Zumiez Inc. Announces Fiscal 2023 First Quarter Results
June 01 2023 - 3:05PM
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 April 29, 2023.
Net sales for the first quarter ended April 29, 2023 (13 weeks)
decreased 17.1% to $182.9 million from $220.7 million in the first
quarter ended April 30, 2022 (13 weeks). Net loss in
the first quarter of fiscal 2023 was $18.4 million, or $0.96 loss
per diluted share, compared to a net loss of $0.4 million, or $0.02
loss per diluted share, in the first quarter of the prior fiscal
year.
At April 29, 2023, the Company had cash and current marketable
securities of $155.3 million compared to cash and current
marketable securities of $173.0 million at April 30, 2022. The
decrease was driven by capital expenditures of $27.5 million over
this time period, offset by $11.2 million provided by operating
activities.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated,
“Our first quarter operating results were in-line with our outlook
and reflect the significant change in consumer purchasing behavior
that has occurred in the U.S. over the past year. While the
domestic demand environment and heightened promotional activity has
put pressure on our full-price selling model, we remain confident
that the strong connections we’ve forged with our customers through
Zumiez’s distinct brand culture, diverse and differentiated
merchandise offering, and world class service have us well
positioned for accelerated market share gains when we emerge from
the current economic cycle. At the same time, we continue to expand
our presence and evolve our capabilities in Europe and Australia
and are encouraged by our momentum in these regions and the global
foundation we are building for long-term, profitable growth.”
May 2023 SalesNet sales for the four-week period ended May 27,
2023 decreased 12.8% compared to the four-week period ended May 28,
2022. Comparable sales for the four-week period ending May 27, 2023
decreased 14.3% from the comparable period in the prior year.
Fiscal 2023 Second Quarter OutlookThe Company is introducing
guidance for the three months ending July 29, 2023. Net sales are
projected to be in the range of $187 to $192 million. Loss per
share is expected to be between $(0.63) to $(0.73).
The Company currently intends to open approximately 23 new
stores in fiscal 2023, including up to 8 stores in North America,
10 stores in Europe and 5 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 May 27, 2023, we operated 758 stores, including 608 in the
United States, 49 in Canada, 80 in Europe and 21 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 |
|
|
April 29, 2023 |
|
% of Sales |
|
|
April 30, 2022 |
|
% of Sales |
Net sales |
|
$ |
182,887 |
|
|
100.0 |
% |
|
$ |
220,686 |
|
|
100.0 |
% |
Cost of
goods sold |
|
|
133,529 |
|
|
73.0 |
% |
|
|
148,312 |
|
|
67.2 |
% |
Gross profit |
|
|
49,358 |
|
|
27.0 |
% |
|
|
72,374 |
|
|
32.8 |
% |
Selling,
general and administrative expenses |
|
|
70,712 |
|
|
38.7 |
% |
|
|
71,877 |
|
|
32.6 |
% |
Operating (loss) profit |
|
|
(21,354 |
) |
|
-11.7 |
% |
|
|
497 |
|
|
0.2 |
% |
Interest
income, net |
|
|
858 |
|
|
0.5 |
% |
|
|
492 |
|
|
0.2 |
% |
Other
(expense) income, net |
|
|
(541 |
) |
|
-0.3 |
% |
|
|
172 |
|
|
0.1 |
% |
(Loss) earnings before income taxes |
|
|
(21,037 |
) |
|
-11.5 |
% |
|
|
1,161 |
|
|
0.5 |
% |
(Benefit
from) provision for income taxes |
|
|
(2,655 |
) |
|
-1.4 |
% |
|
|
1,558 |
|
|
0.7 |
% |
Net
loss |
|
$ |
(18,382 |
) |
|
-10.1 |
% |
|
$ |
(397 |
) |
|
-0.2 |
% |
Basic loss
per share |
|
$ |
(0.96 |
) |
|
|
|
$ |
(0.02 |
) |
|
|
Diluted loss
per share |
|
$ |
(0.96 |
) |
|
|
|
$ |
(0.02 |
) |
|
|
Weighted
average shares used in computation of loss per share: |
|
|
|
|
|
|
|
|
Basic |
|
|
19,197 |
|
|
|
|
|
19,533 |
|
|
|
Diluted |
|
|
19,197 |
|
|
|
|
|
19,533 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ZUMIEZ
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(In thousands) |
|
|
|
|
|
|
|
|
|
April 29, 2023 |
|
January 28, 2023 |
|
April 30, 2022 |
|
|
(Unaudited) |
|
|
|
(Unaudited) |
Assets |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
66,655 |
|
|
$ |
81,503 |
|
|
$ |
62,501 |
|
Marketable
securities |
|
|
88,684 |
|
|
|
91,986 |
|
|
|
110,452 |
|
Receivables |
|
|
20,655 |
|
|
|
20,613 |
|
|
|
23,609 |
|
Inventories |
|
|
147,871 |
|
|
|
134,824 |
|
|
|
141,883 |
|
Prepaid
expenses and other current assets |
|
|
12,755 |
|
|
|
11,252 |
|
|
|
10,348 |
|
Total current assets |
|
|
336,620 |
|
|
|
340,178 |
|
|
|
348,793 |
|
Fixed
assets, net |
|
|
94,419 |
|
|
|
93,746 |
|
|
|
90,313 |
|
Operating
lease right-of-use assets |
|
|
216,091 |
|
|
|
222,240 |
|
|
|
240,052 |
|
Goodwill |
|
|
56,925 |
|
|
|
56,566 |
|
|
|
55,325 |
|
Intangible
assets, net |
|
|
14,404 |
|
|
|
14,443 |
|
|
|
14,091 |
|
Deferred tax
assets, net |
|
|
11,034 |
|
|
|
8,205 |
|
|
|
7,910 |
|
Other
long-term assets |
|
|
12,005 |
|
|
|
12,525 |
|
|
|
11,630 |
|
Total long-term assets |
|
|
404,878 |
|
|
|
407,725 |
|
|
|
419,321 |
|
Total assets |
|
$ |
741,498 |
|
|
$ |
747,903 |
|
|
$ |
768,114 |
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Trade
accounts payable |
|
$ |
59,551 |
|
|
$ |
40,379 |
|
|
$ |
65,108 |
|
Accrued
payroll and payroll taxes |
|
|
18,378 |
|
|
|
16,321 |
|
|
|
19,334 |
|
Operating
lease liabilities |
|
|
63,866 |
|
|
|
65,460 |
|
|
|
69,327 |
|
Other
liabilities |
|
|
19,298 |
|
|
|
23,649 |
|
|
|
24,528 |
|
Total current liabilities |
|
|
161,093 |
|
|
|
145,809 |
|
|
|
178,297 |
|
Long-term
operating lease liabilities |
|
|
182,507 |
|
|
|
188,835 |
|
|
|
207,953 |
|
Other
long-term liabilities |
|
|
6,055 |
|
|
|
5,931 |
|
|
|
4,967 |
|
Total long-term liabilities |
|
|
188,562 |
|
|
|
194,766 |
|
|
|
212,920 |
|
Total liabilities |
|
|
349,655 |
|
|
|
340,575 |
|
|
|
391,217 |
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
|
|
Preferred
stock, no par value, 20,000 shares authorized; none issued and
outstanding |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Common
stock, no par value, 50,000 shares authorized; 19,782 shares
issued and outstanding at April 29, 2023, 19,489 shares issued and
outstanding at January 28, 2023, and 19,459 shares issued and
outstanding at April 30, 2022 |
|
|
190,599 |
|
|
|
188,418 |
|
|
|
182,899 |
|
Accumulated
other comprehensive loss |
|
|
(19,077 |
) |
|
|
(19,793 |
) |
|
|
(23,274 |
) |
Retained
earnings |
|
|
220,321 |
|
|
|
238,703 |
|
|
|
217,272 |
|
Total shareholders’ equity |
|
|
391,843 |
|
|
|
407,328 |
|
|
|
376,897 |
|
Total liabilities and shareholders’ equity |
|
$ |
741,498 |
|
|
$ |
747,903 |
|
|
$ |
768,114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ZUMIEZ
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(In
thousands)(Unaudited) |
|
|
|
|
|
Three Months Ended |
|
|
April 29, 2023 |
|
April 30, 2022 |
Cash
flows from operating activities: |
|
|
|
|
Net loss |
|
$ |
(18,382 |
) |
|
$ |
(397 |
) |
Adjustments
to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
Depreciation, amortization and accretion |
|
|
5,379 |
|
|
|
5,416 |
|
Noncash
lease expense |
|
|
16,313 |
|
|
|
16,495 |
|
Deferred
taxes |
|
|
(2,912 |
) |
|
|
1,838 |
|
Stock-based
compensation expense |
|
|
1,906 |
|
|
|
1,700 |
|
Impairment
of long-lived assets |
|
|
312 |
|
|
|
- |
|
Other |
|
|
375 |
|
|
|
(72 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
Receivables |
|
|
1,030 |
|
|
|
(4,172 |
) |
Inventories |
|
|
(13,091 |
) |
|
|
(14,580 |
) |
Prepaid expenses and other assets |
|
|
(925 |
) |
|
|
(280 |
) |
Trade accounts payable |
|
|
18,868 |
|
|
|
9,672 |
|
Accrued payroll and payroll taxes |
|
|
2,087 |
|
|
|
(11,696 |
) |
Income taxes payable |
|
|
(301 |
) |
|
|
(4,987 |
) |
Operating lease liabilities |
|
|
(18,609 |
) |
|
|
(18,403 |
) |
Other liabilities |
|
|
(4,929 |
) |
|
|
(5,011 |
) |
Net
cash used in operating activities |
|
|
(12,879 |
) |
|
|
(24,477 |
) |
Cash
flows from investing activities: |
|
|
|
|
Additions to
fixed assets |
|
|
(5,438 |
) |
|
|
(3,562 |
) |
Purchases of
marketable securities and other investments |
|
|
(1,850 |
) |
|
|
(1,914 |
) |
Sales and
maturities of marketable securities and other investments |
|
|
5,571 |
|
|
|
64,041 |
|
Net
cash (used in) provided by investing activities |
|
|
(1,717 |
) |
|
|
58,565 |
|
Cash
flows from financing activities: |
|
|
|
|
Proceeds
from revolving credit facilities |
|
|
1,549 |
|
|
|
17,414 |
|
Payments on
revolving credit facilities |
|
|
(1,549 |
) |
|
|
(17,414 |
) |
Proceeds
from issuance and exercise of stock-based awards |
|
|
460 |
|
|
|
782 |
|
Payments for
tax withholdings on equity awards |
|
|
(185 |
) |
|
|
(407 |
) |
Common stock
repurchased |
|
|
— |
|
|
|
(87,860 |
) |
Net
cash provided by (used in) financing activities |
|
|
275 |
|
|
|
(87,485 |
) |
Effect of exchange rate changes on cash, cash equivalents,
and restricted cash |
|
|
(509 |
) |
|
|
(1,497 |
) |
Net
decrease in cash, cash equivalents, and restricted
cash |
|
|
(14,830 |
) |
|
|
(54,894 |
) |
Cash, cash equivalents, and restricted cash, beginning of
period |
|
|
88,453 |
|
|
|
124,052 |
|
Cash, cash equivalents, and restricted cash, end of
period |
|
$ |
73,623 |
|
|
$ |
69,158 |
|
Supplemental disclosure on cash flow
information: |
|
|
|
|
Cash paid during the period for income taxes |
|
$ |
536 |
|
|
$ |
4,657 |
|
Accrual for purchases of fixed assets |
|
|
2,323 |
|
|
|
2,530 |
|
|
|
|
|
|
Company Contact:Darin WhiteDirector of Finance
& Investor RelationsZumiez Inc.(425) 551-1500, ext. 1337
Investor Contact:ICRBrendon Frey (203)
682-8200
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