SOURCE: Zumiez

August 31, 2011 16:00 ET

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

Second Quarter Sales Increased 14.9% to $112.2 Million; Second Quarter 2011 Diluted EPS Improved to $0.08; August 2011 Comparable Store Sales Increased 4.3%

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

Contact Information

  • Company Contact:
    Brian Leith
    Director of Finance &
    Investor Relations
    Zumiez Inc.
    (425) 551-1500, ext. 1610

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