• Zumiez Inc. Announces Fiscal 2024 Third Quarter Results

    Source: Nasdaq GlobeNewswire / 05 Dec 2024 16:05:00   America/New_York

    Third Quarter Comparable Sales Increased 7.5%
    Third Quarter Gross Margin increased 140 basis points to 35.2%
    Third Quarter Earnings Per share improved to $0.06 from ($0.12)
    Fourth Quarter Comparable Sales Guidance up 6.0% - 7.5%

    LYNNWOOD, Wash., Dec. 05, 2024 (GLOBE NEWSWIRE) -- Zumiez Inc. (NASDAQ: ZUMZ) a leading specialty retailer of apparel, footwear, equipment and accessories for young men and women, today reported results for the third quarter ended November 2, 2024.

    Net sales for the third quarter ended November 2, 2024 (13 weeks) increased 2.9% to $222.5 million from $216.3 million in the third quarter ended October 28, 2023 (13 weeks). Comparable sales for the thirteen weeks ended November 2, 2024 increased 7.5%. The shift in the retail calendar had a negative impact on the third quarter results, decreasing net sales growth by approximately 510 basis points. However, this shift positively affected net sales growth in the second quarter. Comparable sales growth, as reported, is not impacted by the calendar shift and provides a more accurate measure of operating performance. Net income in the third quarter of fiscal 2024 was $1.2 million, or $0.06 per share, compared to a net loss of $2.2 million, or $0.12 per share, in the third quarter of the prior fiscal year.

    Total net sales for the nine months (39 weeks) ended November 2, 2024 increased 2.8% to $610.0 million from $593.7 million reported for the nine months (39 weeks) ended October 28, 2023. Comparable sales increased 3.2% for thirty-nine weeks ended November 2, 2024. Net loss for the first nine months of fiscal 2024 was $16.5 million, or $0.86 per share, compared to a net loss for the first nine months of fiscal 2023 of $29.1 million, or $1.51 per share.

    As of November 2, 2024, the Company had cash and current marketable securities of $99.3 million compared to cash and current marketable securities of $135.8 million as of October 28, 2023. The decrease was primarily driven by share repurchases and capital expenditures partially offset by cash flow from operations.

    Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, “The strategic initiatives we have been executing this year have contributed to a noticeable increase in sales trends. Fueled by growing strength in our North American business, consolidated comparable sales sequentially accelerated 390 basis points to high-single digits in the third quarter. We experienced strong gains in our apparel and footwear categories as consumers have responded favorably to our refined product assortments and enhanced customer engagement tactics. We still have much work to do improving profitability and capitalizing on the opportunities we have created for the Company. Our results during back-to-school and the start of the holiday season represent solid progress toward these goals and we are committed to building on our momentum to deliver greater value for our shareholders next year and over the long term.”

    Fourth Quarter To-Date
    Total fourth quarter-to-date total sales for the 31 days ending December 3, 2024 increased 10.0%, compared with the same 31-day time period in the prior year ended November 28, 2023. Total comparable sales for the 31-day period ending December 3, 2024 increased 2.9% from the comparable period in the prior year.

    Fiscal 2024 Fourth Quarter Outlook
    The Company is introducing guidance for the three months ending February 1, 2025. Net sales are projected to be in the range of $284 to $288 million. Consolidated operating margins are expected to be between 6.0% and 7.5% resulting in earnings per diluted share of approximately $0.83 to $0.93.

    The Company has opened 6 new stores in fiscal 2024, with one additional store opening planned in the fourth quarter. These 7 new stores opened during the year include 3 stores in North America, 2 stores in Europe and 2 stores in Australia. We expect to close approximately 33 stores throughout fiscal 2024 by the end of the year.

    Conference call Information
    To access the conference call, please pre-register using this link (Registration Link) Registrants will receive confirmation with dial-in details. The conference call will also be available to interested parties through a live webcast at https://ir.zumiez.com. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. A replay of the webcast will also be available for a limited time at https://ir.zumiez.com.

    About Zumiez Inc.
    Zumiez is a leading specialty retailer of apparel, footwear, accessories and hardgoods for young men and women who want to express their individuality through the fashion, music, art and culture of action sports, streetwear, and other unique lifestyles. As of November 30, 2024, we operated 752 stores, including 592 in the United States, 46 in Canada, 87 in Europe and 27 in Australia. We operate under the names Zumiez, Blue Tomato and Fast Times. Additionally, we operate ecommerce web sites at zumiez.com, zumiez.ca, blue-tomato.com and fasttimes.com.au.

    Safe Harbor Statement
    Certain statements in this press release and oral statements relating thereto made from time to time by representatives of the Company may constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These statements include, without limitation, predictions and guidance relating to the Company's future financial performance, brand and product category diversity, ability to adjust product mix, integration of acquired businesses, growing customer demand for our products and new store openings. In some cases, you can identify forward-looking statements by terminology such as, "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. These forward-looking statements are based on management's current expectations, but they involve a number of risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of risks and uncertainties, which include, without limitation, those described in the Company’s annual report on Form 10-K for the fiscal year ended January 28, 2023 as filed with the Securities and Exchange Commission and available at www.sec.gov. You are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. The forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

     
    ZUMIEZ INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (In thousands, except per share amounts)
    (Unaudited)
       
      Three Months Ended
      November 2, 2024 % of Sales October 28, 2023
    		 % of Sales
    Net sales $222,475  100.0% $216,339  100.0%
    Cost of goods sold  144,161  64.8%  143,135  66.2%
    Gross profit  78,314  35.2%  73,204  33.8%
    Selling, general and administrative expenses  75,946  34.1%  73,361  33.9%
    Operating income (loss)  2,368  1.1%  (157) -0.1%
    Interest income, net  1,013  0.5%  948  0.4%
    Other expense, net  (217) -0.1%  (1,037) -0.4%
    Profit (loss), before income taxes  3,164  1.5%  (246) -0.1%
    Provision for income taxes  2,005  0.9%  1,985  0.9%
    Net income (loss) $1,159  0.6% $(2,231) -1.0%
    Basic income (loss) per share $0.06    $(0.12)  
    Diluted income (loss) per share $0.06    $(0.12)  
    Weighted average shares used in computation of income (loss) per share        
    Basic  18,463     19,327   
    Diluted  18,881     19,327   
               
      Nine Months Ended
      November 2, 2024 % of Sales October 28, 2023
    		 % of Sales
    Net sales $610,042  100.0% $593,664  100.0%
    Cost of goods sold  408,035  66.9%  409,425  69.0%
    Gross profit  202,007  33.1%  184,239  31.0%
    Selling, general and administrative expenses  220,187  36.0%  216,243  36.3%
    Operating loss  (18,180) -2.9%  (32,004) -5.3%
    Interest income, net  3,463  0.6%  2,581  0.4%
    Other expense, net  (1,163) -0.2%  (1,156) -0.2%
    Loss before income taxes  (15,880) -2.5%  (30,579) -5.1%
    Provision for (benefit from), income taxes  587  0.1%  (1,456) -0.2%
    Net loss $(16,467) -2.6% $(29,122) -4.9%
               
    Basic loss per share $(0.86)   $(1.51)  
    Diluted loss per share $(0.86)   $(1.51)  
    Weighted average shares used in computation of loss per share:          
    Basic  19,070     19,278   
    Diluted  19,070     19,278   
               


     
    ZUMIEZ INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In thousands)
           
      November 2, 2024 February 3, 2024 October 28, 2023
      (Unaudited)   (Unaudited)
    Assets      
    Current assets      
    Cash and cash equivalents $48,542  $88,875  $48,968 
    Marketable securities  50,760   82,704   86,857 
    Receivables  14,927   13,780   23,022 
    Inventories  187,230   128,827   175,882 
    Prepaid expenses and other current assets  16,923   12,401   11,315 
    Total current assets  318,382   326,587   346,044 
    Fixed assets, net  84,783   90,508   92,925 
    Operating lease right-of-use assets  192,721   196,775   212,984 
    Goodwill  15,376   15,374   55,145 
    Intangible assets, net  14,224   14,200   13,819 
    Deferred tax assets, net  8,553   8,623   10,788 
    Other long-term assets  11,935   12,159   11,321 
    Total long-term assets  327,592   337,639   396,982 
    Total assets $645,974  $664,226  $743,026 
           
    Liabilities and Shareholders’ Equity      
    Current liabilities      
    Trade accounts payable $72,537  $38,885  $74,337 
    Accrued payroll and payroll taxes  18,965   18,431   18,756 
    Operating lease liabilities  59,084   60,885   69,084 
    Other current liabilities  19,527   25,886   19,602 
    Total current liabilities  170,113   144,087   181,779 
    Long-term operating lease liabilities  151,981   159,877   176,233 
    Other long-term liabilities  6,792   7,052   5,550 
    Total long-term liabilities  158,773   166,929   181,783 
    Total liabilities $328,886  $311,016  $363,562 
           
    Shareholders’ equity      
    Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding  —   —   — 
    Common stock, no par value, 50,000 shares authorized; 19,171 shares issued and outstanding at November 2, 2024 and 19,833 shares issued and outstanding at February 3, 2024  201,853   196,144   194,230 
    Accumulated other comprehensive loss  (19,185)  (19,027)  (24,347)
    Retained earnings  134,420   176,093   209,581 
    Total shareholders’ equity  317,088   353,210   379,464 
    Total liabilities and shareholders’ equity $645,974  $664,226  $743,026 
                 


     
    ZUMIEZ INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands)
    (Unaudited)
       
      Nine Months Ended
      November 2, 2024 October 28, 2023
    Cash flows from operating activities:    
    Net loss $(16,467) $(29,122)
    Adjustments to reconcile loss to net cash used in operating activities:    
    Depreciation, amortization and accretion  16,507   16,209 
    Noncash lease expense  48,424   51,607 
    Deferred taxes  (324)  (3,014)
    Stock-based compensation expense  5,110   5,108 
    Impairment of long-lived assets  535   925 
    Other  1,378   943 
    Changes in operating assets and liabilities:    
    Receivables  484   (1,767)
    Inventories  (59,401)  (43,186)
    Prepaid expenses and other assets  (152)  (273)
    Trade accounts payable  31,956   34,270 
    Accrued payroll and payroll taxes  540   2,684 
    Income taxes payable  (578)  252 
    Operating lease liabilities  (55,565)  (52,656)
    Other liabilities  (6,437)  (4,902)
    Net cash used in operating activities  (33,990)  (22,922)
    Cash flows from investing activities:    
    Additions to fixed assets  (10,012)  (16,210)
    Purchases of marketable securities  (1,967)  (28,679)
    Sales and maturities of marketable securities and other investments  34,077   34,506 
    Net cash provided by (used in) investing activities  22,098   (10,383)
    Cash flows from financing activities:    
    Proceeds from revolving credit facilities  3,220   25,682 
    Payments on revolving credit facilities  (3,220)  (25,682)
    Proceeds from issuance and exercise of stock-based awards  736   890 
    Payments for tax withholdings on equity awards  (130)  (185)
    Repurchase of common stock, including taxes  (25,206)  - 
    Net cash (used in) provided by financing activities  (24,600)  705 
    Effect of exchange rate changes on cash, cash equivalents, and restricted cash  (242)  (1,643)
    Net decrease in cash, cash equivalents, and restricted cash  (36,734)  (34,243)
    Cash, cash equivalents, and restricted cash, beginning of period  94,284   88,453 
    Cash, cash equivalents, and restricted cash, end of period $57,550  $54,210 
    Supplemental disclosure on cash flow information:    
    Cash paid during the period for income taxes $1,961  $1,686 
    Accrual for purchases of fixed assets  2,218   2,780 
         

    Company Contact:
    Darin White
    Vice President of Finance &
    Investor Relations
    Zumiez Inc.
    (425) 551-1500, ext. 1337

    Investor Contact:
    ICR
    Brendon Frey
    (203) 682-8200


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