that The Buckle, Inc. (the “Company”) maintained effective internal control over financial reporting as of February 3, 2007, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We have conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of February 3, 2007, is fairly stated, in all material respects, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also, in our opinion, the Company maintained effective internal control over financial reporting as of February 3, 2007, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the financial statements as of and for the year ended February 3, 2007 of the Company and our report dated April 16, 2007 expressed an unqualified opinion on those financial statements and included an explanatory paragraph relating to the Company’s adoption of Statement of Financial Accounting Standards No. 123(R), Share-Based Payment, in 2006.

Omaha, Nebraska

April 16, 2007

page 18

Report of Independent

Registered Public Accounting Firm

To the Board of Directors and Stockholders of

The Buckle, Inc.

Kearney, Nebraska

We have audited the accompanying balance sheets of The Buckle, Inc. (the “Company”) as of February 3, 2007 and January 28, 2006, and the related statements of income, stockholders’ equity and cash flows for each of the three fiscal years in the period ended February 3, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the financial position of The Buckle, Inc. as of February 3, 2007 and January 28, 2006, and the results of its operations and its cash flows for each of the three fiscal years in the period ended February 3, 2007, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note A to the financial statements, in 2006 the Company adopted Statement of Financial Accounting Standards No. 123(R), Share-Based Payment.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of February 3, 2007, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report, dated April 16, 2007, expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Omaha, Nebraska

April 16, 2007

page 19

Balance Sheets 

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

	February 3,			January 28,
	2007			2006
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	35,752		$	23,438
Short-term investments (Notes A and B)		115,721			134,672
Accounts receivable, net of allowance of $72 and $94, respectively		4,046			4,824
Inventory		70,306			68,731
Prepaid expenses and other assets (Note E)		12,401			6,894
Total current assets		238,226			238,559
PROPERTY AND EQUIPMENT (Note C):		215,630			199,618
Less accumulated depreciation and amortization		(121,811	)		(108,222	)
		93,819			91,396
LONG-TERM INVESTMENTS (Notes A and B)		31,958			41,654
OTHER ASSETS (Notes E and F)		4,195			2,657
	$	368,198		$	374,266
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	14,670		$	11,119
Accrued employee compensation		17,800			20,096
Accrued store operating expenses		4,468			3,725
Gift certificates redeemable		6,709			5,495
Income taxes payable		5,562			4,696
Total current liabilities		49,209			45,131
DEFERRED COMPENSATION (Note H)		3,368			2,518
DEFERRED RENT LIABILITY (Note A)		29,034			26,824
Total liabilities		81,611			74,473
COMMITMENTS (Notes D and G)
STOCKHOLDERS’ EQUITY (Note I):
Common stock, authorized 100,000,000 shares of $.01 par value; 29,408,576 and 19,339,153 shares issued and outstanding at February 3, 2007 and January 28, 2006, respectively		294			193
Additional paid-in capital		43,493			39,651
Retained earnings		242,800			261,948
Unearned compensation - restricted stock		-			(1,999	)
Total stockholders’ equity		286,587			299,793
	$	368,198		$	374,266

See notes to financial statements.

page 20

Statements of Income

(Dollar Amounts In Thousands Except Per Share Amounts) 

	Fiscal Years Ended
	February 3, 2007		January 28, 2006		January 29, 2005
SALES, Net of returns and allowances of $38,492, $36,936, and $35,028, respectively	$	530,074	$	501,1 01	$	470,937
COST OF SALES (Including buying, distribution, and occupancy costs)		322,760		307,063		299,958
Gross profit		207,314		194,038		170,979
OPERATING EXPENSES:
Selling		107,592		100,148		89,008
General and administrative		20,701		17,568		18,599
		128,293		117,716		107,607
INCOME FROM OPERATIONS		79,021		76,322		63,372
OTHER INCOME, Net (Note A)		9,032		6,123		4,470
INCOME BEFORE INCOME TAXES		88,053		82,445		67,842
PROVISION FOR INCOME TAXES (Note E)		32,327		30,539		24,613
NET INCOME	$	55,726	$	51,906	$	43,229
EARNINGS PER SHARE (Note J):
Basic	$	1.93	$	1.76	$	1.34
Diluted	$	1.86	$	1.69	$	1.29

See notes to financial statements.

page 21

Statements of Stockholders’ Equity

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

	Number of Shares			Common Stock			Additional Paid-in Capital			Retained Earnings			Unearned Compensation			Total
BALANCE, February 1, 2004		21,484,316		$	215		$	24,245		$	272,125		$	(2,740	)	$	293,845
Net income		-			-			-			43,229			-			43,229
Dividends paid on common stock,
($0.0667 per share -1st and 2nd quarters)		-			-			-			(4,314	)		-			(4,314	)
($0.08 per share -3rd and 4th quarters)		-			-			-			(5,186	)		-			(5,186	)
Common stock issued on exercise of stock options		336,108			3			4,297			-			-			4,300
Amortization of non-vested stock grant		-			-			-			-			2,724			2,724
Forfeiture of non-vested stock		(4,716	)		-			(117	)		-			16			(101	)
Common stock purchased and retired		(130,700	)		(1	)		(3,442	)		-			-			(3,443	)
Income tax benefit related to exercise of employee stock options		-			-			1,874			-			-			1,874
BALANCE, January 29, 2005		21,685,008			217			26,857			305,854			-			332,928
Net income		-			-			-			51,906			-			51,906
Dividends paid on common stock,
($0.08 per share -1st quarter)		-			-			-			(2,264	)		-			(2,264	)
($0.10 per share -2nd quarter)		-			-			-			(2,925	)		-			(2,925	)
($0.1133 per share -3rd and 4th quarters)		-			-			-			(6,619	)		-			(6,619	)
Common stock issued on exercise of stock options		905,720			9			12,486			-			-			12,495
Issuance of non-vested stock		77,500			-			2,666			-			(2,666	)		-
Amortization of non-vested stock grants		-			-			-			-			667			667
Common stock purchased and retired		(3,329,075	)		(33	)		(10,898	)		(84,004	)		-			(94,935	)
Income tax benefit related to exercise of employee stock options		-			-			8,540			-			-			8,540
BALANCE, January 28, 2006		19,339,153			193			39,651			261,948			(1,999	)		299,793
Reclassify unearned compensation		-			-			(1,999	)		-			1,999			-
Net income		-			-			-			55,726			-			55,726
Dividends paid on common stock,
($0.1133 per share - 1st and 2nd quarters)		-			-			-			(6,647	)		-			(6,647	)
($0.1333 per share - 3rd quarter)		-			-			-			(3,841	)		-			(3,841	)
($0.20 per share - 4th quarter)		-			-			-			(5,879	)		-			(5,879	)
($2.00 per share - 4th quarter)		-			-			-			(58,507	)		-			(58,507	)
Common stock issued on exercise of stock options		573,406			6			11,262			-			-			11,268
Issuance of non-vested stock		136,000			1			(1	)		-			-			-
Amortization of non-vested stock grants		-			-			2,708			-			-			2,708
Forfeiture of non-vested stock		(5,530	)		-			(13	)		-			-			(13	)
Stock option compensation expense		-			-			2,510			-			-			2,510
Common stock purchased and retired		(436,200	)		(4	)		(16,040	)		-			-			(16,044	)
Income tax benefit related to exercise of employee stock options		-			-			5,513			-			-			5,513
3-for-2 stock split		9,801,747			98			(98	)		-			-			-
BALANCE, February 3, 2007		29,408,576		$	294		$	43,493		$	242,800		$	-		$	286,587

See notes to financial statements.

page 22

Statements of Cash Flows

(Dollar Amounts In Thousands)

	Fiscal Years Ended
	February 3, 2007			January 28, 2006			January 29, 2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	55,726		$	51,906		$	43,229
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization		19,370			17,613			16,353
Amortization of non-vested stock grants		2,708			667			2,724
Stock option compensation expense		2,510			-			-
Forfeiture of non-vested stock		(13	)		-			-
Income tax benefit from employee stock option exercises		5,513			8,540			1,874
Deferred income taxes		(2,454	)		(973	)		(1,184	)
Other		449			114			531
Changes in operating assets and liabilities:
Accounts receivable		778			(2,937	)		1,698
Inventory		(1,575	)		(401	)		(7,174	)
Prepaid expenses		(4,565	)		(254	)		4,291
Accounts payable		3,146			(1,546	)		(1,542	)
Accrued employee compensation		(2,296	)		1,629			6,577
Accrued store operating expenses		743			(511	)		403
Gift certificates redeemable		1,214			841			876
Long-term liabilities and deferred compensation		3,060			2,463			970
Income taxes payable		(3,923	)		(1,018	)		2,954
Net cash flows from operating activities		80,391			76,133			72,580
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(21,857	)		(25,625	)		(16,637	)
Proceeds from sale of property and equipment		20			44			13
Change in other assets		(26	)		8			170
Purchases of investments		(92,685	)		(115,126	)		(133,432	)
Proceeds from sales/maturities of investments		121,332			166,056			95,755
Net cash flows from investing activities		6,784			25,357			(54,131	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the exercise of stock options		11,268			12,495			4,300
Excess tax benefit from employee stock option exercises		4,789			-			-
Purchases of common stock		(16,044	)		(94,935	)		(3,443	)
Payment of dividends		(74,874	)		(11,808	)		(9,500	)
Net cash flows from financing activities		(74,861	)		(94,248	)		(8,643	)
NET INCREASE IN CASH AND CASH EQUIVALENTS		12,314			7,242			9,806
CASH AND CASH EQUIVALENTS, Beginning of year		23,438			16,196			6,390
CASH AND CASH EQUIVALENTS, End of year	$	35,752		$	23,438		$	16,196

See notes to financial statements.

page 23

Notes to Financial Statements

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

A. Summary of Significant Accounting Policies

Fiscal Year - The Buckle, Inc. (the Company) has its fiscal year end on the Saturday nearest January 31. All references in these financial statements to fiscal years are to the calendar year in which the fiscal year begins. Fiscal 2006 represents the 53-week period ended February 3, 2007 while fiscal 2005 and 2004 represent the 52-week periods ended January 28, 2006 and January 29, 2005, respectively.

Nature of Operations - The Company is a retailer of medium to better priced casual apparel, footwear, and accessories for fashion conscious young men and women operating 350 stores located in 38 states throughout the continental United States (excluding the northeast) as of February 3, 2007.

During fiscal 2006, the Company opened 17 new stores, substantially renovated 10 stores, and closed 5 stores. During fiscal 2005, the Company opened 15 new stores, substantially renovated 9 stores, and closed 4 stores. During fiscal 2004, the Company opened 13 new stores, substantially renovated 8 stores, and closed 2 stores

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 an estimate of the 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. Shipping costs were $1,547, $1,150, and $674 during fiscal 2006, 2005, and 2004, respectively. Merchandise returns are estimated based upon the historical average sales return percentage and accrued at the end of the period. The reserve for merchandise returns was $344 and $308 as of February 3, 2007 and January 28, 2006, respectively. The Company accounts for layaway sales in accordance with SAB No. 101, Revenue Recognition, recognizing revenue from sales made under its layaway program upon delivery of the merchandise to the customer. The Company has several sales incentives that it offers customers including a frequent shopper punch card, B-Rewards gift certificates, and occasional sweepstakes and gift with purchase offers. The frequent shopper punch card is recognized as a cost of goods sold at the time of the redemption, using the actual amount tendered. The B-Rewards incentives, based upon $10 for each $300 in net purchases, are recorded as a liability and as a selling expense at the time the gift certificates are earned. Sweepstake prizes are recorded as cost of goods sold (if it is a merchandise giveaway) or as a selling expense at the time the prize is redeemed by the customer, using actual costs incurred, and gifts with purchase are recorded as a cost of goods sold at the time of the purchase and gift redemption, using the actual cost of the gifted item.

The Company records the sale of gift cards and gift certificates as a current liability and recognizes a sale when a customer redeems the gift card or gift certificate. The amount of the gift certificate liability is determined using the outstanding balances from the prior three years of issuance and the gift card liability is determined using the outstanding balances from the prior four years of issuance. The Company recognizes a current liability for the downpayment made when merchandise is placed on layaway and recognizes layaways as a sale at the time the customer makes final payment and picks up the merchandise.

Cash and Cash Equivalents - The Company considers all highly liquid debt instruments with an original maturity of three months or less when purchased to be cash equivalents.

Investments - The Company accounts for investments in accordance with Statement of Financial Accounting Standards Board (SFAS) No. 115, “Accounting for Certain Investments in 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 the Company’s investments in highly liquid auction-rate securities, 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. There are no unrealized gains and losses on the Company’s available-for-sale securities, as all available-for-sale securities are invested in highly liquid auction-rate securities where the fair market value is equivalent to cost due to the short-term nature of the investments. Held-to-maturity securities are carried at amortized cost. Trading securities are reported at fair value, with unrealized gains and losses included in earnings, using the specific identification method.

page 24

Notes to Financial Statements

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

Inventory - Inventory is stated at the lower of cost or market. Cost is determined using the average cost method. Management records a reserve for merchandise obsolescence and markdowns based on assumptions using calculations applied to current inventory levels by department within each of four different markdown levels. Management also reviews the levels of inventory in each markdown group, and the overall aging of inventory, versus the estimated future demand for such product and the current market conditions. The calculation for estimated markdowns and/or obsolescence reduced the Company’s inventory valuation by $6,370 and $6,496 as of February 3, 2007 and January 28, 2006, respectively. The amount charged (credited) to cost of goods sold, resulting from changes in the markdown reserve balance, was $(126), $1,516, and $2,416, for fiscal years 2006, 2005, and 2004, respectively.

Property and Equipment - Property and equipment are stated on the basis of historical cost. Depreciation is provided using a combination of accelerated and straight-line methods based upon the estimated useful lives of the assets. The majority of the property and equipment have useful lives of five to ten years with the exception of buildings, which have estimated useful lives of 31.5 to 39 years. Leasehold improvements are stated on the basis of historical cost and are amortized over the shorter of the life of the lease or the estimated economic life of the assets. When circumstances indicate the carrying values of long-lived assets may be impaired, an evaluation is performed on current net book value amounts. Judgments made by the Company related to the expected useful lives of property and equipment and the ability to realize cash flows in excess of carrying amounts of such assets are affected by factors such as changes in economic conditions and changes in operating performance. As the Company assesses the expected cash flows and carrying amounts of long-lived assets, adjustments are made to such carrying values.

Pre-Opening Expenses - Costs related to opening new stores are expensed as incurred.

Advertising Costs - Advertising costs are expensed as incurred and were $6,453, $6,112, and $4,969 for fiscal years 2006, 2005, and 2004, respectively.

Health Care Costs - The Company is self-funded for health and dental claims up to $100 per individual per plan year. This plan covers eligible employees, and management makes estimates at period end to record a reserve for unpaid claims based upon historical claims information. The accrued liability as a reserve for health care claims was $450 for the fiscal years ending both February 3, 2007 and January 28, 2006.

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 expensing rent, 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 in “accrued store operating expenses” on the balance sheets and the corresponding rent expense when specified levels have been achieved or are reasonably probable to be achieved.

page 25

Notes to Financial Statements

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

Other Income - The Company’s other income is derived primarily from interest and dividends received on cash and investments, but also includes miscellaneous other sources of income. The following table summarizes the Company’s other income for fiscal years included in the statements of income:

	Fiscal Years Ended
	February 3,		January 28,		January 29,
	2007		2006		2005
Interest/dividends from investments	$	7,618	$	5,189	$	3,739
Insurance proceeds		470		-		41
VISA/Mastercard settlement		356		-		-
Unredeemed gift cards/certificates		551		702		587
Miscellaneous		37		232		103
Other Income, net	$	9,032	$	6,123	$	4,470

Other income for fiscal 2006 included insurance proceeds from Hurricane Katrina and Hurricane Rita losses and settlement of a lawsuit related to Visa/Mastercard interchange fees. These proceeds had a $0.02 per share impact on both the Company’s reported after-tax basic and diluted earnings per share for the year ended February 3, 2007.

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 judgment of the Company’s management 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. 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.

Stock Split - On December 11, 2006, the Company’s Board of Directors approved a 3-for-2 stock split payable in the form of a stock dividend for shareholders of record as of January 3, 2007, with a distribution date of January 12, 2007. All share and per share data (except par value and historical stockholders’ equity data) presented in the financial statements for all periods has been adjusted to reflect the impact of this stock split.

Stock-Based Compensation - The Company has several stock-based employee compensation plans, which are described more fully in Note I. On January 29, 2006, the Company adopted FASB Statement No. 123 (revised 2004) (“SFAS 123(R)”), “Share-Based Payment,” utilizing the modified prospective approach and did not restate financial results for prior periods. Prior to fiscal 2006, the Company accounted for its equity awards under the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. The stock-based compensation expense reflected in net income for the fiscal year ended January 28, 2006 relates to the issuance of 116,250 shares non-vested common stock on February 22, 2005. The stock-based compensation expense reflected in net income for the fiscal year ended January 29, 2005 relates to the issuance of 254,760 shares of non-vested common stock on June 26, 2003. There is no recorded expense in fiscal years 2005 and 2004 from the issuance of stock options, as all options granted by the Company have a grant price equal to the market value of the common stock on the date of grant. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of FASB Statement No. 123, “Accounting for Stock-Based Compensation,” to stock-based employee compensation for fiscal years prior to fiscal 2006:

page26

Notes to Financial Statements

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

	Fiscal Year
	2005			2004
Net income, as reported	$	51,906		$	43,229
Add: Stock-based employee compensation expense
included in reported net income, net of tax effects
of $250 and $1,074, respectively		417			1,650
Deduct: Total stock-based employee compensation expense
determined under fair value based method for all awards,
net of tax effects of $1,686 and $2,741, respectively		(2,810	)		(4,568	)
Pro forma net income	$	49,513		$	40,311
Earnings per share:
Basic - as reported	$	1.76		$	1.34
Basic - pro forma	$	1.68		$	1.25
Diluted - as reported	$	1.69		$	1.29
Diluted - pro forma	$	1.61		$	1.21

Financial Instruments and Credit Risk Concentrations - Financial instruments, which potentially subject the Company to concentrations of credit risk, are primarily cash, investments, and accounts receivable. The Company places its investments primarily in tax-free municipal bonds, auction-rate securities, or U.S. Treasury securities with short term maturities and limits the amount of credit exposure to any one entity. Concentrations of credit risk with respect to accounts receivable are limited due to the nature of the Company’s receivables, which include primarily employee receivables that can be offset against future compensation. The Company’s financial instruments have a fair value approximating the carrying value.

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. Basic and diluted earnings per share for fiscal 2005 and fiscal 2004 have been adjusted to reflect the impact of the Company’s 3-for-2 stock split paid in the form of a stock dividend on January 12, 2007.

Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Comprehensive Income - Comprehensive income consists of net income and unrealized gains and losses on available-for-sale securities. There were no unrealized gains and losses recorded on the Company’s available-for-sale securities, as all available-for-sale securities are invested in highly liquid auction-rate securities where the fair market value is equivalent to cost due to the short-term nature of the investments.

Recently Issued Accounting Pronouncements - On June 28, 2006, the Emerging Issues Task Force reached a consensus on Issue No. 06-3 (“EITF 06-3”), “How Taxes Collected from Customers and Remitted to Government Authorities Should be Presented in the Income Statement.” The consensus allows an entity to choose between two acceptable alternatives based on their accounting policies for transactions in which the entity collects taxes on behalf of a governmental authority, such as sales taxes. Under the gross method, taxes collected are accounted for as a component of revenue with an offsetting amount in operating expenses. Under the net method, taxes are excluded from revenue and are instead recorded as a liability until they are remitted to the appropriate governmental authority. EITF 06-3 will be effective at the beginning of the Company’s 2007 fiscal year. The Company’s current accounting policy is to record such taxes on a net basis. The Company does not anticipate that this pronouncement will have a material impact on the Company’s financial position, liquidity, and results of operations.

page27

Notes to Financial Statements

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

On July 13, 2006, the FASB issued Interpretation 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109.” The interpretation provides a consistent recognition threshold and measurement attribute, as well as clear criteria for subsequently recognizing, derecognizing, and measuring uncertain tax positions for financial statement purposes. The interpretation also requires expanded disclosure with respect to the uncertainty in income taxes. FIN 48 will be effective at the beginning of the Company’s 2007 fiscal year. The Company is currently assessing the effect of this pronouncement on the financial statements, but does not anticipate that it will have a material impact on the Company’s financial position, liquidity, and results of operations.

In September 2006, the FASB issued Statement No. 157 (“SFAS 157”), “Fair Value Measurements.” This standard defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 will be effective at the beginning of the Company’s 2008 fiscal year. The Company is currently assessing the effect of this pronouncement on the financial statements, but does not anticipate that it will have a material impact on the Company’s financial position, liquidity, and results of operations.

Supplemental Cash Flow Information - The Company had non-cash investing activities during the fiscal years 2006, 2005, and 2004 of $405, $0, and $0, respectively. The non-cash investing activity related to unpaid purchases of property, plant, and equipment included in accounts payable as of the end of the year. 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 fiscal years 2006, 2005, and 2004 of $28,516, $24,109, and $21,084, respectively.

page28

Notes to Financial Statements

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

B. Investments

The following is a summary of investments as of February 3, 2007:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-Sale Securities:
Auction-rate securities	$	91,790	$	-	$	-		$	91,790
Held-to-Maturity Securities:
State and municipal bonds	$	39,125	$	118	$	(208	)	$	39,035
Fixed maturities		4,099		-		(8	)		4,091
U.S. treasuries		9,297		2		(62	)		9,237
	$	52,521	$	120	$	(278	)	$	52,363
Trading Securities:
Mutual funds	$	3,148	$	229	$	(9	)	$	3,368

The following is a summary of investments as of January 28, 2006:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-Sale Securities:
Auction-rate securities	$	106,277	$	-	$	-		$	106,277
Held-to-Maturity Securities:
State and municipal bonds	$	50,024	$	117	$	(427	)	$	49,714
Fixed maturities		3,500		193		-			3,693
Certificates of deposit		599		-		(9	)		590
U.S. treasuries		13,408		12		(165	)		13,255
	$	67,531	$	322	$	(601	)	$	67,252
Trading Securities:
Mutual funds	$	2,075	$	453	$	(10	)	$	2,518

Trading securities have been classified in long-term investments. These trading securities are held in a Rabbi Trust and are intended to fund the Company’s deferred compensation plan (See Note H).

The amortized cost and fair value of debt securities by contractual maturity at February 3, 2007 is as follows:

Fiscal Year		Amortized Cost		Fair Value
2007	$	23,931	$	23,841
2008		14,868		14,768
2009		4,831		4,822
2010		2,011		2,008
2011		931		934
Thereafter		5,949		5,990
	$	52,521	$	52,363

At February 3, 2007 and January 28, 2006, held-to-maturity investments of $28,590 and $39,136 are classified in long-term investments.

page29

Notes to Financial Statements

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

C. Property and Equipment

	February 3, 2007		January 28, 2006
Land	$	1,170	$	920
Building and improvements		11,936		12,183
Office equipment		4,157		3,050
Transportation equipment		15,856		15,856
Leasehold improvements		94,642		87,857
Furniture and fixtures		75,722		67,993
Shipping/receiving equipment		10,039		8,738
Screenprinting equipment		111		113
Construction-in-progress		1,997		2,908
	$	215,630	$	199,618

D. Financing Arrangements

The Company has available an unsecured line of credit of $17.5 million of which $10 million is available for letter of credits. Borrowings under the line of credit and letter of credit provide for interest to be paid at a rate equal to the prime rate as set by the Wells Fargo Bank, N.A. index on the date of the borrowings. There were no bank borrowings at February 3, 2007 and January 28, 2006. There were no bank borrowings during fiscal 2006, 2005, and 2004. The Company had outstanding letters of credit totaling $742 and $895 at February 3, 2007 and January 28, 2006, respectively.

E. Income Taxes

The provision for income taxes consists of:

	Fiscal Year
	2006			2005			2004
Current income tax expense (benefit):
Federal	$	29,397		$	26,589		$	21,851
State		5,384			4,923			3,946
Deferred		(2,454	)		(973	)		(1,184	)
Total	$	32,327		$	30,539		$	24,613

Total income tax expense for the year varies from the amount which would be provided by applying the statutory income tax rate to earnings before income taxes. The primary reasons for this difference (expressed as a percent of pre-tax income) are as follows:

	Fiscal Year
	2006			2005			2004
Statutory rate		35 .0	%		35 .0	%		35 .0	%
State income tax effect		4 .1			3 .9			3 .9
Tax exempt interest income		(2.2	)		(1 .5	)		(2 .1	)
Other		(0 .2	)		(0 .4	)		(0 .5	)
Effective tax rate		36.7	%		37 .0	%		36 .3	%

page30

Notes to Financial Statements

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

Deferred income tax assets and liabilities are comprised of the following:

	February 3,			January 28,
	2007			2006
Deferred income tax assets (liabilities):
Inventory	$	3,632		$	3,649
Stock-based compensation		1,878			270
Accrued compensation		1,895			1,519
Accrued store operating costs		86			87
Unrealized gain on trading securities		(82	)		(166	)
Capital loss carry forward on trading securities		-			101
Gift certificates redeemable		353			258
Allowance for doubtful accounts		27			35
Deferred rent liability		10,888			10,059
Property and equipment		(9,785	)		(9,374	)
Net deferred income tax asset	$	8,892		$	6,438

At February 3, 2007 and January 28, 2006, respectively, the net current deferred income tax assets of $5,852 and $4,909 are classified in prepaid expenses and other assets. The net non-current deferred income tax assets of $3,042 and $1,529 are classified in other assets at February 3, 2007 and January 28, 2006, respectively.

F. Related Party Transactions

Included in other assets is a note receivable of $945 and $915 at February 3, 2007 and January 28, 2006, respectively, from a life insurance trust fund controlled by the Company’s Chairman. The note was created over three years, beginning in July of 1994, when the Company paid life insurance premiums of $200,000 each year for the Chairman on a personal policy. The note accrues interest at 5% of the principal balance per year and is to be paid from the life insurance proceeds. The note is secured by a life insurance policy on the Chairman.

On March 24, 2005, the Company entered into an agreement with Daniel J. Hirschfeld, founder and Chairman, to purchase 4,500,000 shares of the Company’s outstanding stock from Mr. Hirschfeld. The shares were approximately 13.8% of the Company’s total outstanding common stock. The shares were purchased for $18.667 per share, or a total purchase price of $84 million. The number of shares and price per share have been adjusted to reflect the impact of the Company’s 3-for-2 stock split in January 2007. The Company retired the shares, reducing the total shares outstanding and reducing Mr. Hirschfeld’s ownership percentage to approximately 53%. The stock repurchase transaction was negotiated by a Special Committee of The Buckle, Inc.’s Board of Directors. The Special Committee, comprised of all of the Company’s independent Directors, approved the transaction. In connection with this transaction, the Special Committee received a written fairness opinion from Houlihan Lokey Howard & Zukin Financial Advisors, Inc., an international investment bank.

G. Lease Commitments

The Company conducts its operations in leased facilities under numerous noncancelable operating leases expiring at various dates through 2018. Most of the Company’s stores have lease terms of approximately ten years and generally do not contain renewal options. Most lease agreements contain tenant improvement allowances, rent holidays, lease premiums, rent escalation clauses, and/or rent provisions. For purposes of recognizing incentives, premiums, 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. Operating lease base rental expense for fiscal 2006, 2005, and 2004 was $36,093, $33,402, and $27,952, respectively. Most of the rental payments are based on a minimum annual rental plus a percentage of sales in excess of a specified amount. Percentage rents for fiscal 2006, 2005, and 2004 were $554, $481, and $518, respectively. Total future minimum rental commitments under these operating leases with remaining lease terms in excess of one year as of February 3, 2007 are as follows:

page31

Notes to Financial Statements

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

Fiscal Year
2007	$	36,529
2008		33,345
2009		29,952
2010		24,606
2011		19,945
Thereafter		53,108
Total minimum lease payments required	$	197,485

H. Employee Benefits

The Company has a 401(k) profit sharing plan covering all eligible employees who elect to participate. Contributions to the plan are based upon the amount of the employees’ deferrals and the employer’s discretionary matching formula. The Company may contribute to the plan at its discretion. The total expense under the profit sharing plan was $572, $617, and $548 for fiscal years 2006, 2005, and 2004, respectively.

The Buckle, Inc. Deferred Compensation Plan covers the Company’s executive officers. The plan is funded by participant contributions and a specified annual Company matching contribution not to exceed 6% of the participant’s compensation. The Company’s contributions were $153, $180, and $76 for fiscal years 2006, 2005, and 2004, respectively.

I. Stock-Based Compensation

The Company has several stock option plans which allow for granting of stock options to employees, executives, and directors. The options may be in the form of incentive stock options or non-qualified stock options and are granted at fair market value on the date of grant. The options generally expire ten years from the date of grant.

During fiscal 2006, the Company granted 204,000 shares of non-vested common stock under its 2005 Restricted Stock Plan. These grants resulted in $2,057 of compensation expense recognized on a graded vesting basis during the fiscal year ended February 3, 2007. Due to participants terminating their employment prior to the vesting date, 7,950 of these shares were forfeited. Upon certification by the Compensation Committee that the Company achieved its performance target for fiscal 2006, 20% of the non-forfeited shares will vest on March 19, 2007, with the remaining non-forfeited shares vesting 20% on February 2, 2008, 30% on January 31, 2009, and 30% on January 30, 2010.

During fiscal 2005, the Company granted 116,250 shares of non-vested common stock under its 2005 Restricted Stock Plan. These grants resulted in $638 and $667 of compensation expense recognized on a straight-line basis during the fiscal years ended February 3, 2007 and January 28, 2006, respectively. Due to participants terminating their employment, 345 of these shares were forfeited and the vesting for 5,100 of these shares was accelerated. Upon Certification by the Compensation Committee that the Company achieved its performance target for fiscal 2005, 20% of the non-forfeited shares vested on March 24, 2006, with the remaining non-forfeited, non-accelerated shares vesting 20% on February 3, 2007, 30% on February 2, 2008, and 30% on January 31, 2009.

In total, the Company recognized $2,695, $667, and $2,623 in compensation expense related to grants of non-vested shares during fiscal 2006, 2005, and 2004, respectively. On an after-tax basis, compensation expense related to non vested shares reduced the Company’s after-tax net income for fiscal 2006, 2005, and 2004 by $1,685, $417, and $1,639 or $0.06, $0.01, and $0.05 per share for both basic and diluted earnings per share, respectively.

As of February 3, 2007, 476,750 shares were available for grant under the various stock option plans, of which 301,889 were available for grant to executive officers. Also as of February 3, 2007, 25,545 shares were available for grant under the Company’s 2005 Restricted Stock Plan, all of which were available for grant to executive officers.

page32

Notes to Financial Statements

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

Options granted during fiscal 2006 and fiscal 2005 were granted under the Company’s 1993 Director Stock Option Plan. Options granted during fiscal 2004 were granted under the Company’s 1993 Director Stock Option Plan, 1997 Executive Stock Option Plan, and 1999 Employee Stock Option Plan. Grants were made with an option price equal to the market value of the Company’s common stock on the date of grant and a contractual term of ten years. Options granted under each of the plans typically vest over a period of three years

Upon adoption of SFAS 123(R), management determined that the cumulative effect adjustment from estimated forfeitures was immaterial and, as such, no cumulative effect was recorded. Compensation expense was recognized during fiscal 2006 for new awards, based on the grant date fair value, as well as for the portion of awards granted in previous fiscal years that was not vested as of the beginning of the fiscal year. The fair value of new grants of non-vested common stock awards is the stock price on the date of grant, while the fair value of stock options is determined using the Black- Scholes option pricing model. The adoption of SFAS 123(R) resulted in $2,510 of stock option compensation expense recognized during the fiscal year ended February 3, 2007. Stock option expense is allocated to cost of sales, selling expense, and general and administrative expense in a method similar to that of allocating accrued incentive bonus expense. On an after-tax basis, stock option compensation expense reduced the Company’s fiscal 2006 after-tax net income by $1,569, or $.05 per share for both basic and diluted earnings per share. In the fourth quarter of fiscal 2006, the vesting of 403,333 stock options was accelerated by the achievement of a market feature pursuant to the stock option plan and the award agreements. The accelerated vesting triggered the early recognition of $1,066 of pre-tax compensation expense related to the stock option grants, which the Company had been recording on a straight line basis over the previously expected remaining vesting period through December 30, 2008.

Prior to the adoption of SFAS 123 (R), the Company presented all tax benefits resulting from the exercise of stock options as operating cash inflows in the statements of cash flows, in accordance with the provisions of the EITF Issue No. 00-15, “Classification in the Statement of Cash Flows of the Income Tax Benefit Received by a Company upon Exercise of a Nonqualified Employee Stock Option.” SFAS 123(R) requires the benefits of tax deductions in excess of the compensation cost recognized for those options exercised to be classified as financing cash inflows on a prospective basis. This amount is shown as “excess tax benefit from employee stock option exercises” on the statement of cash flows. For the fiscal year ended February 3, 2007, the excess tax benefit realized from exercised stock options was $4,789. The Company has elected to adopt the transition method described in FASB Staff Position No. FAS 123(R)-3, “Transition Election Related to Accounting for the Tax Effect of Share-Based Payment Awards.”

On December 11, 2006, the Board of Directors authorized a $3.00 ($2.00 after 3-for-2 stock split) per share special one-time cash dividend to be paid January 2, 2007 to shareholders of record at the close of business on December 22, 2006. 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 additional compensation expense.

The weighted average grant date fair value of options granted during the fiscal year was $9.97, $8.99, and $9.96 per option for fiscal 2006, 2005, and 2004, respectively. The fair value of options granted during each of the fiscal years was estimated at the date of grant using the Black-Scholes option pricing model with the following assumptions:

	2006			2005			2004
Risk-free interest rate (1)		4.50 - 5.00	%		4.25	%		4 .00	%
Dividend yield (2)		1.60 - 2.00	%		1.70	%		1 .50	%
Expected volatility (3)		45.00	%		50.00	%		65 .00	%
Expected lives - years (4)		7			7			7

(1) Based on the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected lives of stock options.

(2) Based on expected dividend yield as of the date of grant.

(3) Based on historical volatility of the Company’s common stock over a period consistent with the expected lives of options.

(4) Based on historical and expected exercise behavior.

page 33

Notes to Financial Statements

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

A summary of the Company’s stock-based compensation activity related to stock options for the fiscal year ended February 3, 2007 is as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding - beginning of year		3,815,867		$	14 .26
Granted		27,450			23 .06
Other (1)		789			12 .58
Expired/forfeited		(16,223	)		17 .02
Exercised		(858,506	)		13 .12
Outstanding - end of year		2,969,377		$	12 .56		4.21 years	$	63,277
Vested or expected to vest - end of year		2,965,394		$	12.56		4.20 years	$	63,205
Exercisable - end of year		2,925,974		$	12 .49		4.16 years	$	62,565

(1) Adjustments were made to the exercise price and number of options outstanding for both the special cash dividend and 3-for-2 stock split during the fourth quarter of fiscal 2006. Historical information in table has been adjusted to reflect 3-for-2 stock split. “Other” represents additional options issued as a result of the special cash dividend in December 2006.

The total intrinsic value of options exercised during the fiscal years ended February 3, 2007, January 28, 2006, and January 29, 2005, respectively, was $14,656, $22,929, and $5,208. As of February 3, 2007, there was $167 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 1.6 years.

A summary of the Company’s stock-based compensation activity related to grants of non-vested shares of common stock for the fiscal year ended February 3, 2007 is as follows:

	Shares			Weighted Average Grant Date Fair Value
Non-Vested - beginning of year		116,250		$	22 .98	(1)
Granted		204,000			23 .50
Forfeited		(8,295	)		23 .48
Vested		(49,440	)		22.98	(1)
Non-Vested - end of year		262,515		$	23 .37

(1) Non-vested shares granted during fiscal 2005. In accordance with APB No. 25, these awards have been valued using the closing price of the Company’s common stock at the end of the performance period.

As of February 3, 2007, there was $3,470 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 2.1 years. The total fair value of shares vested during the fiscal years ended February 3, 2007, January 28, 2006, and January 29, 2005 was $1,480, $59, and $345, respectively.

page 34

Notes to Financial Statements

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

J. Earnings Per Share

The following table provides reconciliation between basic and diluted earnings per share:

	2006							2005							2004
	Income		Weighted Average Shares		Per Share Amount			Income		Weighted Average Shares		Per Share Amount			Income		Weighted Average Shares		Per Share Amount
Basic EPS
Net income	$	55,726		28,902	$	1.93		$	51,906		29,484	$	1.76		$	43,229		32,154	$	1.34
Effect of Dilutive Securities
Stock options and non-vested shares		-		1,112		(0.07	)		-		1,187		(0.07	)		-		1,232		(0.05	)
Diluted EPS	$	55,726		30,014	$	1.86		$	51,906		30,671	$	1.69		$	43,229		33,386	$	1.29

Options to purchase 107,730 shares of common stock in fiscal 2004 are not included in the computation of diluted earnings per share because the options would be considered anti-dilutive. There were no anti-dilutive options in fiscal 2005 or fiscal 2006.

K. Segment Information

The Company is a retailer of medium to better priced casual apparel, footwear, and accessories. The Company operated 350 stores located in 38 states throughout the continental United States (excluding the northeast) as of February 3, 2007. The Company operates its business as one segment.

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

	Fiscal Year
	2006			2005			2004
Denims		44.6	%		42.7	%		40.3	%
Tops (including sweaters)		31 .0			29 .8			31 .8
Accessories		9 .2			10 .2			11 .4
Footwear		7 .0			8 .1			7 .6
Outerwear		2 .3			3 .5			2 .5
Sportswear/fashions		3 .9			3 .1			4 .2
Casual bottoms		1 .9			2 .5			2 .1
Other		0 .1			0 .1			0 .1
		100.0	%		100.0	%		100.0	%

page 35

Notes to Financial Statements

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

L. Selected Quarterly Financial Data (Unaudited)

Selected unaudited quarterly financial information for fiscal 2006 and 2005 are as follows:

	Quarter
Fiscal 2006	First		Second		Third		Fourth
Net sales	$	109,606	$	102,398	$	143,084	$	174,986
Gross profit	$	39,027	$	34,068	$	58,649	$	75,570
Net income	$	9,354	$	6,639	$	17,661	$	22,072
Basic earnings per share	$	0.32	$	0.23	$	0.61	$	0.77
Diluted earnings per share	$	0.31	$	0.22	$	0.59	$	0.73

		Quarter
Fiscal 2005		First		Second		Third		Fourth
Net sales	$	105,547	$	104,130	$	138,067	$	153,357
Gross profit	$	37,249	$	36,247	$	56,249	$	64,293
Net income	$	8,621	$	7,553	$	16,590	$	19,142
Basic earnings per share	$	0.28	$	0.26	$	0.57	$	0.66
Diluted earnings per share	$	0.27	$	0.25	$	0.55	$	0.64

Basic and diluted shares outstanding are computed independently for each of the quarters presented and, therefore, may not sum to the totals for the year.

Stock Prices by Quarter

The Company’s common stock trades on the New York Stock Exchange under the symbol BKE. During fiscal 2006, the Company declared and paid cash dividends of $.1133 per share in the first and second quarters, $.1333 per share in the third quarter, and $.20 per share in the fourth quarter. The Company also paid a special one-time cash dividend of $2.00 per share in the fourth quarter of fiscal 2006. During fiscal 2005, the Company paid cash dividends of $.08 per share in the first quarter, $.10 per share in the second quarter, and $.1133 per share in the third and fourth quarters. During fiscal 2004, the Company paid cash dividends of $.0667 per share in the first and second quarters and $0.08 per share in the third and fourth quarters. All dividend amounts have been adjusted to reflect the impact of the Company’s 3-for-2 stock split in January, 2007.

The number of record holders of the Company’s common stock as of March 29, 2007 was 341. Based upon information from the principal market makers, the Company believes there are more than 2,500 beneficial owners. The last reported sales price of the Company’s common stock on March 29, 2007 was $35.10. The following table lists the Company’s quarterly market range for fiscal years 2006, 2005, and 2004.

	Fiscal Year
	2006				2005				2004
Quarter	High		Low		High		Low		High		Low
First		28.66		22.98		23.93		18.87		19.82		16.67
Second		28.89		25.03		30.93		22.65		19.33		16.93
Third		26.67		22.25		28.94		21.60		19.00		16.77
Fourth		36.65		25.25		26.65		21.17		21.31		17.11

page36

Corporate Information
DATE FOUNDED	ANNUAL MEETING
1948	The Annual Meeting of Shareholders is
	scheduled for 10:00 a.m. Thursday,
NUMBER OF EMPLOYEES	May 31, 2007, Kearney, Nebraska
6,500
	FORM 10-K
STOCK TRANSFER AGENT & REGISTRAR	A copy of the Form 10-K is available to
UMB Bank, n.a.	shareholders without charge upon
P.O. Box 419226	written request to:
Kansas City, Missouri 64141-6226	Karen B. Rhoads
(816) 860-7000	Vice President of Finance
	The Buckle, Inc.
STOCK EXCHANGE LISTING	P.O. Box 1480
New York Stock Exchange	Kearney, Nebraska 68848-1480
Trading Symbol: BKE
	TRADEMARKS
INDEPENDENT PUBLIC ACCOUNTANTS	BUCKLE, THE BUCKLE, RECLAIM,
Deloitte & Touche LLP	and BKE are trademarks of The Buckle, Inc.,
Omaha, Nebraska	which is registered in the United States.

BOARD OF DIRECTORS

Daniel J. Hirschfeld	Ralph M. Tysdal	Robert E. Campbell
Chairman of the Board		President and Operating Manager,
	John P. Peetz, III	Miller & Paine, LLC and Director of
Dennis H. Nelson	Executive Vice President and	Development, Madonna Foundation
President and Chief	Chief Operating Officer,
Executive Officer	Crete Carrier Corporation	Bruce L. Hoberman
		Chief Executive Officer, Proxibid, Inc.
James E. Shada	Bill L. Fairfield	and Director, MSI, Inc.
Executive Vice President of Sales	Chairman, DreamField Capital
	Ventures and Director, MSI, Inc.	David A. Roehr
Karen B. Rhoads		President, Landauction.com and
Vice President of Finance,		President, National Recreational
Treasurer, and Chief		Properties, Inc.
Financial Officer

EXECUTIVE OFFICERS

Dennis H. Nelson	Brett P. Milkie	Robert M. Carlberg
President and	Vice President of Leasing	Vice President of Men’s
Chief Executive Officer		Merchandising
	Kari G. Smith
James E. Shada	Vice President of Sales	Kyle L. Hanson
Executive Vice President of Sales		Corporate Secretary
	Karen B. Rhoads	and General Counsel
Patricia K. Whisler	Vice President of Finance,
Vice President of Women’s	Treasurer, and Chief
Merchandising	Financial Officer

EX-23

EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

The Buckle, Inc.

Kearney, Nebraska

We consent to the incorporation by reference in Registration Statement No. 333-133384, Registration Statement No. 333-70641, Registration Statement No. 333-70643, Registration Statement No. 33-48402, and Post-effective Amendment No. 1 to Registration Statement No. 333-70633 on Form S-8 of our reports relating to the financial statements and financial statement schedule of The Buckle, Inc. dated April 16, 2007 (which reports express an unqualified opinion and include an explanatory paragraph relating to the Company’s adoption of Statement of Financial Accounting Standards No. 123(R), Share-Based Payment, as described in Note A), and our report relating to management's report on the effectiveness of internal control over financial reporting dated April 16, 2007, appearing in this Annual Report on Form 10-K of The Buckle, Inc. for the year ended February 3, 2007.

/s/ Deloitte & Touche LLP

Omaha, Nebraska

April 16, 2007

EX-31.A

EXHIBIT 31a

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Dennis H. Nelson, certify that:

1.I have reviewed this annual report of The Buckle, Inc. on Form 10-K for the fiscal year ended February 3, 2007;

2.Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4.The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors:

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date: April 19, 2007	/s/ DENNIS H. NELSON
	Dennis H. Nelson Chief Executive Officer

EX-31.B

EXHIBIT 31b

CERTIFICATIONS

I, Karen B. Rhoads, certify that:

1.I have reviewed this annual report of The Buckle, Inc. on Form 10-K for the fiscal year ended February 3, 2007;

2.Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4.The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors:

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date: April 19, 2007	/s/ KAREN B. RHOADS
	Karen B. Rhoads
	Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATIONS PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of The Buckle, Inc. (the “Company”) on Form 10-K for the period ended February 3, 2007, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dennis H. Nelson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ DENNIS H. NELSON

Dennis H. Nelson

Chief Executive Officer

April 19, 2007

In connection with the Annual Report of The Buckle, Inc. (the “Company”) on Form 10-K for the period ended February 3, 2007, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Karen B. Rhoads, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ KAREN B. RHOADS

Karen B. Rhoads

Chief Financial Officer

April 19, 2007