• Zumiez Inc. Announces Fiscal 2022 Third Quarter Results

    Source: Nasdaq GlobeNewswire / 01 Dec 2022 16:05:00   America/New_York

    LYNNWOOD, Wash., Dec. 01, 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 third quarter ended October 29, 2022.

    Net sales for the third quarter ended October 29, 2022 (13 weeks) decreased 17.9% to $237.6 million from $289.5 million in the third quarter ended October 30, 2021 (13 weeks). Net income in the third quarter of fiscal 2022 was $6.9 million, or $0.36 per diluted share, compared to net income of $30.7 million, or $1.25 per diluted share, in the third quarter of the prior fiscal year.

    Total net sales for the nine months (39 weeks) ended October 29, 2022 decreased 19.0% to $678.3 million from $837.2 million reported for the nine months (39 weeks) ended October 30, 2021. Net income for the first nine months of 2022 was $9.6 million, or $0.49 per diluted share, compared to net income for the first nine months of fiscal 2021 of $81.1 million, or $3.20 per diluted share.

    At October 29, 2022, the Company had cash and current marketable securities of $141.1 million compared to cash and current marketable securities of $338.1 million at October 30, 2021. The decrease was driven by share repurchases of $183.1 million and capital expenditures of $24.7 million over this time period, partially offset by cash generated through operations.

    Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, “We are managing through a challenging operating environment and our recent performance reflects the emergence of multiple headwinds since the year ago period led by a pullback in consumer discretionary spending, inflation driven cost and expense pressures, an increasingly promotional marketplace, a war in Eastern Europe and the anniversary of some strong trends that drove our business during the pandemic. At the same time, our growth in Europe and Australia is being offset on a reported basis due to unfavorable movements in foreign currency. While we are disappointed with the change in our results year-over-year, I am encouraged with how our teams are managing the business in light of the current challenges. Like we have done during similar economic times, we are prudently balancing the protection of near-term profitability while investing in our people and the key projects that will continue to deliver our distinct merchandise and world-class customer service that has been the foundation of Zumiez’ long-term success.”

    Fourth Quarter To-Date
    Total fourth quarter-to-date total sales for the 31 days ending November 29, 2022 decreased 23.9%, compared with the same 31-day time period in the prior year ended November 30, 2021. Total comparable sales for the 31-day period ending November 29, 2022 decreased 24.8% from the comparable period in the prior year.

    Fiscal 2022 Fourth Quarter Outlook
    The Company is introducing guidance for the three months ending January 28, 2023. Net sales are projected to be in the range of $258 to $265 million. Consolidated operating margins are expected to between 3.4% and 4.7% resulting in earnings per diluted share of approximately $0.36 to $0.51. The Company currently intends to open approximately 33 new stores in fiscal 2022, including up to 16 stores in North America, 13 stores in Europe and 4 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 November 26, 2022, we operated 763 stores, including 615 in the United States, 52 in Canada, 75 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 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
    Director 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
     October 29, 2022 % of Sales  October 30, 2021 % of Sales
    Net sales$237,591  100.0% $289,455 100.0%
    Cost of goods sold 155,608  65.5%  174,791 60.4%
    Gross profit 81,983  34.5%  114,664 39.6%
    Selling, general and administrative expenses 71,544  30.1%  74,822 25.8%
    Operating profit  10,439  4.4%  39,842 13.8%
    Interest income, net 428  0.1%  893 0.3%
    Other (expense) income, net (1,256) -0.5%  468 0.1%
    Earnings before income taxes 9,611  4.0%  41,203 14.2%
    Provision for income taxes 2,679  1.1%  10,501 3.6%
    Net income $6,932  2.9% $30,702 10.6%
    Basic earnings per share$0.36    $1.26  
    Diluted earnings per share$0.36    $1.25  
    Weighted average shares used in computation of earnings per share:       
    Basic 19,101     24,284  
    Diluted 19,248     24,629  
              
     Nine Months Ended
     October 29, 2022 % of Sales  October 30, 2021 % of Sales
    Net sales$678,270  100.0% $837,190 100.0%
    Cost of goods sold 448,861  66.2%  514,393 61.4%
    Gross profit 229,409  33.8%  322,797 38.6%
            
    Selling, general and administrative expenses 213,519  31.5%  216,722 25.9%
    Operating profit 15,890  2.3%  106,075 12.7%
            
    Interest income, net 1,279  0.2%  2,833 0.3%
    Other (expense) income, net (850) -0.1%  571 0.1%
    Earnings before income taxes 16,319  2.4%  109,479 13.1%
    Provision for income taxes 6,717  1.0%  28,394 3.4%
    Net income$9,602  1.4% $81,085 9.7%
    Basic earnings per share$0.50    $3.26  
    Diluted earnings per share$0.49    $3.20  
    Weighted average shares used in computation of earnings per share:         
    Basic 19,239     24,905  
    Diluted 19,490     25,325  
               

    ZUMIEZ INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In thousands)

     October 29, 2022 January 29, 2022 October 30, 2021
     (Unaudited)   (Unaudited)
    Assets     
    Current assets     
    Cash and cash equivalents$49,336  $117,223  $75,545 
    Marketable securities 91,776   177,260   262,541 
    Receivables 19,824   14,427   22,107 
    Inventories 177,205   128,728   175,108 
    Prepaid expenses and other current assets 15,166   10,011   11,633 
    Total current assets 353,307   447,649   546,934 
    Fixed assets, net 91,590   91,451   91,956 
    Operating lease right-of-use assets 220,420   230,187   244,777 
    Goodwill 52,899   57,560   59,525 
    Intangible assets, net 13,199   14,698   15,409 
    Deferred tax assets, net 6,794   8,659   7,784 
    Other long-term assets 11,598   11,808   11,804 
    Total long-term assets 396,500   414,363   431,255 
    Total assets$749,807  $862,012  $978,189 
          
    Liabilities and Shareholders’ Equity     
    Current liabilities     
    Trade accounts payable$69,076  $55,638  $84,609 
    Accrued payroll and payroll taxes 20,557   31,209   27,436 
    Operating lease liabilities 65,236   63,577   64,389 
    Other liabilities 20,677   34,015   41,207 
    Total current liabilities 175,546   184,439   217,641 
    Long-term operating lease liabilities 188,818   204,309   220,524 
    Other long-term liabilities  4,773   4,946   8,282 
    Total long-term liabilities 193,591   209,255   228,806 
    Total liabilities 369,137   393,694   446,447 
          
    Shareholders’ equity     
    Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding —   —   — 
    Common stock, no par value, 50,000 shares authorized; 19,490 shares issued and outstanding at October 29, 2022, 21,215 shares issued and outstanding at January 29, 2022, and 23,319 shares issued and outstanding at October 30, 2021 186,684   180,824   179,049 
    Accumulated other comprehensive loss (33,285)  (13,463)  (5,867)
    Retained earnings 227,271   300,957   358,560 
    Total shareholders’ equity 380,670   468,318   531,742 
    Total liabilities and shareholders’ equity$749,807  $862,012  $978,189 
             

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

     Nine Months Ended
     October 29, 2022 October 30, 2021
    Cash flows from operating activities:   
    Net income$9,602  $81,085 
    Adjustments to reconcile net income to net cash (used in) provided by operating activities:   
    Depreciation, amortization and accretion 15,802   17,318 
    Noncash lease expense 50,074   48,131 
    Deferred taxes 3,441   2,772 
    Stock-based compensation expense 5,249   5,118 
    Impairment of long-lived assets 372   2,079 
    Other 1,331   1,204 
    Changes in operating assets and liabilities:   
    Receivables (2,317)  (3,681)
    Inventories (52,020)  (41,702)
    Prepaid expenses and other assets (5,365)  (4,275)
    Trade accounts payable 14,570   14,276 
    Accrued payroll and payroll taxes (10,191)  (351)
    Income taxes payable (1,790)  4,253 
    Operating lease liabilities (56,796)  (59,099)
    Other liabilities (8,374)  4,808 
    Net cash (used in) provided by operating activities (36,412)  71,936 
    Cash flows from investing activities:   
    Additions to fixed assets (17,720)  (8,808)
    Purchases of marketable securities and other investments (1,914)  (151,089)
    Sales and maturities of marketable securities and other investments 80,051   186,116 
    Net cash provided by investing activities 60,417   26,219 
    Cash flows from financing activities:   
    Proceeds from revolving credit facilities 2,430   — 
    Payments on revolving credit facilities (2,430)  — 
    Proceeds from issuance and exercise of stock-based awards 1,110   2,863 
    Payments for tax withholdings on equity awards (499)  (560)
    Common stock repurchased (87,860)  (98,520)
    Net cash used in financing activities (87,249)  (96,217)
    Effect of exchange rate changes on cash, cash equivalents, and restricted cash (4,978)  (66)
    Net (decrease) increase in cash, cash equivalents, and restricted cash (68,222)  1,872 
    Cash, cash equivalents, and restricted cash, beginning of period 124,052   80,690 
    Cash, cash equivalents, and restricted cash, end of period$55,830  $82,562 
    Supplemental disclosure on cash flow information:   
    Cash paid during the period for income taxes$5,166  $20,507 
    Accrual for purchases of fixed assets 1,802   1,851 
    Accrual for repurchase of common stock -   4,034 
        




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