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06/01/23
Zumiez Inc. Announces Fiscal 2023 First Quarter Results

LYNNWOOD, Wash., June 01, 2023 (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 29, 2023.

Net sales for the first quarter ended April 29, 2023 (13 weeks) decreased 17.1% to $182.9 million from $220.7 million in the first quarter ended April 30, 2022 (13 weeks).   Net loss in the first quarter of fiscal 2023 was $18.4 million, or $0.96 loss per diluted share, compared to a net loss of $0.4 million, or $0.02 loss per diluted share, in the first quarter of the prior fiscal year.

At April 29, 2023, the Company had cash and current marketable securities of $155.3 million compared to cash and current marketable securities of $173.0 million at April 30, 2022. The decrease was driven by capital expenditures of $27.5 million over this time period, offset by $11.2 million provided by operating activities.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, “Our first quarter operating results were in-line with our outlook and reflect the significant change in consumer purchasing behavior that has occurred in the U.S. over the past year. While the domestic demand environment and heightened promotional activity has put pressure on our full-price selling model, we remain confident that the strong connections we’ve forged with our customers through Zumiez’s distinct brand culture, diverse and differentiated merchandise offering, and world class service have us well positioned for accelerated market share gains when we emerge from the current economic cycle. At the same time, we continue to expand our presence and evolve our capabilities in Europe and Australia and are encouraged by our momentum in these regions and the global foundation we are building for long-term, profitable growth.”

May 2023 Sales
Net sales for the four-week period ended May 27, 2023 decreased 12.8% compared to the four-week period ended May 28, 2022. Comparable sales for the four-week period ending May 27, 2023 decreased 14.3% from the comparable period in the prior year.

Fiscal 2023 Second Quarter Outlook
The Company is introducing guidance for the three months ending July 29, 2023. Net sales are projected to be in the range of $187 to $192 million. Loss per share is expected to be between $(0.63) to $(0.73).  

The Company currently intends to open approximately 23 new stores in fiscal 2023, including up to 8 stores in North America, 10 stores in Europe and 5 stores in Australia.

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 May 27, 2023, we operated 758 stores, including 608 in the United States, 49 in Canada, 80 in Europe and 21 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
    April 29, 2023   % of Sales     April 30, 2022   % of Sales
Net sales   $ 182,887     100.0 %   $ 220,686     100.0 %
Cost of goods sold     133,529     73.0 %     148,312     67.2 %
Gross profit     49,358     27.0 %     72,374     32.8 %
Selling, general and administrative expenses     70,712     38.7 %     71,877     32.6 %
Operating (loss) profit     (21,354 )   -11.7 %     497     0.2 %
Interest income, net     858     0.5 %     492     0.2 %
Other (expense) income, net     (541 )   -0.3 %     172     0.1 %
(Loss) earnings before income taxes     (21,037 )   -11.5 %     1,161     0.5 %
(Benefit from) provision for income taxes     (2,655 )   -1.4 %     1,558     0.7 %
Net loss   $ (18,382 )   -10.1 %   $ (397 )   -0.2 %
Basic loss per share   $ (0.96 )       $ (0.02 )    
Diluted loss per share   $ (0.96 )       $ (0.02 )    
Weighted average shares used in computation of loss per share:                
Basic     19,197           19,533      
Diluted     19,197           19,533      
                     


 
ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
             
    April 29, 2023   January 28, 2023   April 30, 2022
    (Unaudited)       (Unaudited)
Assets            
Current assets            
Cash and cash equivalents   $ 66,655     $ 81,503     $ 62,501  
Marketable securities     88,684       91,986       110,452  
Receivables     20,655       20,613       23,609  
Inventories     147,871       134,824       141,883  
Prepaid expenses and other current assets     12,755       11,252       10,348  
Total current assets     336,620       340,178       348,793  
Fixed assets, net     94,419       93,746       90,313  
Operating lease right-of-use assets     216,091       222,240       240,052  
Goodwill     56,925       56,566       55,325  
Intangible assets, net     14,404       14,443       14,091  
Deferred tax assets, net     11,034       8,205       7,910  
Other long-term assets     12,005       12,525       11,630  
Total long-term assets     404,878       407,725       419,321  
Total assets   $ 741,498     $ 747,903     $ 768,114  
             
Liabilities and Shareholders’ Equity            
Current liabilities            
Trade accounts payable   $ 59,551     $ 40,379     $ 65,108  
Accrued payroll and payroll taxes     18,378       16,321       19,334  
Operating lease liabilities     63,866       65,460       69,327  
Other liabilities     19,298       23,649       24,528  
Total current liabilities     161,093       145,809       178,297  
Long-term operating lease liabilities     182,507       188,835       207,953  
Other long-term liabilities     6,055       5,931       4,967  
Total long-term liabilities     188,562       194,766       212,920  
Total liabilities     349,655       340,575       391,217  
             
Shareholders’ equity            
Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding     —       —       —  
Common stock, no par value, 50,000 shares authorized; 19,782 shares issued and outstanding at April 29, 2023, 19,489 shares issued and outstanding at January 28, 2023, and 19,459 shares issued and outstanding at April 30, 2022     190,599       188,418       182,899  
Accumulated other comprehensive loss     (19,077 )     (19,793 )     (23,274 )
Retained earnings     220,321       238,703       217,272  
Total shareholders’ equity     391,843       407,328       376,897  
Total liabilities and shareholders’ equity   $ 741,498     $ 747,903     $ 768,114  
                         


 
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
     
    Three Months Ended
    April 29, 2023   April 30, 2022
Cash flows from operating activities:        
Net loss   $ (18,382 )   $ (397 )
Adjustments to reconcile net loss to net cash used in operating activities:        
Depreciation, amortization and accretion     5,379       5,416  
Noncash lease expense     16,313       16,495  
Deferred taxes     (2,912 )     1,838  
Stock-based compensation expense     1,906       1,700  
Impairment of long-lived assets     312       -  
Other     375       (72 )
Changes in operating assets and liabilities:        
Receivables     1,030       (4,172 )
Inventories     (13,091 )     (14,580 )
Prepaid expenses and other assets     (925 )     (280 )
Trade accounts payable     18,868       9,672  
Accrued payroll and payroll taxes     2,087       (11,696 )
Income taxes payable     (301 )     (4,987 )
Operating lease liabilities     (18,609 )     (18,403 )
Other liabilities     (4,929 )     (5,011 )
Net cash used in operating activities     (12,879 )     (24,477 )
Cash flows from investing activities:        
Additions to fixed assets     (5,438 )     (3,562 )
Purchases of marketable securities and other investments     (1,850 )     (1,914 )
Sales and maturities of marketable securities and other investments     5,571       64,041  
Net cash (used in) provided by investing activities     (1,717 )     58,565  
Cash flows from financing activities:        
Proceeds from revolving credit facilities     1,549       17,414  
Payments on revolving credit facilities     (1,549 )     (17,414 )
Proceeds from issuance and exercise of stock-based awards     460       782  
Payments for tax withholdings on equity awards     (185 )     (407 )
Common stock repurchased     —       (87,860 )
Net cash provided by (used in) financing activities     275       (87,485 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash     (509 )     (1,497 )
Net decrease in cash, cash equivalents, and restricted cash     (14,830 )     (54,894 )
Cash, cash equivalents, and restricted cash, beginning of period     88,453       124,052  
Cash, cash equivalents, and restricted cash, end of period   $ 73,623     $ 69,158  
Supplemental disclosure on cash flow information:        
Cash paid during the period for income taxes   $ 536     $ 4,657  
Accrual for purchases of fixed assets     2,323       2,530  
         

 

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