Zumiez Inc. Announces Fiscal 2020 Fourth Quarter Results

Fourth Quarter 2020 Net Sales Increased 0.8% to $331.5 Million
Fourth Quarter 2020 Diluted Earnings Per Share Increased 13.9% to $1.68
Cash and Current Marketable Securities Increased 49.5% to $375.5 Million

LYNNWOOD, Wash., March 11, 2021 (GLOBE NEWSWIRE) -- Zumiez Inc. (NASDAQ: ZUMZ) today reported results for the fourth quarter and year ended January 30, 2021.

Total net sales for the fourth quarter ended January 30, 2021 (13 weeks) increased 0.8% to $331.5 million from $328.8 million in the quarter ended February 1, 2020 (13 weeks). Comparable sales for the thirteen weeks ended January 30, 2021 increased 4.7% compared to a comparable sales increase of 6.4% for the thirteen weeks ended February 1, 2020. Net income for the fourth quarter of fiscal 2020 was $42.8 million, or $1.68 per diluted share, compared to net income of $37.9 million, or $1.48 per diluted share in the fourth quarter of the prior fiscal year.

Total net sales for fiscal 2020 (52 weeks) ended January 30, 2021 decreased 4.2% to $990.7 million from $1.034 billion in fiscal 2019 (52 weeks) ended February 1, 2020. Comparable sales for the fifty-two week period ended January 30, 2021 increased 13.6% compared the same fifty-two week period ended February 1, 2020. Net income in fiscal 2020 increased 14.0% to $76.2 million, or $3.00 per diluted share, compared to net income in the prior fiscal year of $66.9 million, or $2.62 per diluted share.

At January 30, 2021, the Company had cash and current marketable securities of $375.5 million compared to cash and current marketable securities of $251.2 million at February 1, 2020. The increase in cash and current marketable securities was driven by cash generated through operations including cash deferment of $30.1 million composed of lower inventory levels, landlord payments, extended vendor terms and payroll tax payments as well as net income improvements related to abatements, credits and expense reductions. This increase was partially offset by $13.4 million of share repurchases through the Company’s stock buyback program prior to our stores closing in March due to COVID-19 and other planned capital expenditures.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, “We are extremely proud of how our organization executed during a year of significant and unfamiliar challenges. Our one channel approach to retail and relentless focus on serving the consumer allowed to us to achieve annual sales close to fiscal 2019 levels and record profitability despite our stores around the world being closed for approximately 22% of the possible operating days. Our recent performance, including during the holiday season, has strengthened our operation and financial foundation and enhanced our competitive advantages. While the near-term environment is likely to remain volatile due to uncertainty surrounding the virus, we believe we are well positioned with a strong balance sheet and differentiated strategies to further expand our global market share and continue generating meaningful value for our shareholders in the years ahead.”

Fiscal First Quarter-to-Date Sales

Total first quarter-to-date sales for the 35 days ended March 6, 2021 were down approximately 3.8%, compared with the same 35 day time period in the prior year ended March 7, 2020. Comparable sales for the 35 days ended March 6, 2021 decreased 0.4%. By channel, open store comparable sales decreased 6.9% and e-commerce sales increased 29.5%. During this timeframe, we had roughly 7% fewer open store days than last year due to governmental orders and potential safety concerns. We also experienced significant metering of traffic and reduced hours where required by local governments. We expect that the store closures and various other operating restrictions will fluctuate as we move through the quarter.

Outlook

Due to the continued fast-moving nature of this situation and the uncertainty of impacts on revenue and costs, the Company is not providing an outlook at this time for the first quarter or the year.

Conference call Information

A conference call will be held today to discuss fourth quarter fiscal 2020 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (574) 990-9934 followed by the conference identification code of 1986667.

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 March 6, 2021, we operated 722 stores, including 602 in the United States, 52 in Canada, 54 in Europe and 14 in Australia. We operate under the names Zumiez, Blue Tomato and Fast Times. Additionally, we operate ecommerce web sites at zumiez.com, 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 1, 2020 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
(In thousands, except per share amounts)
(Unaudited)

			Three Months Ended
			January 30,		% of			February 1,			% of
			2021		Sales			2020			Sales
			(Unaudited)					(Unaudited)
Net sales		$	331,536		100.0	%			328,754		100.0	%
Cost of goods sold			201,913		60.9	%			200,427		61.0	%
Gross profit			129,623		39.1	%			128,327		39.0	%
Selling, general and administrative expenses			75,814		22.9	%			79,471		24.1	%
Operating profit			53,809		16.2	%			48,856		14.9	%
Interest income, net			881		0.3	%			1,002		0.3	%
Other expense, net			1,417		0.4	%			545		0.1	%
Earnings before income taxes			56,107		16.9	%			50,403		15.3	%
Provision for income taxes			13,310		4.0	%			12,518		3.8	%
Net income		$	42,797		12.9	%		$	37,885		11.5	%
Basic earnings per share		$	1.71					$	1.50
Diluted earnings per share		$	1.68					$	1.48
Weighted average shares used in computation of Earnings per share:
Basic			25,024						25,281
Diluted			25,462						25,662
ZUMIEZ INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts)
			Fiscal Year Ended
			January 30,		% of			February 1,			% of
			2021		Sales			2020			Sales
			(Unaudited)
Net sales		$	990,652		100.0	%		$	1,034,129		100.0	%
Cost of goods sold			640,637		64.7	%			667,566		64.6	%
Gross profit			350,015		35.3	%			366,563		35.4	%
Selling, general and administrative expenses			253,077		25.5	%			280,756		27.1	%
Operating profit			96,938		9.8	%			85,807		8.3	%
Interest income, net			3,518		0.3	%			3,654		0.4	%
Other expense, net			2,001		0.2	%			1,532		0.1	%
Earnings before income taxes			102,457		10.3	%			90,993		8.8	%
Provision for income taxes			26,230		2.6	%			24,112		2.3	%
Net income		$	76,227		7.7	%		$	66,881		6.5	%
Basic earnings per share		$	3.06					$	2.65
Diluted earnings per share		$	3.00					$	2.62
Weighted average shares used in computation of Earnings per share:
Basic			24,942						25,200
Diluted			25,398						25,535

ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

		January 30, 2021			February 1, 2020
		(Unaudited)
Assets
Current assets
Cash and cash equivalents		$	73,622		$	52,428
Marketable securities			301,920			198,768
Receivables			16,558			16,841
Inventories			134,354			135,095
Prepaid expenses and other current assets			8,823			9,456
Total current assets			535,277			412,588
Fixed assets, net			98,352			113,051
Operating lease right-of-use assets			267,152			301,784
Goodwill			61,470			57,099
Intangible assets, net			16,029			14,564
Deferred tax assets, net			9,927			6,303
Other long-term assets			10,157			8,869
Total long-term assets			463,087			501,670
Total assets		$	998,364		$	914,258
Liabilities and Shareholders’ Equity
Current liabilities
Trade accounts payable		$	69,751		$	47,787
Accrued payroll and payroll taxes			27,911			23,653
Income taxes payable			6,317			4,686
Operating lease liabilities			66,993			61,800
Other liabilities			24,480			21,784
Total current liabilities			195,452			159,710
Long-term operating lease liabilities			246,123			284,717
Other long-term liabilities			4,193			3,745
Total long-term liabilities			250,316			288,462
Total liabilities			445,768			448,172
Shareholders’ equity
Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding			—			—
Common stock, no par value, 50,000 shares authorized; 25,599 shares issued and outstanding at January 30, 2021 and 25,828 shares issued and outstanding at February 1, 2020			171,628			161,458
Accumulated other comprehensive income (loss)			939			(12,591	)
Retained earnings			380,029			317,219
Total shareholders’ equity			552,596			466,086
Total liabilities and shareholders’ equity		$	998,364		$	914,258

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

		Fiscal Year Ended
		January 30, 2020				February 1, 2020
		(Unaudited)
Cash flows from operating activities:
Net income		$	76,227			$	66,881
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion			24,059				25,449
Noncash lease expense			61,694				58,223
Deferred taxes			(3,890	)			899
Stock-based compensation expense			6,448				6,382
Impairment of long-lived assets			4,803				215
Other			(570	)			(656	)
Changes in operating assets and liabilities:
Receivables			928				3,396
Inventories			3,946				(6,825	)
Prepaid expenses and other current assets			1,010				861
Trade accounts payable			20,797				12,756
Accrued payroll and payroll taxes			3,841				2,735
Income taxes payable			1,602				(1,127	)
Operating lease liabilities			(65,479	)			(62,217	)
Other liabilities			2,996				(902	)
Net cash provided by operating activities			138,412				106,070
Cash flows from investing activities:
Additions to fixed assets			(9,057	)			(18,818	)
Purchases of marketable securities and other investments			(222,785	)			(236,838	)
Sales and maturities of marketable securities and other investments			121,301				152,725
Net cash used in investing activities			(110,541	)			(102,931	)
Cash flows from financing activities:
Proceeds from issuance and exercise of stock-based awards			3,877				2,332
Payments for tax withholdings on equity awards			(154	)			(322	)
Common stock repurchased			(13,417	)			—
Net cash (used in) provided by financing activities			(9,694	)			2,010
Effect of exchange rate changes on cash and cash equivalents			3,522				(429	)
Net increase in cash and cash equivalents			21,699				4,720
Cash and cash equivalents, beginning of period			58,991				54,271
Cash and cash equivalents, end of period		$	80,690			$	58,991
Supplemental disclosure on cash flow information:
Cash paid during the period for income taxes		$	27,598			$	24,138
Accrual for purchases of fixed assets			231				1,152

Company Contact:
Darin White
Director of Finance &
Investor Relations
Zumiez Inc.
(425) 551-1500, ext. 1337

Investor Contact:
ICR
Brendon Frey
(203) 682-8200