Zumiez Inc. Announces Fiscal 2021 Third Quarter Results

Net Sales Increased 6.8% to $289.5 Million
Diluted Earnings Per Share Increased 7.8% to $1.25

LYNNWOOD, Wash., Dec. 02, 2021 (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 October 30, 2021.

Net sales for the third quarter ended October 30, 2021 (13 weeks) increased 6.8% to $289.5 million from $271.0 million in the third quarter ended October 31, 2020 (13 weeks). Compared to the third quarter ended November 2, 2019 (13 weeks), third quarter 2021 net sales increased 9.6%. Net income in the third quarter of fiscal 2021 was $30.7 million, or $1.25 per diluted share, compared to net income of $29.1 million, or $1.16 per diluted share, in the third quarter of the prior fiscal year. Net income for the third quarter of 2019 was $19.2 million, or $0.75 per diluted share.

Total net sales for the nine months (39 weeks) ended October 30, 2021 increased 27.0% to $837.2 million from $659.1 million reported for the nine months (39 weeks) ended October 31, 2020. Compared to the first nine months (39 weeks) ended November 2, 2019, net sales increased 18.7%. Net income for the first nine months of 2021 was $81.1 million, or $3.20 per diluted share, compared to net income for the first nine months of fiscal 2020 of $33.4 million, or $1.32 per diluted share, and compared to net income for the first nine months of fiscal 2019 of $29.0 million, or $1.14 per diluted share.

At October 30, 2021, the Company had cash and current marketable securities of $338.1 million compared to cash and current marketable securities of $316.2 million at October 31, 2020. The increase in cash and current marketable securities was driven by cash generated through operations partially offset by share repurchases and capital expenditures. The Company repurchased 2.2 million shares during the quarter at an average cost of $41.00 per share and a total cost of $91.6 million.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, “Our business continues to perform extremely well. With a strong back to school season driving record third quarter results, we generated more income in the first nine months of 2021 than in any full year period in the Company’s history and we still have the important holiday season ahead of us. Our operating model has again proven to be highly adaptable as we’ve recently navigated multiple external headwinds starting with the pandemic in early 2020 and now global supply chain disruptions to capitalize on strong consumer demand and expand our market share. The fourth quarter has started well and we are confident that our investments in people, sourcing and fulfillment will allow us to serve our consumers this holiday season with the distinct merchandise, great service and seamless shopping experiences that are the pillars of Zumiez’s long-term success.”

Fourth Quarter To-Date
Total fourth quarter-to-date total sales for the 31 days ending November 30, 2021 increased 11.5%, compared with the same 31-day time period in the prior year ended December 1, 2020. Compared to the 31-day period ended December 3, 2019, total net sales increased 8.6%. Total comparable sales for the 31-day period ending November 30, 2021 were up 8.4% from the comparable period in the prior year, and increased 6.5% from the comparable period in 2019. During the 31 days ending November 30, 2021 we have again experienced closures in Europe as a result of the pandemic. We continue to monitor this situation closely as sustained closures may have an impact on our forth quarter results. Fourth quarter-to-date as of November 30, 2021, the Company has repurchased an additional 0.4 million shares of stock at an average price of $47.91 and a total cost of $17.5 million. This brings 2021 fiscal year-to-date share repurchases to 2.8 million shares at an average cost of $42.16 per share for a total cost of $120.0 million.

Outlook
Due to the continued fast-moving nature of this situation and the uncertainty of impacts on revenue and costs, the Company is not providing an outlook at this time for the fourth quarter or the year.

Conference call Information
A conference call will be held today to discuss third quarter fiscal 2021 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (844) 309-0606 (domestic) or (574) 990-9934 (international) followed by the conference identification code of 2639078.

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 27, 2021, we operated 739 stores, including 607 in the United States, 52 in Canada, 63 in Europe and 17 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 30, 2021 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 INCOME
(In thousands, except per share amounts)
(Unaudited)

		Three Months Ended
		October 30, 2021			% of Sales				October 31, 2020		% of Sales
Net sales		$	289,455		100.0	%		$	270,952		100.0	%
Cost of goods sold			174,791		60.4	%			165,146		61.0	%
Gross profit			114,664		39.6	%			105,806		39.0	%
Selling, general and administrative expenses			74,822		25.8	%			67,941		25.0	%
Operating profit			39,842		13.8	%			37,865		14.0	%
Interest income, net			893		0.3	%			769		0.3	%
Other income, net			468		0.1	%			86		0.0	%
Earnings before income taxes			41,203		14.2	%			38,720		14.3	%
Provision for income taxes			10,501		3.6	%			9,581		3.5	%
Net income		$	30,702		10.6	%		$	29,139		10.8	%
Basic earnings per share		$	1.26					$	1.17
Diluted earnings per share		$	1.25					$	1.16
Weighted average shares used in computation of earnings per share:
Basic			24,284						24,864
Diluted			24,629						25,219
		Nine Months Ended
		October 30, 2021			% of Sales				October 31, 2020		% of Sales
Net sales		$	837,190		100.0	%			659,116		100.0	%
Cost of goods sold			514,393		61.4	%			438,724		66.6	%
Gross profit			322,797		38.6	%			220,392		33.4	%
Selling, general and administrative expenses			216,722		25.9	%			177,263		26.9	%
Operating profit			106,075		12.7	%			43,129		6.5	%
Interest income, net			2,833		0.3	%			2,637		0.4	%
Other income, net			571		0.1	%			584		0.1	%
Earnings before income taxes			109,479		13.1	%			46,350		7.0	%
Provision for income taxes			28,394		3.4	%			12,920		1.9	%
Net income		$	81,085		9.7	%			33,430		5.1	%
Basic earnings per share		$	3.26						1.34
Diluted earnings per share		$	3.20						1.32
Weighted average shares used in computation of earnings per share:
Basic			24,905						24,913
Diluted			25,325						25,271

ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

		October 30, 2021					January 30, 2021				October 31, 2020
		(Unaudited)									(Unaudited)
Assets
Current assets
Cash and cash equivalents		$	75,545				$	73,622			$	84,939
Marketable securities			262,541					301,920				231,234
Receivables			22,107					16,558				19,301
Inventories			175,108					134,354				160,961
Prepaid expenses and other current assets			11,633					8,823				9,240
Total current assets			546,934					535,277				505,675
Fixed assets, net			91,956					98,352				101,820
Operating lease right-of-use assets			244,777					267,152				273,796
Goodwill			59,525					61,470				59,540
Intangible assets, net			15,409					16,029				15,329
Deferred tax assets, net			7,784					9,927				8,192
Other long-term assets			11,804					10,157				9,802
Total long-term assets			431,255					463,087				468,479
Total assets		$	978,189				$	998,364			$	974,154
Liabilities and Shareholders’ Equity
Current liabilities
Trade accounts payable		$	84,609				$	69,751			$	84,069
Accrued payroll and payroll taxes			27,436					27,911				25,603
Income taxes payable			11,095					6,317				8,402
Operating lease liabilities			64,389					66,993				72,526
Other liabilities			30,112					24,480				25,327
Total current liabilities			217,641					195,452				215,927
Long-term operating lease liabilities			220,524					246,123				255,160
Other long-term liabilities			8,282					4,193				3,881
Total long-term liabilities			228,806					250,316				259,041
Total liabilities			446,447					445,768				474,968
Shareholders’ equity
Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding			—					—				—
Common stock, no par value, 50,000 shares authorized; 23,319 shares issued and outstanding at October 30, 2021, 25,599 shares issued and outstanding at January 30, 2021, and 25,472 shares issued and outstanding at October 31, 2020			179,049					171,628				167,119
Accumulated other comprehensive (loss) income			(5,867		)			939				(5,165		)
Retained earnings			358,560					380,029				337,232
Total shareholders’ equity			531,742					552,596				499,186
Total liabilities and shareholders’ equity		$	978,189				$	998,364			$	974,154

ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

		Nine Months Ended
		October 30, 2021				October 31, 2020
Cash flows from operating activities:
Net income		$	81,085			$	33,430
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion			17,318				17,909
Noncash lease expense			48,131				45,797
Deferred taxes			2,772				(2,155	)
Stock-based compensation expense			5,118				4,795
Impairment of long-lived assets			2,079				4,443
Other			1,204				(430	)
Changes in operating assets and liabilities:
Receivables			(3,681	)			(1,030	)
Inventories			(41,702	)			(24,856	)
Prepaid expenses and other assets			(4,275	)			532
Trade accounts payable			14,276				36,196
Accrued payroll and payroll taxes			(351	)			1,711
Income taxes payable			4,253				2,629
Operating lease liabilities			(59,099	)			(40,945	)
Other liabilities			4,808				3,728
Net cash provided by operating activities			71,936				81,754
Cash flows from investing activities:
Additions to fixed assets			(8,808	)			(7,488	)
Purchases of marketable securities and other investments			(151,089	)			(135,515	)
Sales and maturities of marketable securities and other investments			186,116				104,742
Net cash provided by (used in) investing activities			26,219				(38,261	)
Cash flows from financing activities:
Proceeds from issuance and exercise of stock-based awards			2,863				959
Payments for tax withholdings on equity awards			(560	)			(93	)
Common stock repurchased			(98,520	)			(13,417	)
Net cash used in financing activities			(96,217	)			(12,551	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			(66	)			1,899
Net increase in cash, cash equivalents, and restricted cash			1,872				32,841
Cash, cash equivalents, and restricted cash, beginning of period			80,690				58,991
Cash, cash equivalents, and restricted cash, end of period		$	82,562			$	91,832
Supplemental disclosure on cash flow information:
Cash paid during the period for income taxes		$	20,507			$	11,933
Accrual for purchases of fixed assets			1,851				346
Accrual for repurchase of common stock			4,034				—

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

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