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CST: 17/08/2019 17:48:16   

Zumiez Inc. Announces Fiscal 2019 First Quarter Results

72 Days ago

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     15,260     15,955
Deferred tax assets, net     6,312     5,259     3,288
Other long-term assets     8,442     7,180     6,993
Total long-term assets     506,098     207,015     213,115
Total assets $   834,736   $   534,190   $   491,704
           
Liabilities and Shareholders’ Equity          
Current liabilities          
Trade accounts payable $   54,454   $   35,293   $   45,980
Accrued payroll and payroll taxes     15,302     21,015     15,132
Income taxes payable     65       5,817       359
Deferred rent and tenant allowances     —     7,489     7,873
Operating lease liabilities     54,469       —       4,696
Other liabilities     19,675     23,494     21,194
Total current liabilities     143,965     93,108     95,234
Long-term deferred rent and tenant allowances     —     37,076     39,217
Long-term operating lease liabilities     293,375       —       —
Other long-term liabilities      3,436     3,550     4,768
Total long-term liabilities     296,811     40,626     43,985
Total liabilities     440,776     133,734     139,219
           
Shareholders’ equity          
Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding     —       —       —
Common stock, no par value, 50,000 shares authorized; 25,741 shares issued and outstanding at May 4, 2019 and 25,521 shares issued and outstanding at February 2, 2019 and 25,470 shares issued and outstanding at May 5, 2018     155,104     153,066     148,591
Accumulated other comprehensive loss     (12,275)     (9,224)     (4,908)
Retained earnings     251,131     256,614     208,802
Total shareholders’ equity     393,960     400,456     352,485
Total liabilities and shareholders’ equity $   834,736   $   534,190   $   491,704
             


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

    Three Months Ended  
    May 4, 2019       May 5, 2018  
Cash flows from operating activities:      
Net income (loss) $   793     $   (2,607 )
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:      
Depreciation, amortization and accretion     6,263         6,970  
Noncash lease expense     13,371         —  
Deferred taxes     1,249         217  
Stock-based compensation expense     1,693         1,642  
Other     224         588  
Changes in operating assets and liabilities:      
Receivables     4,708         (1,096 )
Inventories     (7,540 )       (3,781 )
Prepaid expenses and other assets     (167 )       857  
Trade accounts payable     19,568         7,723  
Accrued payroll and payroll taxes     (5,636 )       (5,383 )
Income taxes payable     (7,104 )       (5,993 )
Deferred rent and tenant allowances     —         (32 )
Operating lease liabilities     (13,770 )       —  
Other liabilities     (3,790 )       (2,997 )
Net cash provided by (used in) operating activities     9,862         (3,892 )
Cash flows from investing activities:      
Additions to fixed assets     (3,331 )       (3,585 )
Purchases of marketable securities and other investments     (33,385 )       (12,932 )
Sales and maturities of marketable securities and other investments     39,001         21,590  
Net cash provided by investing activities     2,285         5,073  
Cash flows from financing activities:      
Proceeds from revolving credit facilities     —         17,245  
Payments on revolving credit facilities     —         (13,347 )
Proceeds from issuance and exercise of stock-based awards     583         621  
Payments for tax withholdings on equity awards     (238 )       (195 )
Net cash provided by financing activities     345         4,324  
Effect of exchange rate changes on cash, cash equivalents, and restricted cash     (466 )       (497 )
Net increase in cash, cash equivalents, and restricted cash     12,026         5,008  
Cash, cash equivalents, and restricted cash, beginning of period     54,271         25,803  
Cash, cash equivalents, and restricted cash, end of period $   66,297     $   30,811  
Supplemental disclosure on cash flow information:      
Cash paid during the period for income taxes $   7,038     $   6,442  
Accrual for purchases of fixed assets     1,583         2,872  
       

 

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

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

 

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