Zumiez Inc. Announces Fiscal 2017 Second Quarter Results
September 07 2017 - 4:05PM
Second Quarter 2017 Sales Increased 7.8%
to $192.2 Million
Zumiez Inc. (NASDAQ:ZUMZ) today reported results for the second
quarter ended July 29, 2017.
Total net sales for the second quarter ended July 29, 2017 (13
weeks) increased 7.8% to $192.2 million from $178.3 million in the
quarter ended July 30, 2016 (13 weeks). Comparable sales for the
thirteen weeks ended July 29, 2017 increased 4.7% compared to a
comparable sales decrease of 4.9% for the thirteen weeks ended July
30, 2016. Net loss for the second quarter of fiscal 2017 was $0.6
million, or $0.02 per diluted share, compared to a net loss of $0.8
million, or $0.03 per diluted share in the second quarter of the
prior fiscal year.
Total net sales for the six months (26 weeks) ended July 29,
2017 increased 6.3% to $373.4 million from $351.2 million reported
for the six months (26 weeks) ended July 30, 2016. Comparable sales
increased 3.3% for the twenty-six weeks ended July 29, 2017
compared to a comparable sales decrease of 6.2% for the twenty-six
weeks ended July 30, 2016. Net loss for the first six months of
fiscal 2017 was $5.1 million, or $0.21 per diluted share, compared
to a net loss for the first six months of the prior fiscal year of
$3.0 million, or $0.12 per diluted share.
At July 29, 2017, the Company had cash and current marketable
securities of $70.7 million compared to cash and current marketable
securities of $52.3 million at July 30, 2016. The increase in cash
and current marketable securities was driven by cash generated
through operations partially offset by capital expenditures and
cash used in the acquisition of Fast Times.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated,
"Our business outperformed our expectations during the second
quarter highlighted by a 4.7% comparable sales increase. I am
extremely pleased with how well our teams continue to execute in
the current environment. Our intense focus on serving our consumer
with differentiated assortments and great service is fueling market
share gains and strengthening our leadership position in the
industry. We will continue to invest in our people and omni-channel
capabilities while tightly controlling expenses as we look to
consistently drive profitable growth and increased shareholder
value over the long-term.”
August 2017 Sales Total net sales for the four-week
period ended August 26, 2017 increased 10.1% to $98.6 million,
compared to $89.5 million for the four-week period ended August 27,
2016. The Company's comparable sales increased 7.4% for the
four-week period ended August 26, 2017 compared to a comparable
sales decrease of 1.1% for the four-week period ended August 27,
2016.
Fiscal 2017 Third Quarter Outlook The Company is
introducing guidance for the three months ending October 28, 2017.
Net sales are projected to be in the range of $236 to $241 million
resulting in net income per diluted share of approximately $0.43 to
$0.48. This guidance is based upon anticipated comparable sales
growth between 4% and 6% for the third quarter of fiscal 2017. The
Company currently intends to open approximately 18 new stores in
fiscal 2017, including up to 3 stores in Canada and 4 stores in
Europe and 2 stores in Australia.
A conference call will be held today to discuss second quarter
fiscal 2017 results and will be webcast at 5:00 p.m. ET on
http://ir.zumiez.com. Participants may also dial (574) 990-9934
followed by the conference identification code of 78719001.
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, 2017 we operated 693 stores, including 606 in the
United States, 51 in Canada, and 30 in Europe and 6 in Australia.
We operate under the names Zumiez, Blue Tomato and Fast Times.
Additionally, we operate ecommerce web sites at www.zumiez.com,
www.blue-tomato.com and https://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
quarterly report on Form 10-Q for the quarter ended April 29, 2017
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
INCOME |
(In thousands, except per share
amounts) |
(Unaudited) |
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
|
|
July 29,
2017 |
|
% of Sales |
|
July 30, 2016 |
|
% of Sales |
Net sales |
$ |
192,245 |
|
|
100.0 |
% |
|
$ |
178,272 |
|
|
100.0 |
% |
Cost of goods sold |
132,449 |
|
|
68.9 |
% |
|
|
123,428 |
|
|
69.2 |
% |
Gross
profit |
59,796 |
|
|
31.1 |
% |
|
54,844 |
|
|
30.8 |
% |
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
60,558 |
|
|
31.5 |
% |
|
55,980 |
|
|
31.5 |
% |
Operating
loss |
(762 |
) |
|
(0.4 |
%) |
|
(1,136 |
) |
|
(0.7 |
%) |
|
|
|
|
|
|
|
|
Interest income,
net |
92 |
|
|
0.0 |
% |
|
28 |
|
|
0.0 |
% |
Other expense, net |
(23 |
) |
|
0.0 |
% |
|
(256 |
) |
|
(0.1 |
%) |
Loss before
income taxes |
(693 |
) |
|
(0.4 |
%) |
|
(1,364 |
) |
|
(0.8 |
%) |
|
|
|
|
|
|
|
|
Benefit from income
taxes |
(85 |
) |
|
(0.1 |
%) |
|
(526 |
) |
|
(0.3 |
%) |
|
|
|
|
|
|
|
|
|
|
Net
loss |
$ |
(608 |
) |
|
(0.3 |
%) |
|
$ |
(838 |
) |
|
(0.5 |
%) |
|
|
|
|
|
|
|
|
Basic loss per
share |
$ |
(0.02 |
) |
|
|
|
$ |
(0.03 |
) |
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share |
$ |
(0.02 |
) |
|
|
|
$ |
(0.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
used in computation of loss per share: |
|
|
|
|
|
|
|
Basic |
24,689 |
|
|
|
|
24,712 |
|
|
|
|
|
|
|
|
|
|
|
Diluted |
24,689 |
|
|
|
|
24,712 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ZUMIEZ INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME |
(In thousands, except per share
amounts) |
|
|
Six Months Ended |
|
|
|
|
|
|
|
|
|
|
|
July 29,
2017 |
|
% of Sales |
|
July 30,
2016 |
|
% of Sales |
Net sales |
$ |
373,399 |
|
|
100.0 |
% |
|
$ |
351,243 |
|
|
100.0 |
% |
Cost of goods sold |
261,555 |
|
|
70.0 |
% |
|
246,440 |
|
|
70.2 |
% |
Gross
profit |
111,844 |
|
|
30.0 |
% |
|
104,803 |
|
|
29.8 |
% |
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
118,841 |
|
|
31.9 |
% |
|
109,879 |
|
|
31.2 |
% |
Operating
loss |
(6,997 |
) |
|
(1.9 |
%) |
|
(5,076 |
) |
|
(1.4 |
%) |
|
|
|
|
|
|
|
|
Interest income,
net |
174 |
|
|
0.0 |
% |
|
59 |
|
|
0.0 |
% |
Other (expense) income,
net |
(472 |
) |
|
(0.1 |
%) |
|
242 |
|
|
0.1 |
% |
Loss before
income taxes |
(7,295 |
) |
|
(2.0 |
%) |
|
(4,775 |
) |
|
(1.3 |
%) |
|
|
|
|
|
|
|
|
Benefit from income
taxes |
(2,239 |
) |
|
(0.6 |
%) |
|
(1,800 |
) |
|
(0.5 |
%) |
|
|
|
|
|
|
|
|
|
|
Net
Loss |
$ |
(5,056 |
) |
|
(1.4 |
%) |
|
$ |
(2,975 |
) |
|
(0.8 |
%) |
|
|
|
|
|
|
|
|
Basic loss per
share |
$ |
(0.21 |
) |
|
|
|
$ |
(0.12 |
) |
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share |
$ |
(0.21 |
) |
|
|
|
$ |
(0.12 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
used in computation of loss per share: |
|
|
|
|
|
|
|
Basic |
24,635 |
|
|
|
|
24,957 |
|
|
|
|
|
|
|
|
|
|
|
Diluted |
24,635 |
|
|
|
|
24,957 |
|
|
|
|
|
|
|
|
|
|
|
|
|
ZUMIEZ INC. |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
July 29, |
|
January 28, |
|
July 30, |
2017 |
2017 |
|
2016 |
Assets |
(Unaudited) |
|
|
|
(Unaudited) |
Current
assets |
|
|
|
|
|
|
Cash and cash
equivalents |
$ |
17,291 |
|
|
$ |
20,247 |
|
|
$ |
19,600 |
|
Marketable
securities |
53,433 |
|
|
58,579 |
|
|
32,740 |
|
Receivables |
16,334 |
|
|
12,538 |
|
|
14,576 |
|
Inventories |
141,782 |
|
|
106,924 |
|
|
131,823 |
|
Prepaid expenses and
other current assets |
15,378 |
|
|
13,075 |
|
|
13,990 |
|
Total current assets |
244,218 |
|
|
211,363 |
|
|
212,729 |
|
|
|
|
|
|
|
Fixed assets, net |
131,934 |
|
|
129,651 |
|
|
136,505 |
|
Goodwill |
60,057 |
|
|
56,001 |
|
|
55,082 |
|
Intangible assets,
net |
15,903 |
|
|
14,610 |
|
|
|
12,005 |
|
Deferred tax assets,
net |
9,733 |
|
|
7,041 |
|
|
|
8,332 |
|
Other long-term
assets |
7,022 |
|
|
|
8,017 |
|
|
7,908 |
|
Total long-term assets |
224,649 |
|
|
215,320 |
|
|
219,832 |
|
|
|
|
|
|
|
Total assets |
$ |
468,867 |
|
|
$ |
426,683 |
|
|
$ |
432,561 |
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity |
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
Trade accounts
payable |
$ |
60,652 |
|
|
$ |
25,529 |
|
|
$ |
60,044 |
|
Accrued payroll and
payroll taxes |
15,684 |
|
|
14,914 |
|
|
|
12,754 |
|
Income taxes
payable |
68 |
|
|
1,866 |
|
|
507 |
|
Deferred rent and
tenant allowances |
8,393 |
|
|
8,344 |
|
|
8,384 |
|
Other liabilities |
23,657 |
|
|
22,944 |
|
|
22,089 |
|
Total current liabilities |
108,454 |
|
|
73,597 |
|
|
103,778 |
|
|
|
|
|
|
|
Long-term deferred rent
and tenant allowances |
40,795 |
|
|
41,066 |
|
|
43,721 |
|
Other long-term
liabilities |
5,113 |
|
|
4,969 |
|
|
4,815 |
|
Total long-term liabilities |
45,908 |
|
|
46,035 |
|
|
48,536 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
154,362 |
|
|
119,632 |
|
|
152,314 |
|
|
|
|
|
|
|
Shareholders’
equity |
|
|
|
|
|
Preferred stock, no par
value, 20,000 shares authorized; none issued and outstanding |
— |
|
|
— |
|
|
— |
|
Common
stock, no par value, 50,000 shares authorized; 25,231 shares
issued and outstanding at July 29, 2017, 24,945 shares issued and
outstanding at January 28, 2017, and 24,931 shares issued and
outstanding at July 30, 2016 |
143,682 |
|
|
140,984 |
|
|
137,102 |
|
Accumulated other
comprehensive loss |
(6,676 |
) |
|
(16,488 |
) |
|
(12,802 |
) |
Retained earnings |
177,499 |
|
|
182,555 |
|
|
155,947 |
|
Total shareholders’ equity |
314,505 |
|
|
307,051 |
|
|
280,247 |
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
$ |
468,867 |
|
|
$ |
426,683 |
|
|
$ |
432,561 |
|
|
|
|
|
|
|
|
|
|
ZUMIEZ INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(In thousands) |
|
|
Six Months Ended |
|
July 29, 2017 |
|
July 30, 2016 |
Cash flows from
operating activities: |
|
|
|
Net loss |
$ |
(5,056 |
) |
|
$ |
(2,975 |
) |
Adjustments to
reconcile net loss to net cash provided by operating
activities: |
|
|
|
Depreciation,
amortization and accretion |
|
13,520 |
|
|
|
14,336 |
|
Deferred taxes |
|
(2,456 |
) |
|
|
(3,713 |
) |
Stock-based
compensation expense |
|
2,500 |
|
|
|
2,221 |
|
Other |
|
621 |
|
|
|
95 |
|
Changes
in operating assets and liabilities: |
|
|
|
Receivables |
|
(2,092 |
) |
|
|
(842 |
) |
Inventories |
|
(32,553 |
) |
|
|
(32,766 |
) |
Prepaid
expenses and other current assets |
|
(995 |
) |
|
|
(2,690 |
) |
Trade
accounts payable |
|
34,627 |
|
|
|
38,181 |
|
Accrued
payroll and payroll taxes |
|
561 |
|
|
|
225 |
|
Income
taxes payable |
|
(3,372 |
) |
|
|
(4,804 |
) |
Deferred
rent and tenant allowances |
|
(521 |
) |
|
|
(12 |
) |
Other
liabilities |
|
(1,016 |
) |
|
|
(813 |
) |
Net cash
provided by operating activities |
|
3,768 |
|
|
|
6,443 |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Additions to fixed
assets |
|
(12,461 |
) |
|
|
(11,895 |
) |
Purchases of marketable
securities and other investments |
|
(37,586 |
) |
|
|
(28,353 |
) |
Sales and maturities of
marketable securities and other investments |
|
42,615 |
|
|
|
28,658 |
|
Net cash used
in investing activities |
|
(7,432 |
) |
|
|
(11,590 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Proceeds from revolving
credit facilities |
|
1,791 |
|
|
|
- |
|
Payments on revolving
credit facilities |
|
(1,791 |
) |
|
|
- |
|
Repurchase of common
stock |
|
- |
|
|
|
(19,084 |
) |
Proceeds from issuance
and exercise of stock-based awards |
|
370 |
|
|
|
518 |
|
Payments for tax
withholdings on equity awards |
|
(172 |
) |
|
|
(121 |
) |
Net cash
provided by (used in) financing activities |
|
198 |
|
|
|
(18,687 |
) |
|
|
|
|
Effect of
exchange rate changes on cash and cash equivalents |
|
510 |
|
|
|
271 |
|
|
|
|
|
Net decrease in
cash and cash equivalents |
|
(2,956 |
) |
|
|
(23,563 |
) |
Cash and cash equivalents, beginning of
period |
|
20,247 |
|
|
|
43,163 |
|
Cash and cash equivalents, end of period |
$ |
17,291 |
|
|
$ |
19,600 |
|
|
|
|
|
Supplemental disclosure on cash flow
information: |
|
|
|
Cash paid
during the period for income taxes |
$ |
3,660 |
|
|
$ |
6,736 |
|
Accrual
for purchases of fixed assets |
|
2,550 |
|
|
|
1,835 |
|
Accrual
for repurchase of common stock |
|
- |
|
|
|
254 |
|
|
|
|
|
Company Contact:
Darin White
Director of Finance &
Investor Relations
Zumiez Inc.
(425) 551-1500, ext. 1337
Investor Contact:
ICR
Brendon Frey
(203) 682-8200
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