Analyst starts The Buckle at 'Outperform'

Buckle's stock rose $2.03, or 4.5 percent, to $47.16.

Although many retailers have struggled to post strong sales growth, Buckle recently posted a 34.7 percent gain in same-store sales in May. Total sales for the period rose 44.1 percent to $50.8 million.

Same-store sales, or sales at stores open at least a year, is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.

JPMorgan analyst Anna A. Andreeva, who started coverage of Buckle at "Overweight," said the secret to Buckle's success is an assortment of limited distribution, third-party brands, which comprise 70 percent of Buckle's total product mix. These brands are becoming more important this year, Andreeva said, and have been successful in appealing to teens and young adults. Specifically, Andreeva said fashion has shifted to an edgy look, with brands like Affliction, Sinful and Obey becoming more popular this year.

Furthermore, half of Buckle's stores are located in smaller, commodity-rich markets, such as Texas, which have limited competition. About 11 percent of the company's stores are located in Texas, a commodity-rich state, Andreeva said. Texas has been a strong market for the company, which Andreeva thinks has been helped by the rising price of oil.

"Texas has seen the highest income per capita increase in the past three years, most of which has been driven by commodity appreciation," Andreeva wrote in a client note.

Buckle also has a strong management team, Andreeva added, but thinks a departure of one of these executives may affect results.