Second Quarter Comparable Sales Increased 3.6%

Second Quarter Gross Margin increased 250 basis points to 34.2%

Second Quarter Loss Per share improved to ($0.04) from ($0.44)

Third Quarter-to-date Comparable Sales up 12.1%

LYNNWOOD, Wash., Sept. 05, 2024 (GLOBE NEWSWIRE) -- Zumiez Inc. (NASDAQ:ZUMZ) a leading specialty retailer of apparel, footwear, equipment and accessories for young men and women, today reported results for the second quarter ended August 3, 2024.

Net sales for the second quarter ended August 3, 2024 (13 weeks) increased 8.1% to $210.2 million from $194.4 million in the second quarter ended July 29, 2023 (13 weeks). Comparable sales for the thirteen weeks ended August 3, 2024 increased 3.6%. The shift in the retail calendar had a positive impact on the second quarter results, increasing net sales growth by approximately 530 basis points. However, this shift will negatively affect net sales growth in the third quarter. Comparable sales growth, as reported, is adjusted for the calendar shift and provides a more accurate measure of operating performance. Net loss in the second quarter of fiscal 2024 was $0.8 million, or $0.04 per share, compared to a net loss of $8.5 million, or $0.44 per share, in the second quarter of the prior fiscal year.

Total net sales for the six months (26 weeks) ended August 3, 2024 increased 2.7% to $387.6 million from $377.3 million reported for the six months (26 weeks) ended July 29, 2023. The retail calendar shift positively impacted net sales growth by approximately 310 basis points year-to-date. Comparable sales increased 0.8% for the twenty-six weeks ended August 3, 2024. Net loss for the first six months of fiscal 2024 was $17.6 million, or $0.91 per share, compared to a net loss for the first six months of fiscal 2023 of $26.9 million, or $1.40 per share.

At August 3, 2024, the Company had cash and current marketable securities of $127.0 million compared to cash and current marketable securities of $140.0 million at July 29, 2023. The decrease was primarily driven by share repurchases and capital expenditures partially offset by cash flow from operations. The Company repurchased 0.9 million shares during the quarter at an average cost of $20.55 per share and a total cost of $19.4 million.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "We experienced a noticeable acceleration in our sales trend as the second quarter unfolded, with July North America comparable sales increasing in the high-single digits. The work our merchandise teams have done refining our apparel and footwear assortments combined with enhanced customer engagement tactics from our in-store and online sales associates led to better than expected second quarter results and a strong back-to-school season in North America. With back-to-school a good indicator for holiday demand in the past, we are encouraged about our prospects for growth over the remainder of fiscal 2024. Looking farther ahead, we are confident that our global customer centric operating model has the Company positioned to continue building on the progress we've made towards delivering enhanced value for our shareholders in the years to come."

Third Quarter To-Date

Third quarter-to-date net sales for the 30 days ending September 2, 2024 increased 6.8%, compared with the 30 day time period in the prior year ended August 28, 2023. Total comparable sales for the 30-day period ending September 2, 2024, adjusted to exclude the impact of the calendar shift, were up 12.1% from the comparable period in the prior year.

Fiscal 2024 Third Quarter Outlook

The Company is introducing guidance for the three months ending November 2, 2024. Net sales are projected to be in the range of $221 to $225 million representing growth of between 2% and 4% from the third quarter in the prior year. Adjusting for the impact of the calendar shift, net sales are expected to grow between 7% and 9% compared to the same weeks in the prior year. Consolidated operating margins are expected to be between 0.2% and 1.2% with earnings per share results between a loss of ($0.04) and income of $0.06.

The Company currently intends to open approximately 9 new stores in fiscal 2024, including up to 3 stores in North America, 3 stores in Europe and 3 stores in Australia and close approximately 25 stores 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 August 31, 2024, we operated 752 stores, including 593 in the United States, 46 in Canada, 86 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 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.

Company Contact:

Darin White

Director of Finance &

Investor Relations

Zumiez Inc.

(425) 551-1500, ext. 1337

Investor Contact:

ICR

Brendon Frey

(203) 682-8200


ZUMIEZ INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited)

	Three Months Ended
	August 3, 2024			% of Sales			July 29, 2023		% of Sales
Net sales	$	210,179		100.0	%	$	194,438		100.0	%
Cost of goods sold		138,385		65.8	%		132,760		68.3	%
Gross profit		71,794		34.2	%		61,678		31.7	%
Selling, general and administrative expenses		72,187		34.4	%		72,171		37.1	%
Operating loss		(393	)	-0.2	%		(10,493	)	-5.4	%
Interest income, net		1,128		0.6	%		775		0.4	%
Other (expense) income, net		(179	)	-0.1	%		423		0.2	%
Income (loss) before income taxes		556		0.3	%		(9,295	)	-4.8	%
Benefit from (provision for) income taxes		1,403		0.7	%		(786	)	-0.4	%
Net loss	$	(847	)	-0.4	%	$	(8,509	)	-4.4	%
Basic loss per share	$	(0.04	)			$	(0.44	)
Diluted loss per share	$	(0.04	)			$	(0.44	)
Weighted average shares used in computation of loss per share:
Basic		19,284					19,311
Diluted		19,284					19,311

	Six Months Ended
	August 3, 2024			% of Sales			July 29, 2023		% of Sales
Net sales	$	387,567		100.0	%	$	377,325		100.0	%
Cost of goods sold		263,874		68.1	%		266,290		70.6	%
Gross profit		123,693		31.9	%		111,035		29.4	%

Selling, general and administrative expenses		144,240		37.2	%		142,881		37.8	%
Operating loss		(20,547	)	-5.3	%		(31,846	)	-8.4	%
Interest income, net		2,449		0.6	%		1,632		0.4	%
Other expense, net		(946	)	-0.2	%		(118	)	0.0	%
Loss before income taxes		(19,044	)	-4.9	%		(30,332	)	-8.0	%
Provision for income taxes		(1,417	)	-0.4	%		(3,441	)	-0.9	%
Net loss	$	(17,627	)	-4.5	%	$	(26,891	)	-7.1	%

Basic loss per share	$	(0.91	)			$	(1.40	)
Diluted loss per share	$	(0.91	)			$	(1.40	)
Weighted average shares used in computation of loss per share:
Basic		19,375					19,254
Diluted		19,375					19,254


ZUMIEZ INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)

	August 3, 2024			February 3, 2024			July 29, 2023
	(Unaudited)						(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	65,766		$	88,875		$	57,854
Marketable securities		61,194			82,704			82,128
Receivables		23,129			13,780			23,910
Inventories		158,753			128,827			156,654
Prepaid expenses and other current assets		17,939			12,401			14,523
Total current assets		326,781			326,587			335,069
Fixed assets, net		87,573			90,508			94,193
Operating lease right-of-use assets		203,744			196,775			221,538
Goodwill		15,358			15,374			56,889
Intangible assets, net		14,196			14,200			14,409
Deferred tax assets, net		9,928			8,623			12,161
Other long-term assets		11,947			12,159			11,575
Total long-term assets		342,746			337,639			410,765
Total assets	$	669,527		$	664,226		$	745,834

Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable	$	75,016		$	38,885		$	69,773
Accrued payroll and payroll taxes		20,517			18,431			14,608
Operating lease liabilities		62,759			60,885			66,087
Other current liabilities		22,472			25,886			19,312
Total current liabilities		180,764			144,087			169,780
Long-term operating lease liabilities		161,663			159,877			184,439
Other long-term liabilities		7,296			7,052			6,191
Total long-term liabilities		168,959			166,929			190,630
Total liabilities		349,723			311,016			360,410

Shareholders' equity
Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding		—			—			—
Common stock, no par value, 50,000 shares authorized; 19,360 shares issued and outstanding at August 3, 2024 and 19,833 shares issued and outstanding at February 3, 2024		199,763			196,144			192,169
Accumulated other comprehensive loss		(18,844	)		(19,027	)		(18,557	)
Retained earnings		138,885			176,093			211,812
Total shareholders' equity		319,804			353,210			385,424
Total liabilities and shareholders' equity	$	669,527		$	664,226		$	745,834


ZUMIEZ INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)

	Six Months Ended
	August 3, 2024			July 29, 2023
Cash flows from operating activities:
Net loss	$	(17,627	)	$	(26,891	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization and accretion		11,052			10,881
Noncash lease expense		32,169			34,380
Deferred taxes		(1,688	)		(4,060	)
Stock-based compensation expense		3,391			3,476
Impairment of long-lived assets		298			338
Other		949			84
Changes in operating assets and liabilities:
Receivables		(7,067	)		(1,113	)
Inventories		(30,665	)		(21,721	)
Prepaid expenses and other assets		(937	)		(3,807	)
Trade accounts payable		34,650			30,150
Accrued payroll and payroll taxes		2,102			(1,676	)
Income taxes payable		(1,346	)		(1,044	)
Operating lease liabilities		(36,817	)		(38,783	)
Other liabilities		(3,886	)		(4,480	)
Net cash used in operating activities		(15,422	)		(24,266	)
Cash flows from investing activities:
Additions to fixed assets		(6,266	)		(11,879	)
Purchases of marketable securities		(1,967	)		(1,850	)
Sales and maturities of marketable securities and other investments		24,145			12,284
Net cash provided by (used in) investing activities		15,912			(1,445	)
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		357			460
Payments for tax withholdings on equity awards		(130	)		(185	)
Repurchase of common stock, including taxes		(19,581	)		-
Net cash (used in) provided by financing activities		(19,354	)		275
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(213	)		179
Net decrease in cash, cash equivalents, and restricted cash		(19,077	)		(25,257	)
Cash, cash equivalents, and restricted cash, beginning of period		94,284			88,453
Cash, cash equivalents, and restricted cash, end of period	$	75,207		$	63,196
Supplemental disclosure on cash flow information:
Cash paid during the period for income taxes	$	1,805		$	1,520
Accrual for purchases of fixed assets	$	3,326			1,784
Accrual for repurchase of common stock		479			-

Zumiez Inc. Announces Fiscal 2024 Second Quarter Results