News Release

First Quarter Earnings Per Share Improved to $0.03
First Quarter Comparable Sales Increased 3.3%

LYNNWOOD, Wash., June 06, 2019 (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 first quarter ended May 4, 2019.

Total net sales for the first quarter ended May 4, 2019 (13 weeks) increased 3.2% to $212.9 million from $206.3 million in the first quarter ended May 5, 2018 (13 weeks).  Comparable sales for the thirteen weeks ended May 4, 2019 increased 3.3% on top of a comparable sales increase of 8.3% for the thirteen weeks ended May 5, 2018.  Net income in the first quarter of fiscal 2019 was $0.8 million, or $0.03 per diluted share, compared to a net loss of $2.6 million, or $0.10 per diluted share, in the first quarter of the prior fiscal year. 

At May 4, 2019, cash and current marketable securities increased 42.4% to $168.0 million, compared to cash and current marketable securities of $118.0 million at May 5, 2018. The increase in cash and current marketable securities was driven by cash generated through operations partially offset by capital expenditures.

“We delivered better than expected results to start the year due to strong performance in the last  two months of the first quarter,” commented Rick Brooks, Chief Executive Officer of Zumiez Inc. “Our performance reflects a continuation of our strategy focusing on full price, full margin selling and leveraging our broad assortment to service the customer.  Our  customer-focused execution continues to drive comparable sales gains and margin expansion and the operating model we have built around a singular cost structure continues to generate increased profitability.   With our distinct approach to retailing, authentic brand positioning and strong balance sheet, I am confident that Zumiez is poised to capture additional market share and return increased value to shareholders in the near and long-term.”

May 2019 Sales
The Company's comparable sales increased 2.4% for the four-week period ended June 1, 2019 compared to a comparable sales increase of 7.5% for the four-week period ended June 2, 2018.  

Fiscal 2019 Second Quarter Outlook
The Company is introducing guidance for the three months ending August 3, 2019.  Net sales are projected to be in the range of $220 million to $224 million including anticipated comparable sales growth of between 0.0% and 2.0%.  Consolidated operating margins are expected to be between 2.2% and 3.2% resulting in net income per share of approximately $0.14 to $0.20.  The Company currently intends to open approximately 15 new stores in fiscal 2019, including up to 6 stores in North America, 7 stores in Europe and 2 stores in Australia.

A conference call will be held today to discuss first quarter fiscal 2019 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (570) 990-9934 followed by the conference identification code of 9089741.

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, 2019, we operated 707 stores, including 606 in the United States, 50 in Canada, 42 in Europe and 9 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 February 2, 2019 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 (LOSS)
(In thousands, except per share amounts)
(Unaudited)

	Three Months Ended
	May 4, 2019			% of Sales			May 5, 2018			% of Sales
Net sales	$	212,928		100.0%		$	206,287			100.0%
Cost of goods sold		146,464		68.8%			143,700			69.7%
Gross profit		66,464		31.2%			62,587			30.3%
Selling, general and administrative expenses		65,496		30.7%			64,296			31.1%
Operating profit (loss)		968		0.5%			(1,709	)		(0.8%)
Interest income, net		852		0.4%			283			0.0%
Other income (expense), net		153		0.0%			(482	)		(0.1%)
Earnings (loss) before income taxes		1,973		0.9%			(1,908	)		(0.9%)
Provision for income taxes		1,180		0.5%			699			0.4%
Net income (loss)	$	793		0.4%		$	(2,607	)		(1.3%)
Basic earnings (loss) per share	$	0.03				$	(0.10	)
Diluted earnings (loss) per share	$	0.03				$	(0.10	)
Weighted average shares used in computation of earnings (loss) per share:
Basic		25,090					24,831
Diluted		25,351					24,831

 

ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

	May 4, 2019				February 2, 2019			May 5, 2018
	(Unaudited)							(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	60,616			$	52,422		$	29,063
Marketable securities		107,364			112,912			88,918
Receivables		15,083			17,776			18,466
Inventories		135,959			129,268			128,244
Prepaid expenses and other current assets		9,616			14,797			13,898
Total current assets		328,638			327,175			278,589
Fixed assets, net		116,830			120,503			126,047
Operating lease right-of-use assets		301,980				—			—
Goodwill		57,682			58,813			60,832
Intangible assets, net		14,852			15,260			15,955
Deferred tax assets, net		6,312			5,259			3,288
Other long-term assets		8,442			7,180			6,993
Total long-term assets		506,098			207,015			213,115
Total assets	$	834,736			$	534,190		$	491,704
Liabilities and Shareholders’ Equity
Current liabilities
Trade accounts payable	$	54,454			$	35,293		$	45,980
Accrued payroll and payroll taxes		15,302			21,015			15,132
Income taxes payable		65				5,817			359
Deferred rent and tenant allowances		—			7,489			7,873
Operating lease liabilities		54,469				—			4,696
Other liabilities		19,675			23,494			21,194
Total current liabilities		143,965			93,108			95,234
Long-term deferred rent and tenant allowances		—			37,076			39,217
Long-term operating lease liabilities		293,375				—			—
Other long-term liabilities		3,436			3,550			4,768
Total long-term liabilities		296,811			40,626			43,985
Total liabilities		440,776			133,734			139,219
Shareholders’ equity
Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding		—				—			—
Common stock, no par value, 50,000 shares authorized; 25,741 shares issued and outstanding at May 4, 2019 and 25,521 shares issued and outstanding at February 2, 2019 and 25,470 shares issued and outstanding at May 5, 2018		155,104			153,066			148,591
Accumulated other comprehensive loss		(12,275)			(9,224)			(4,908)
Retained earnings		251,131			256,614			208,802
Total shareholders’ equity		393,960			400,456			352,485
Total liabilities and shareholders’ equity	$	834,736			$	534,190		$	491,704

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

	Three Months Ended
	May 4, 2019				May 5, 2018
Cash flows from operating activities:
Net income (loss)	$	793			$	(2,607	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation, amortization and accretion		6,263				6,970
Noncash lease expense		13,371				—
Deferred taxes		1,249				217
Stock-based compensation expense		1,693				1,642
Other		224				588
Changes in operating assets and liabilities:
Receivables		4,708				(1,096	)
Inventories		(7,540	)			(3,781	)
Prepaid expenses and other assets		(167	)			857
Trade accounts payable		19,568				7,723
Accrued payroll and payroll taxes		(5,636	)			(5,383	)
Income taxes payable		(7,104	)			(5,993	)
Deferred rent and tenant allowances		—				(32	)
Operating lease liabilities		(13,770	)			—
Other liabilities		(3,790	)			(2,997	)
Net cash provided by (used in) operating activities		9,862				(3,892	)
Cash flows from investing activities:
Additions to fixed assets		(3,331	)			(3,585	)
Purchases of marketable securities and other investments		(33,385	)			(12,932	)
Sales and maturities of marketable securities and other investments		39,001				21,590
Net cash provided by investing activities		2,285				5,073
Cash flows from financing activities:
Proceeds from revolving credit facilities		—				17,245
Payments on revolving credit facilities		—				(13,347	)
Proceeds from issuance and exercise of stock-based awards		583				621
Payments for tax withholdings on equity awards		(238	)			(195	)
Net cash provided by financing activities		345				4,324
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(466	)			(497	)
Net increase in cash, cash equivalents, and restricted cash		12,026				5,008
Cash, cash equivalents, and restricted cash, beginning of period		54,271				25,803
Cash, cash equivalents, and restricted cash, end of period	$	66,297			$	30,811
Supplemental disclosure on cash flow information:
Cash paid during the period for income taxes	$	7,038			$	6,442
Accrual for purchases of fixed assets		1,583				2,872

 

Company Contact:
Darin White
Director of Finance &
Investor Relations
Zumiez Inc.
(425) 551-1500, ext. 1337

Investor Contact:
ICR
Brendon Frey
(203) 682-8200

 

Source: Zumiez Inc