LYNNWOOD, Wash., Sept. 07, 2023 (GLOBE NEWSWIRE) -- Zumiez Inc. ( ZUMZ) a leading specialty retailer of apparel, footwear, equipment and accessories for young men and women, today reported results for the second quarter ended July 29, 2023.
Net sales for the second quarter ended July 29, 2023 (13 weeks) decreased 11.6% to $194.4 million from $220.0 million in the second quarter ended July 30, 2022 (13 weeks). Net loss in the second quarter of fiscal 2023 was $8.5 million, or $0.44 per diluted share, compared to net income of $3.1 million, or $0.16 per diluted share, in the second quarter of the prior fiscal year.
Total net sales for the six months (26 weeks) ended July 29, 2023 decreased 14.4% to $377.3 million from $440.7 million reported for the six months (26 weeks) ended July 30, 2022. Net loss for the first six months of fiscal 2023 was $26.9 million, or $1.40 per diluted share, compared to net income for the first six months of fiscal 2022 of $2.7 million, or $0.14 per diluted share.
At July 29, 2023, the Company had cash and current marketable securities of $140.0 million compared to cash and current marketable securities of $166.2 million at July 30, 2022. The decrease was primarily driven by capital expenditures.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, “While our North American business remains under pressure, second quarter sales trends improved month-to-month and our year-over-year top-line performance was meaningfully better compared with the first quarter. With continued headwinds facing consumer discretionary spending combined with a heightened promotional marketplace, we are pleased with the progress we’ve made positioning our business for the second half of 2023. The back-to-school season, which is historically a good indicator for holiday demand, is continuing to show improvement from the last few quarters. Despite the challenges year-to-date, we are confident that the global consumer centric operating model we have built and refined over the past four decades will continue to deliver great long-term value for our shareholders.”
Third Quarter To-Date
Total third quarter-to-date sales for the 37 days ending September 4, 2023 decreased 7.7%, compared with the same 37-day time period in the prior year ended September 5, 2022. Total comparable sales for the 37-day period ending September 4, 2023 were down 8.6% from the comparable period in the prior year.
Fiscal 2023 Third Quarter Outlook
The Company is introducing guidance for the three months ending October 28, 2023. Net sales are projected to be in the range of $211 to $216 million. Consolidated operating margins are expected to between negative 1.5% and negative 2.5% resulting in a loss per diluted share of approximately $0.15 to $0.25.
The Company currently intends to open approximately 19 new stores in fiscal 2023, including up to 5 stores in North America, 10 stores in Europe and 4 stores in Australia.
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 August 26, 2023, we operated 761 stores, including 609 in the United States, 49 in Canada, 81 in Europe and 22 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 | ||||||||||||||
| July 29, 2023 | % of Sales | July 30, 2022 | % of Sales | |||||||||||
| Net sales | $ | 194,438 | 100.0 | % | $ | 219,993 | 100.0 | % | ||||||
| Cost of goods sold | 132,760 | 68.3 | % | 144,929 | 65.9 | % | ||||||||
| Gross profit | 61,678 | 31.7 | % | 75,064 | 34.1 | % | ||||||||
| Selling, general and administrative expenses | 72,171 | 37.1 | % | 70,109 | 31.8 | % | ||||||||
| Operating (loss) profit | (10,493 | ) | -5.4 | % | 4,955 | 2.3 | % | |||||||
| Interest income, net | 775 | 0.4 | % | 358 | 0.1 | % | ||||||||
| Other income, net | 423 | 0.2 | % | 233 | 0.1 | % | ||||||||
| (Loss) earnings before income taxes | (9,295 | ) | -4.8 | % | 5,546 | 2.5 | % | |||||||
| (Benefit from) provision for income taxes | (786 | ) | -0.4 | % | 2,479 | 1.1 | % | |||||||
| Net (loss) income | $ | (8,509 | ) | -4.4 | % | $ | 3,067 | 1.4 | % | |||||
| Basic (loss) earnings per share | $ | (0.44 | ) | $ | 0.16 | |||||||||
| Diluted (loss) earnings per share | $ | (0.44 | ) | $ | 0.16 | |||||||||
| Weighted average shares used in computation of (loss) earnings per share: | ||||||||||||||
| Basic | 19,311 | 19,084 | ||||||||||||
| Diluted | 19,311 | 19,262 | ||||||||||||
| Six Months Ended | ||||||||||||||
| July 29, 2023 | % of Sales | July 30, 2022 | % of Sales | |||||||||||
| Net sales | $ | 377,325 | 100.0 | % | $ | 440,679 | 100.0 | % | ||||||
| Cost of goods sold | 266,290 | 70.6 | % | 293,242 | 66.5 | % | ||||||||
| Gross profit | 111,035 | 29.4 | % | 147,437 | 33.5 | % | ||||||||
| Selling, general and administrative expenses | 142,881 | 37.8 | % | 141,985 | 32.3 | % | ||||||||
| Operating (loss) profit | (31,846 | ) | -8.4 | % | 5,452 | 1.2 | % | |||||||
| Interest income, net | 1,632 | 0.4 | % | 850 | 0.2 | % | ||||||||
| Other (expense) income, net | (118 | ) | 0.0 | % | 405 | 0.1 | % | |||||||
| (Loss) earnings before income taxes | (30,332 | ) | -8.0 | % | 6,707 | 1.5 | % | |||||||
| (Benefit from) provision for income taxes | (3,441 | ) | -0.9 | % | 4,037 | 0.9 | % | |||||||
| Net (loss) income | $ | (26,891 | ) | -7.1 | % | $ | 2,670 | 0.6 | % | |||||
| Basic (loss) earnings per share | $ | (1.40 | ) | $ | 0.14 | |||||||||
| Diluted (loss) earnings per share | $ | (1.40 | ) | $ | 0.14 | |||||||||
| Weighted average shares used in computation of (loss) earnings per share: | ||||||||||||||
| Basic | 19,254 | 19,308 | ||||||||||||
| Diluted | 19,254 | 19,592 | ||||||||||||
| ZUMIEZ INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) | ||||||||||||
| July 29, 2023 | January 28, 2023 | July 30, 2022 | ||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| Assets | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | $ | 57,854 | $ | 81,503 | $ | 59,144 | ||||||
| Marketable securities | 82,128 | 91,986 | 107,036 | |||||||||
| Receivables | 23,910 | 20,613 | 24,201 | |||||||||
| Inventories | 156,654 | 134,824 | 151,071 | |||||||||
| Prepaid expenses and other current assets | 14,523 | 11,252 | 14,053 | |||||||||
| Total current assets | 335,069 | 340,178 | 355,505 | |||||||||
| Fixed assets, net | 94,193 | 93,746 | 91,196 | |||||||||
| Operating lease right-of-use assets | 221,538 | 222,240 | 228,243 | |||||||||
| Goodwill | 56,889 | 56,566 | 54,017 | |||||||||
| Intangible assets, net | 14,409 | 14,443 | 13,679 | |||||||||
| Deferred tax assets, net | 12,161 | 8,205 | 6,546 | |||||||||
| Other long-term assets | 11,575 | 12,525 | 11,425 | |||||||||
| Total long-term assets | 410,765 | 407,725 | 405,106 | |||||||||
| Total assets | $ | 745,834 | $ | 747,903 | $ | 760,611 | ||||||
| Liabilities and Shareholders’ Equity | ||||||||||||
| Current liabilities | ||||||||||||
| Trade accounts payable | $ | 69,773 | $ | 40,379 | $ | 72,915 | ||||||
| Accrued payroll and payroll taxes | 14,608 | 16,321 | 16,970 | |||||||||
| Operating lease liabilities | ||||||||||||
