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Zumiez Inc. Announces Fiscal 2019 First Quarter Results

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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  
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