Zumiez Inc. Announces Fiscal 2011 Second Quarter Results and August 2011 Sales

EVERETT, WA--(Marketwire - Aug 31, 2011) - Zumiez Inc. (NASDAQ: ZUMZ), a leading specialty retailer of action sports related apparel, footwear, equipment and accessories, today reported results for the second quarter ended July 30, 2011.

Total net sales for the second quarter (13 weeks) ended July 30, 2011 increased 14.9% to $112.2 million from $97.7 million reported in the second quarter ended July 31, 2010 (13 weeks). Comparable store sales for the second quarter of fiscal 2011 increased 7.5% on top of an increase of 9.3% for the second quarter of fiscal 2010. The Company posted net income for the quarter of $2.6 million or $0.08 per diluted share compared to a net loss of $1.2 million or $0.04 per diluted share. The results for the second quarter 2010 include costs of $1.0 million, or approximately $0.02 per diluted share, associated with the relocation of the Company's distribution center from Everett, Washington to Corona, California, and $2.1 million, or approximately $0.04 per diluted share, for the settlement of a previously disclosed lawsuit.

Total net sales for the six months (26 weeks) ended July 30, 2011 increased 16.7% to $218.1 million from $186.8 million reported for the six months (26 weeks) ended July 31, 2010. The Company reported net income of $4.5 million or $0.14 per diluted share in the first six months of fiscal 2011 compared to a net loss in the first six months of the prior fiscal year of $3.1 million or $0.10 per diluted share. Results for the first six months of fiscal 2010 include costs of $2.2 million, or approximately $0.05 per diluted share, associated with the relocation of the Company's distribution center, and $2.1 million, or approximately $0.04 per diluted share, for the settlement of a previously disclosed lawsuit. Comparable store sales increased 9.9% in the first six months of fiscal 2011 on top of 9.2% for the first six months of 2010.

At July 30, 2011, the Company had cash and current marketable securities of $131.9 million compared to cash and current marketable securities of $91.3 million at July 31, 2010.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "We are pleased with the sales and earnings growth we delivered for the quarter. Our merchandise and expansion strategies are driving improvements across our business and are continuing to strengthen Zumiez's position as the leading action sports retailer. We remain optimistic that our diverse product offering, compelling mix of brands, and commitment to customer service will distinguish our concept further from the promotional competition and provide us with strategic advantages during the key upcoming selling seasons."

August 2011 Sales

Total net sales for the four-week period ended August 27, 2011 increased 10.9% to $65.9 million, compared to $59.4 million for the four-week period ended August 28, 2010. The Company's comparable store sales increased 4.3% for the four-week period on top of a comparable store sales increase of 9.1% in the year ago period.

Third Quarter 2011 Outlook

The Company is introducing guidance for the three months ending October 29, 2011 of net income per diluted share of approximately $0.37 to $0.39 per diluted share. This guidance is based on an anticipated comparable store sales increase in the low single digit range for the third quarter of fiscal 2011.

The Company currently intends to open approximately 45 new stores in fiscal 2011, including its first stores in Canada, with an opening cadence similar to fiscal 2010.

A conference call will be held today to discuss second quarter 2011 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (617) 614-3669 followed by the conference identification code of 67795294.

About Zumiez Inc.

Zumiez is a leading specialty retailer of action sports related apparel, footwear, equipment and accessories. Our stores cater to young men and women between ages 12-24, focusing on skateboarding, surfing, snowboarding, motocross and BMX. As of August 27, 2011 we operated 425 stores in the United States and 6 stores in Canada, which are primarily located in shopping malls, and our web site address is www.zumiez.com.

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-Q for the quarter ended April 30, 2011 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 OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
			Three Months Ended
			July 30, 2011			% of Sales			July 31, 2010				% of Sales
Net sales			$	112,213		100.0	%		$	97,702			100.0	%
Cost of goods sold				74,916		66.8	%			67,203			68.8	%
Gross profit				37,297		33.2	%			30,499			31.2	%
Selling, general and administrative expenses				33,747		30.0	%			32,867			33.6	%
Operating profit (loss)				3,550		3.2	%			(2,368	)		(2.4	%)
Interest income, net				434		0.4	%			352			0.4	%
Other income, net				3		0.0	%			47			0.0	%
Earnings (loss) before income taxes				3,987		3.6	%			(1,969	)		(2.0	%)
Provision (benefit) for income taxes				1,396		1.3	%			(755	)		(0.8	%)
Net income (loss)			$	2,591		2.3	%		$	(1,214	)		(1.2	%)
Basic earnings (loss) per share			$	0.08					$	(0.04	)
Diluted earnings (loss) per share			$	0.08					$	(0.04	)
Weighted average shares used in computation of earnings (loss) per share:
	Basic			30,521						29,954
	Diluted			31,081						29,954

ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
			Six Months Ended
			July 30, 2011			% of Sales			July 31, 2010				% of Sales
Net sales			$	218,064		100.0	%		$	186,798			100.0	%
Cost of goods sold				147,345		67.6	%			130,801			70.0	%
Gross profit				70,719		32.4	%			55,997			30.0	%
Selling, general and administrative expenses				64,617		29.6	%			61,619			33.0	%
Operating profit (loss)				6,102		2.8	%			(5,622	)		(3.0	%)
Interest income, net				947		0.5	%			717			0.4	%
Other income, net				58		0.0	%			71			0.0	%
Earnings (loss) before income taxes				7,107		3.3	%			(4,834	)		(2.6	%)
Provision (benefit) for income taxes				2,630		1.2	%			(1,720	)		(0.9	%)
Net income (loss)			$	4,477		2.1	%		$	(3,114	)		(1.7	%)
Basic earnings (loss) per share			$	0.15					$	(0.10	)
Diluted earnings (loss) per share			$	0.14					$	(0.10	)
Weighted average shares used in computation of earnings (loss) per share:
	Basic			30,432						29,846
	Diluted			31,072						29,846

ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
			July 30,			January 29,				July 31,
			2011			2011				2010
Assets			(Unaudited)							(Unaudited)
Current assets
Cash and cash equivalents			$	14,157		$	11,357			$	6,842
Marketable securities				117,744			117,444				84,475
Receivables				10,690			6,129				8,375
Income taxes receivable				1,894			-				2,988
Inventories				84,394			56,303				78,691
Prepaid expenses and other				7,669			7,210				7,653
Deferred tax assets				2,328			2,418				3,280
	Total current assets			238,876			200,861				192,304
Fixed assets, net				83,713			78,248				78,092
Goodwill and other intangibles				13,154			13,154				13,161
Long-term deferred tax assets				4,211			5,703				6,658
Long-term investments				2,808			2,766				2,787
Long-term other assets				605			899				1,164
	Total long-term assets			104,491			100,770				101,862
	Total assets		$	343,367		$	301,631			$	294,166
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable			$	50,657		$	16,371			$	48,327
Accrued payroll and payroll taxes				6,074			7,580				5,572
Income taxes payable				-			4,108				-
Deferred rent and tenant allowances				4,138			3,719				3,614
Other liabilities				12,611			13,683				12,429
	Total current liabilities			73,480			45,461				69,942
Long-term deferred rent and tenant allowances				31,501			27,629				28,046
Long-term other liabilities				1,899			1,806				1,759
	Total long-term liabilities			33,400			29,435				29,805
	Total liabilities			106,880			74,896				99,747
Commitments and contingencies
Shareholders' equity
Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding				—			—				—
Common stock, no par value, 50,000 shares authorized; 31,094 shares issued and outstanding at July 30, 2011, 30,835 shares issued and outstanding at January 29, 2011 and 30,600 shares issued and outstanding at July 31, 2010				96,468			91,373				86,345
Accumulated other comprehensive income (loss)				163			(17	)			12
Retained earnings				139,856			135,379				108,062
	Total shareholders' equity			236,487			226,735				194,419
	Total liabilities and shareholders' equity		$	343,367		$	301,631			$	294,166