Zumiez Inc. (NASDAQ: ZUMZ) a leading specialty retailer of apparel,
footwear, equipment and accessories for young men and women, today
reported results for the fourth quarter and fiscal year ended
February 3, 2024.
Net sales for the fourth quarter ended February 3, 2024 (14
weeks) increased 0.6% to $281.8 million from $280.1 million in the
fourth quarter ended January 28, 2023 (13 weeks). Net loss in the
fourth quarter of fiscal 2023 was $33.5 million, or $1.73 per
share, compared to net income of $11.4 million, or $0.59 per
diluted share, in the fourth quarter of the prior fiscal year.
Fiscal 2023 fourth quarter results reflect a goodwill impairment
charge of $41.1 million, or $2.13 per share
after-tax, related to the Company’s decision to slow store growth
and focus on profitability in Europe and the corresponding impact
on the future cash flow projections of its Blue Tomato
business.
Total net sales for the twelve months (53 weeks) ended February
3, 2024 decreased 8.6% to $875.5 million from $958.4 million
reported for the twelve months (52 weeks) ended January 28, 2023.
Net loss for fiscal 2023 inclusive of the $41.1 million goodwill
impairment charge was $62.6 million, or $3.25 per share, compared
to net income for fiscal 2022 of $21.0 million, or $1.08 per
diluted share.
At February 3, 2024, the Company had cash and current marketable
securities of $171.6 million compared to cash and current
marketable securities of $173.5 million at January 28, 2023. The
slight decrease was primarily driven by capital expenditures,
offset by cash flow from operating activities.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, “We
concluded a difficult year with stronger than anticipated fourth
quarter results as our consolidated monthly sales trend accelerated
in January. Within our recent performance, there were multiple
areas that showed a marked improvement, led by our North American
men’s business which grew year-over-year in the fourth quarter.
While we are encouraged by our stronger than anticipated fourth
quarter and sustained quarterly improvements as we moved through
the year, the global operating environment remains challenging and
therefore we are further adjusting our strategies to balance the
interests of our shareholders and customers. For 2024, this
includes slowing store growth in Europe and focusing on increasing
the productivity of our current footprint in the region. We are
also continuing to close underperforming stores in the U.S.,
reducing labor costs to align with lower revenue levels, and
looking to drive even greater efficiencies throughout the
organization. At the same time, we’ll invest to ensure we are
winning with the consumer by launching new, highly sought-after
brands, maintaining our best-in-class service levels, and
strengthening our customer connections. We have successfully
navigated down cycles before and I am confident in our teams’
ability to return the Company to growth and enhanced profitability
both in the near-term and the years ahead.”
Fiscal First Quarter-to-Date Sales Total first quarter-to-date
sales for the four weeks ended March 2, 2024 decreased 3.1%, from
the four weeks ended February 25, 2023. Comparable sales for the
four weeks ended March 2, 2024 decreased 6.2% from the four weeks
ended March 4, 2023. From a regional perspective, comparable sales
for North America decreased 2.6% and other international comparable
sales decreased 17.8%.
Fiscal 2023 First Quarter OutlookThe Company is introducing
guidance for the three months ending May 4, 2024. Net sales are
projected to be in the range of $167 to $172 million. Earnings per
share are expected to be between a loss of $1.09 and a loss of
$1.19.
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.
Conference call Information To access the conference call,
please pre-register (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 March 2, 2024, we operated 753 stores, including 594 in the
United States, 47 in Canada, 87 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 OPERATIONS(In thousands, except per
share amounts)(Unaudited) |
|
|
|
|
|
|
Three Months Ended |
|
|
February 3, |
|
% of |
|
January 28, |
|
% of |
|
|
2024 |
|
Sales |
|
2023 |
|
Sales |
|
|
|
(Unaudited) |
|
|
|
(Unaudited) |
|
|
Net sales |
|
$ |
281,822 |
|
|
100.0 |
% |
|
|
280,110 |
|
|
100.0 |
% |
Cost of
goods sold |
|
|
185,171 |
|
|
65.7 |
% |
|
|
184,841 |
|
|
66.0 |
% |
Gross profit |
|
|
96,651 |
|
|
34.3 |
% |
|
|
95,269 |
|
|
34.0 |
% |
Selling,
general and administrative expenses |
|
|
129,436 |
|
|
45.9 |
% |
|
|
80,059 |
|
|
28.6 |
% |
Operating (loss) profit |
|
|
(32,785 |
) |
|
-11.6 |
% |
|
|
15,210 |
|
|
5.4 |
% |
Interest
income, net |
|
|
941 |
|
|
0.3 |
% |
|
|
645 |
|
|
0.2 |
% |
Other income
(expense), net |
|
|
545 |
|
|
0.2 |
% |
|
|
293 |
|
|
0.1 |
% |
(Loss) Earnings before income taxes |
|
|
(31,299 |
) |
|
-11.1 |
% |
|
|
16,148 |
|
|
5.8 |
% |
Provision
for income taxes |
|
|
2,188 |
|
|
0.8 |
% |
|
|
4,716 |
|
|
1.7 |
% |
Net
(loss) income |
|
$ |
(33,487 |
) |
|
-11.9 |
% |
|
$ |
11,432 |
|
|
4.1 |
% |
Basic
earnings per share |
|
$ |
(1.73 |
) |
|
|
|
$ |
0.60 |
|
|
|
Diluted
earnings per share |
|
$ |
(1.73 |
) |
|
|
|
$ |
0.59 |
|
|
|
Weighted
average shares used in computation of earnings per share: |
|
|
|
|
|
|
|
Basic |
|
|
19,323 |
|
|
|
|
|
19,114 |
|
|
|
Diluted |
|
|
19,323 |
|
|
|
|
|
19,255 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended |
|
|
February 3, |
|
% of |
|
January 28, |
|
% of |
|
|
2024 |
|
Sales |
|
2023 |
|
Sales |
|
|
|
(Unaudited) |
|
|
|
|
|
|
Net
sales |
|
$ |
875,486 |
|
|
100.0 |
% |
|
$ |
958,380 |
|
|
100.0 |
% |
Cost of
goods sold |
|
|
594,596 |
|
|
67.9 |
% |
|
|
633,702 |
|
|
66.1 |
% |
Gross profit |
|
|
280,890 |
|
|
32.1 |
% |
|
|
324,678 |
|
|
33.9 |
% |
Selling,
general and administrative expenses |
|
|
345,679 |
|
|
39.5 |
% |
|
|
293,578 |
|
|
30.7 |
% |
Operating (loss) profit |
|
|
(64,789 |
) |
|
-7.4 |
% |
|
|
31,100 |
|
|
3.2 |
% |
Interest
income, net |
|
|
3,522 |
|
|
0.4 |
% |
|
|
1,924 |
|
|
0.2 |
% |
Other
expense, net |
|
|
(611 |
) |
|
-0.1 |
% |
|
|
(557 |
) |
|
-0.1 |
% |
(Loss) Earnings before income taxes |
|
|
(61,878 |
) |
|
-7.1 |
% |
|
|
32,467 |
|
|
3.4 |
% |
Provision
for income taxes |
|
|
732 |
|
|
0.1 |
% |
|
|
11,433 |
|
|
1.2 |
% |
Net
(loss) income |
|
$ |
(62,610 |
) |
|
-7.2 |
% |
|
$ |
21,034 |
|
|
2.2 |
% |
Basic
earnings per share |
|
$ |
(3.25 |
) |
|
|
|
$ |
1.10 |
|
|
|
Diluted
earnings per share |
|
$ |
(3.25 |
) |
|
|
|
$ |
1.08 |
|
|
|
Weighted
average shares used in computation of earnings per share: |
|
|
|
|
|
|
|
Basic |
|
|
19,290 |
|
|
|
|
|
19,208 |
|
|
|
Diluted |
|
|
19,290 |
|
|
|
|
|
19,428 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ZUMIEZ
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(In thousands) |
|
|
|
|
|
|
|
February 3,2024 |
|
January 28,2023 |
|
|
(Unaudited) |
|
|
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
88,875 |
|
|
$ |
81,503 |
|
Marketable
securities |
|
|
82,704 |
|
|
|
91,986 |
|
Receivables |
|
|
13,780 |
|
|
|
20,613 |
|
Inventories |
|
|
128,827 |
|
|
|
134,824 |
|
Prepaid
expenses and other current assets |
|
|
12,401 |
|
|
|
11,252 |
|
Total current assets |
|
|
326,587 |
|
|
|
340,178 |
|
Fixed
assets, net |
|
|
90,508 |
|
|
|
93,746 |
|
Operating
lease right-of-use assets |
|
|
196,775 |
|
|
|
222,240 |
|
Goodwill |
|
|
15,374 |
|
|
|
56,566 |
|
Intangible
assets, net |
|
|
14,200 |
|
|
|
14,443 |
|
Deferred tax
assets, net |
|
|
8,623 |
|
|
|
8,205 |
|
Other
long-term assets |
|
|
12,159 |
|
|
|
12,525 |
|
Total long-term assets |
|
|
337,639 |
|
|
|
407,725 |
|
Total assets |
|
$ |
664,226 |
|
|
$ |
747,903 |
|
|
|
|
|
|
Liabilities and Shareholders’ Equity |
|
|
|
|
Current liabilities |
|
|
|
|
Trade
accounts payable |
|
$ |
38,885 |
|
|
$ |
40,379 |
|
Accrued
payroll and payroll taxes |
|
|
18,431 |
|
|
|
16,321 |
|
Operating
lease liabilities |
|
|
60,885 |
|
|
|
65,460 |
|
Other
liabilities |
|
|
25,886 |
|
|
|
23,649 |
|
Total current liabilities |
|
|
144,087 |
|
|
|
145,809 |
|
Long-term
operating lease liabilities |
|
|
159,877 |
|
|
|
188,835 |
|
Other
long-term liabilities |
|
|
7,052 |
|
|
|
5,931 |
|
Total long-term liabilities |
|
|
166,929 |
|
|
|
194,766 |
|
Total liabilities |
|
|
311,016 |
|
|
|
340,575 |
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
Preferred
stock, no par value, 20,000 shares authorized; none issued and
outstanding |
|
|
— |
|
|
|
— |
|
Common
stock, no par value, 50,000 shares authorized; 19,833 shares
issued and outstanding at February 3, 2024 and 19,489 shares issued
and outstanding at January 28, 2023 |
|
|
196,144 |
|
|
|
188,418 |
|
Accumulated
other comprehensive loss |
|
|
(19,027 |
) |
|
|
(19,793 |
) |
Retained
earnings |
|
|
176,093 |
|
|
|
238,703 |
|
Total shareholders’ equity |
|
|
353,210 |
|
|
|
407,328 |
|
Total liabilities and shareholders’ equity |
|
$ |
664,226 |
|
|
$ |
747,903 |
|
|
|
|
|
|
|
ZUMIEZ
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(In
thousands)(Unaudited) |
|
|
|
|
|
Fiscal Year Ended |
|
|
February 3,2024 |
|
January 28,2023 |
|
|
(Unaudited) |
|
|
Cash
flows from operating activities: |
|
|
|
|
Net (loss) income |
|
$ |
(62,610 |
) |
|
$ |
21,034 |
|
Adjustments
to reconcile net income to net cash (used in) provided by operating
activities: |
|
|
|
|
Depreciation, amortization and accretion |
|
|
22,763 |
|
|
|
21,626 |
|
Noncash
lease expense |
|
|
68,164 |
|
|
|
67,394 |
|
Deferred
taxes |
|
|
(1,050 |
) |
|
|
2,485 |
|
Stock-based
compensation expense |
|
|
7,022 |
|
|
|
6,991 |
|
Impairment
of goodwill and long-lived assets |
|
|
43,904 |
|
|
|
2,081 |
|
Other |
|
|
206 |
|
|
|
1,176 |
|
Changes in
operating assets and liabilities: |
|
|
- |
|
|
|
- |
|
Receivables |
|
|
6,859 |
|
|
|
(1,716 |
) |
Inventories |
|
|
5,809 |
|
|
|
(5,279 |
) |
Prepaid expenses and other assets |
|
|
(1,817 |
) |
|
|
(1,082 |
) |
Trade accounts payable |
|
|
(907 |
) |
|
|
(15,484 |
) |
Accrued payroll and payroll taxes |
|
|
2,170 |
|
|
|
(14,895 |
) |
Income taxes payable |
|
|
2,090 |
|
|
|
(2,320 |
) |
Operating lease liabilities |
|
|
(78,983 |
) |
|
|
(76,605 |
) |
Other liabilities |
|
|
1,135 |
|
|
|
(5,785 |
) |
Net
cash provided by (used in) operating activities |
|
|
14,755 |
|
|
|
(379 |
) |
Cash
flows from investing activities: |
|
|
|
|
Additions to
fixed assets |
|
|
(20,350 |
) |
|
|
(25,627 |
) |
Purchases of
marketable securities and other investments |
|
|
(38,348 |
) |
|
|
(1,914 |
) |
Sales and
maturities of marketable securities and other investments |
|
|
50,150 |
|
|
|
81,750 |
|
Net
cash (used in) provided by investing activities |
|
|
(8,548 |
) |
|
|
54,209 |
|
Cash
flows from financing activities: |
|
|
|
|
Proceeds
from revolving credit facilities |
|
|
49,440 |
|
|
|
22,688 |
|
Payments on
revolving credit facilities |
|
|
(49,440 |
) |
|
|
(22,688 |
) |
Proceeds
from issuance and exercise of stock-based awards |
|
|
704 |
|
|
|
1,111 |
|
Payments for
tax withholdings on equity awards |
|
|
— |
|
|
|
(508 |
) |
Common stock
repurchased |
|
|
— |
|
|
|
(87,860 |
) |
Net
cash provided by (used in) financing activities |
|
|
704 |
|
|
|
(87,257 |
) |
Effect of exchange rate changes on cash, cash equivalents,
and restricted cash |
|
|
(1,080 |
) |
|
|
(2,172 |
) |
Net
increase (decrease) in cash, cash equivalents, and restricted
cash |
|
|
5,831 |
|
|
|
(35,599 |
) |
Cash, cash equivalents, and restricted cash, beginning of
period |
|
|
88,453 |
|
|
|
124,052 |
|
Cash, cash equivalents, and restricted cash, end of
period |
|
$ |
94,284 |
|
|
$ |
88,453 |
|
Supplemental disclosure on cash flow
information: |
|
|
|
|
Cash paid
during the period for income taxes |
|
$ |
2,065 |
|
|
$ |
11,309 |
|
Accrual for
purchases of fixed assets |
|
|
800 |
|
|
|
1,433 |
|
|
|
|
|
|
See accompanying
notes to consolidated financial statements |
|
|
|
|
|
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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