Zumiez Inc. Announces Fiscal 2024 First Quarter Results

LYNNWOOD, Wash., June 06, 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 first quarter ended May 4, 2024.

Net sales for the first quarter ended May 4, 2024 (13 weeks) decreased 3.0% to $177.4 million from $182.9 million in the first quarter ended April 29, 2023 (13 weeks). Net loss in the first quarter of fiscal 2024 was $16.8 million, or $0.86 loss per diluted share, compared to a net loss of $18.4 million, or $0.96 loss per diluted share, in the first quarter of the prior fiscal year.

At May 4, 2024, the Company had cash and current marketable securities of $146.6 million compared to cash and current marketable securities of $155.3 million at April 29, 2023. The decrease was driven by capital expenditures of $17.5 million over this time period, offset by $9.1 million provided by operating activities.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "Fiscal 2024 is off to an encouraging start as we once again achieved sequential improvement in our year-over-year quarterly sales trends and both top and bottom line results exceeded our initial outlook for the quarter. The results were driven by our North American region which inflected positive in the first quarter. At the same time, our focus on improving full priced selling in Europe helped expand merchandise margins, which more than offset expense deleverage and fueled enhanced operating performance versus a year ago, even as overall sales remained under pressure. We still have much work to do to return to historic levels of both sales and profitability, but I am confident that our strategies to reinvigorate growth and reduce our cost base have us on the path to deliver further progress over the remainder of this year and beyond."

May 2024 Sales

Net sales for the four-week period ended June 1, 2024 increased 1.8% compared to the four-week period ended May 27, 2023. Comparable sales for the four-week period ending June 1, 2024 decreased 0.2% from the comparable period in the prior year.

Fiscal 2024 Second Quarter Outlook

The Company is introducing guidance for the three months ending August 3, 2024. Net sales are projected to be in the range of $199 to $204 million. Loss per share is expected to be between $0.30 to $0.40.

The Company currently intends to open approximately 10 new stores in fiscal 2024, including up to 3 stores in North America, 3 stores in Europe and 4 stores in Australia.

Stock Repurchase Authorization

On June 5, 2024, Zumiez Inc. approved the repurchase of up to an aggregate of $25 million of common stock. The repurchase program is expected to continue through June 30, 2025 unless the time period is extended or shortened by the Board of Directors.

Conference call Information

To access today's first quarter 2024 earnings call at 5:00 PM ET, 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 June 1, 2024, we operated 751 stores, including 593 in the United States, 47 in Canada, 86 in Europe and 25 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 LOSS (In thousands, except per share amounts) (Unaudited)
		Three Months Ended
		May 4, 2024				% of Sales				April 29, 2023			% of Sales
Net sales		$	177,388			100.0	%		$	182,887			100.0	%
Cost of goods sold			125,489			70.7	%			133,529			73.0	%
Gross profit			51,899			29.3	%			49,358			27.0	%
Selling, general and administrative expenses			72,054			40.6	%			70,712			38.7	%
Operating loss			(20,155	)		-11.3	%			(21,354	)		-11.7	%
Interest income, net			1,321			0.7	%			858			0.5	%
Other expense, net			(767	)		-0.4	%			(541	)		-0.3	%
Loss before income taxes			(19,601	)		-11.0	%			(21,037	)		-11.5	%
Benefit from income taxes			(2,821	)		-1.6	%			(2,655	)		-1.4	%
Net loss		$	(16,780	)		-9.4	%		$	(18,382	)		-10.1	%
Basic loss per share		$	(0.86	)					$	(0.96	)
Diluted loss earnings per share		$	(0.86	)					$	(0.96	)
Weighted average shares used in computation of loss per share:
Basic			19,465							19,197
Diluted			19,465							19,197

 

ZUMIEZ INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
		May 4, 2024					February 3, 2024					April 29, 2023
		(Unaudited)										(Unaudited)
Assets
Current assets
Cash and cash equivalents		$	74,864				$	88,875				$	66,655
Marketable securities			71,757					82,704					88,684
Receivables			13,415					13,780					20,655
Inventories			146,815					128,827					147,871
Prepaid expenses and other current assets			14,177					12,401					12,755
Total current assets			321,028					326,587					336,620
Fixed assets, net			89,831					90,508					94,419
Operating lease right-of-use assets			192,607					196,775					216,091
Goodwill			15,385					15,374					56,925
Intangible assets, net			14,117					14,200					14,404
Deferred tax assets, net			11,158					8,623					11,034
Other long-term assets			12,495					12,159					12,005
Total long-term assets			335,593					337,639					404,878
Total assets		$	656,621				$	664,226				$	741,498
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable		$	62,301				$	38,885				$	59,551
Accrued payroll and payroll taxes			16,958					18,431					18,378
Operating lease liabilities			59,191					60,885					63,866
Other current liabilities			18,869					25,886					19,298
Total current liabilities			157,319					144,087					161,093
Long-term operating lease liabilities			155,040					159,877					182,507
Other long-term liabilities			6,927					7,052					6,055
Total long-term liabilities			161,967					166,929					188,562
Total liabilities			319,286					311,016					349,655
Shareholders' equity
Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding			—					—					—
Common stock, no par value, 50,000 shares authorized; 20,318 shares issued and outstanding at May 4, 2024 and 19,833 shares issued and outstanding at February 3, 2024			198,047					196,144					190,599
Accumulated other comprehensive loss			(20,025		)			(19,027		)			(19,077		)
Retained earnings			159,313					176,093					220,321
Total shareholders' equity			337,335					353,210					391,843
Total liabilities and shareholders' equity		$	656,621				$	664,226				$	741,498

ZUMIEZ INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
		Three Months Ended
		May 4, 2024				April 29, 2023
Cash flows from operating activities:
Net loss		$	(16,780	)		$	(18,382	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization and accretion			5,561				5,379
Noncash lease expense			14,522				16,313
Deferred taxes			(2,590	)			(2,912	)
Stock-based compensation expense			1,675				1,906
Impairment of long-lived assets			101				312
Other			525				375
Changes in operating assets and liabilities:
Receivables			1,077				1,030
Inventories			(18,876	)			(13,091	)
Prepaid expenses and other assets			1,754				(925	)
Trade accounts payable			21,763				18,868
Accrued payroll and payroll taxes			(1,458	)			2,087
Income taxes payable			(797	)			(301	)
Operating lease liabilities			(17,276	)			(18,609	)
Other liabilities			(7,778	)			(4,929	)
Net cash used in operating activities			(18,577	)			(12,879	)
Cash flows from investing activities:
Additions to fixed assets			(2,546	)			(5,438	)
Purchases of marketable securities and other investments			(1,967	)			(1,850	)
Sales and maturities of marketable securities and other investments			12,510				5,571
Net cash provided by (used in) investing activities			7,997				(1,717	)
Cash flows from financing activities:
Proceeds from revolving credit facilities			3,220				1,549
Payments on revolving credit facilities			(3,220	)			(1,549	)
Proceeds from issuance and exercise of stock-based awards			358				460
Payments for tax withholdings on equity awards			(130	)			(185	)
Net cash provided by financing activities			228				275
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			(245	)			(509	)
Net decrease in cash, cash equivalents, and restricted cash			(10,597	)			(14,830	)
Cash, cash equivalents, and restricted cash, beginning of period			94,284				88,453
Cash, cash equivalents, and restricted cash, end of period		$	83,687			$	73,623
Supplemental disclosure on cash flow information:
Cash paid during the period for income taxes		$	654			$	536
Accrual for purchases of fixed assets			2,094				2,323

Company Contact:

Darin White

Director of Finance &

Investor Relations

Zumiez Inc.

(425) 551-1500, ext. 1337

Investor Contact:

ICR

Brendon Frey

(203) 682-8200