Zumiez Inc. Announces Fiscal 2024 First Quarter Results

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 SalesNet 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 OutlookThe 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