ZUMZ Zumiez Inc

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-DateTotal 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 OutlookThe 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 StatementCertain 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 WhiteVice President of Finance & Investor RelationsZumiez Inc.(425) 551-1500, ext. 1337

Investor Contact:ICRBrendon Frey (203) 682-8200