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06/02/22
Zumiez Inc. Announces Fiscal 2022 First Quarter Results

LYNNWOOD, Wash., June 02, 2022 (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 April 30, 2022.

Net sales for the first quarter ended April 30, 2022 (13 weeks) decreased 20.9% to $220.7 million from $279.1 million in the first quarter ended May 1, 2021 (13 weeks). Compared to the pre-pandemic first quarter ended May 4, 2019 (13 weeks), first quarter 2022 net sales increased 3.6%. Net loss for the first quarter of fiscal 2022 was $(0.4) million, or $(0.02) per diluted share, compared to net income of $26.4 million, or $1.03 per diluted share, in the first quarter of the prior fiscal year. Net income for the first quarter of 2019 was $0.8 million, or $0.03 per diluted share.

At April 30, 2022, the Company had cash and current marketable securities of $173.0 million compared to cash and current marketable securities of $400.4 million at May 1, 2021. The decrease was driven by share repurchases and capital expenditures partially offset by cash generated through operations. The Company repurchased 1.9 million shares in the first quarter of 2022 at an average cost of $43.51 per share and a total cost of $83.3 million which fully completed the existing authorized program. The Company currently has no open repurchase authorizations.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, “Our first quarter top line performance came in on the high side of our expectations for the quarter as we experienced another period of full price selling across each of our geographic regions. As forecasted, the first quarter was meaningfully impacted by the anniversary of record U.S. stimulus in early 2021 as well as the impacts of inflation and overall competition for the discretionary dollar. On the expense side we experienced some headwinds in the first quarter of this year around labor, shipping and logistics costs as well as a shift in timing of certain marketing and training investments that resulted in us missing our EPS guidance. As we look to the balance of the year, we are cognizant that the current macroeconomic environment is likely to deteriorate further and near-term year-over-year comparisons remain challenging. However, we have a strong balance sheet and remain confident in our consumer centric growth strategy and flexible operating model that has proven resilient to a variety of challenges over time. Despite the economic back drop, we believe the Company remains well positioned to capture share in each of our global markets while we continue advancing our strategic initiatives and generating value for our shareholders.”

May 2022 Sales
Net sales for the four-week period ended May 28, 2022 decreased 20.9% compared to the four-week period ended May 29, 2021 and increased 3.3% compared to the four-week period ended June 1, 2019.

Fiscal 2022 Second Quarter Outlook
The Company is introducing guidance for the three months ending July 30, 2022. Net sales are projected to be in the range of $232 to $239 million. Consolidated operating margins are expected to between 5.0% and 6.5% resulting in earnings per diluted share of approximately $0.45 to $0.55. The Company currently intends to open approximately 34 new stores in fiscal 2022, including up to 15 stores in North America, 14 stores in Europe and 5 stores in Australia.

Conference call Information
A conference call will be held today to discuss first quarter fiscal 2022 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (844) 309-0606 (domestic) or (574) 990-9934 (international) followed by the conference identification code of 9374922.

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 May 28, 2022, we operated 741 stores, including 601 in the United States, 52 in Canada, 69 in Europe and 19 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 29, 2022 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
Vice president 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
    April 30, 2022   % of Sales     May 1, 2021   % of Sales
Net sales   $ 220,686     100.0 %   $ 279,069   100.0 %
Cost of goods sold     148,312     67.2 %     175,900   63.0 %
Gross profit     72,374     32.8 %     103,169   37.0 %
Selling, general and administrative expenses     71,877     32.6 %     68,889   24.7 %
Operating profit     497     0.2 %     34,280   12.3 %
Interest income, net     492     0.2 %     975   0.3 %
Other income, net     172     0.1 %     254   0.1 %
Earnings before income taxes     1,161     0.5 %     35,509   12.7 %
Provision for income taxes     1,558     0.7 %     9,124   3.2 %
Net (loss) income   $ (397 )   (0.2 %)   $ 26,385   9.5 %
Basic (loss) earnings per share   $ (0.02 )       $ 1.05    
Diluted (loss) earnings per share   $ (0.02 )       $ 1.03    
Weighted average shares used in computation of earnings per share:                
Basic     19,533           25,167    
Diluted     19,533           25,676    
                     

ZUMIEZ INC. 
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

    April 30, 2022   January 29, 2022   May 1, 2021  
    (Unaudited)       (Unaudited)  
Assets              
Current assets              
Cash and cash equivalents   $ 62,501     $ 117,223     $ 81,503  
Marketable securities     110,452       177,260       318,888  
Receivables     23,609       14,427       20,481  
Inventories     141,883       128,728       136,498  
Prepaid expenses and other current assets     10,348       10,011       9,481  
Total current assets     348,793       447,649       566,851  
Fixed assets, net     90,313       91,451       96,004  
Operating lease right-of-use assets     240,052       230,187       259,790  
Goodwill     55,325       57,560       61,307  
Intangible assets, net     14,091       14,698       15,996  
Deferred tax assets, net     7,910       8,659       6,168  
Other long-term assets     11,630       11,808       11,688  
Total long-term assets     419,321       414,363       450,953  
Total assets   $ 768,114     $ 862,012     $ 1,017,804  
               
Liabilities and Shareholders’ Equity              
Current liabilities              
Trade accounts payable   $ 65,108     $ 55,638     $ 75,610  
Accrued payroll and payroll taxes     19,334       31,209       24,784  
Operating lease liabilities     69,327       63,577       67,433  
Other liabilities     24,528       34,015       25,419  
Total current liabilities     178,297       184,439       193,246  
Long-term operating lease liabilities     207,953       204,309       238,553  
Other long-term liabilities     4,967       4,946       4,224  
Total long-term liabilities     212,920       209,255       242,777  
Total liabilities     391,217       393,694       436,023  
               
Shareholders’ equity              
Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding     —       —       —  
Common stock, no par value, 50,000 shares authorized; 19,459 shares issued and outstanding at April 30, 2022, 21,215 shares issued and outstanding at January 29, 2022, and 25,780 shares issued and outstanding at May 1, 2021     182,899       180,824       174,921  
Accumulated other comprehensive (loss) income     (23,274 )     (13,463 )     446  
Retained earnings     217,272       300,957       406,414  
Total shareholders’ equity     376,897       468,318       581,781  
Total liabilities and shareholders’ equity   $ 768,114     $ 862,012     $ 1,017,804  
                     

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

    Three Months Ended
    April 30, 2022   May 1, 2021
Cash flows from operating activities:        
Net (loss) income   $ (397 )   $ 26,385  
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:        
Depreciation, amortization and accretion     5,416       5,889  
Noncash lease expense     16,495       15,968  
Deferred taxes     1,838       4,063  
Stock-based compensation expense     1,700       1,740  
Impairment of long-lived assets     -       2,079  
Other     (72 )     (246 )
Changes in operating assets and liabilities:        
Receivables     (4,172 )     (2,019 )
Inventories     (14,580 )     (1,813 )
Prepaid expenses and other assets     (280 )     (2,098 )
Trade accounts payable     9,672       5,796  
Accrued payroll and payroll taxes     (11,696 )     (3,141 )
Income taxes payable     (4,987 )     (3,690 )
Operating lease liabilities     (18,403 )     (18,776 )
Other liabilities     (5,011 )     (3,212 )
Net cash (used in) provided by operating activities     (24,477 )     26,925  
Cash flows from investing activities:        
Additions to fixed assets     (3,562 )     (2,825 )
Purchases of marketable securities and other investments     (1,914 )     (60,692 )
Sales and maturities of marketable securities and other investments     64,041       42,249  
Net cash provided by (used in) investing activities     58,565       (21,268 )
Cash flows from financing activities:        
Proceeds from issuance and exercise of stock-based awards     782       2,039  
Payments for tax withholdings on equity awards     (407 )     (486 )
Common stock repurchased     (87,860 )     —  
Net cash (used in) provided by financing activities     (87,485 )     1,553  
Effect of exchange rate changes on cash, cash equivalents, and restricted cash     (1,497 )     766  
Net (decrease) increase in cash, cash equivalents, and restricted cash     (54,894 )     7,976  
Cash, cash equivalents, and restricted cash, beginning of period     124,052       80,690  
Cash, cash equivalents, and restricted cash, end of period   $ 69,158     $ 88,666  
Supplemental disclosure on cash flow information:        
Cash paid during the period for income taxes   $ 4,657     $ 8,738  
Accrual for purchases of fixed assets     2,530       553  
         

Zumiez Inc