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.

(In thousands, except per share amounts)
  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   

(In thousands)
  April 29, 2023 January 28, 2023 April 30, 2022
  (Unaudited)   (Unaudited)
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 

(In thousands)
  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:
Brendon Frey
(203) 682-8200