SOURCE: Zumiez

December 01, 2011 16:00 ET

Zumiez Inc. Announces Fiscal 2011 Third Quarter Results and November 2011 Sales

Third Quarter Sales Increased 13.3% to $154.0 Million; Third Quarter Diluted EPS Increased 12.5% to $0.45; November 2011 Comparable Store Sales Increased 8.4%

EVERETT, WA--(Marketwire - Dec 1, 2011) - Zumiez Inc. (NASDAQ: ZUMZ), a leading specialty retailer of action sports related apparel, footwear, equipment and accessories, today reported record third quarter results for the quarter ended October 29, 2011.

Total net sales for the third quarter (13 weeks) ended October 29, 2011 increased 13.3% to $154.0 million from $135.9 million reported in the third quarter (13 weeks) ended October 30, 2010. Comparable store sales for the third quarter of fiscal 2011 increased 6.0% on top of a comparable store sales increase of 14.4% in the third quarter of fiscal 2010. Net income in the third quarter of fiscal 2011 increased 14.8% to $14.1 million, or $0.45 per diluted share from net income of $12.3 million, or $0.40 per diluted share in the third quarter of the prior fiscal year.

Total net sales for the nine months (39 weeks) ended October 29, 2011 increased 15.3% to $372.0 million from $322.7 million reported for the nine months (39 weeks) ended October 30, 2010. The Company reported net income of $18.6 million, or $0.60 per diluted share in the first nine months of fiscal 2011 compared to net income in the first nine months of the prior fiscal year of $9.2 million, or $0.30 per diluted share. Results for the first nine months of fiscal 2010 include costs of $2.4 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 8.3% in the first nine months of fiscal 2011 on top of a comparable store sales increase of 11.3% in the first nine months of fiscal 2010.

At October 29, 2011, the Company had cash and current marketable securities of $137.1 million compared to cash and current marketable securities of $98.9 million at October 30, 2010.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "Our merchandise, new store opening, and ecommerce strategies once again allowed us to deliver on our goal of consistent sales and earnings growth. During the third quarter we continued to execute on key initiatives aimed at driving productivity, expanding our geographic footprint, and bringing our unique in-store experience to the internet. We are pleased with the current pace of growth for our business and believe our product assortment has us well positioned for the remainder of the holiday selling period."

November 2011 Sales

Total sales for the four-week period ended November 26, 2011 increased 16.2% to $46.9 million, compared to $40.4 million for the four-week period ended November 27, 2010. The Company's comparable store sales increased 8.4% for the four-week period on top of a comparable store sales increase of 20.7% increase in the year ago period.

Fourth Quarter 2011 Outlook

The Company is introducing guidance for the three months ending January 28, 2012 of net income per diluted share of approximately $0.52 to $0.54. This guidance is based on an anticipated comparable store sales increase in the mid single digit range and total sales in the range of $174 to $177 million for the fourth quarter of fiscal 2011.

We have opened all 45 new stores planned in fiscal 2011, including our first stores in Canada.
A conference call will be held today to discuss third quarter 2011 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (617)-597-5378 followed by the conference identification code of 45036960.

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 November 26, 2011 we operated 434 stores in the United States and 10 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 July 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
October 29, 2011 % of Sales October 30, 2010 % of Sales
Net sales $ 153,951 100.0 % $ 135,859 100.0 %
Cost of goods sold 93,807 60.9 % 83,267 61.3 %
Gross profit 60,144 39.1 % 52,592 38.7 %
Selling, general and administrative expenses 37,327 24.3 % 33,617 24.7 %
Operating profit 22,817 14.8 % 18,975 14.0 %
Interest income, net 440 0.3 % 370 0.3 %
Other (expense) income, net (129 ) (0.1 %) 32 0.0 %
Earnings before income taxes 23,128 15.0 % 19,377 14.3 %
Provision for income taxes 8,991 5.8 % 7,065 5.2 %
Net income $ 14,137 9.2 % $ 12,312 9.1 %
Basic earnings per share $ 0.46 $ 0.41
Diluted earnings per share $ 0.45 $ 0.40
Weighted average shares used in computation of earnings per share:
Basic 30,599 30,029
Diluted 31,122 30,762
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Nine Months Ended
October 29, 2011 % of Sales October 30, 2010 % of Sales
Net sales $ 372,015 100.0 % $ 322,657 100.0 %
Cost of goods sold 241,152 64.8 % 214,068 66.3 %
Gross profit 130,863 35.2 % 108,589 33.7 %
Selling, general and administrative expenses 101,944 27.4 % 95,236 29.6 %
Operating profit 28,919 7.8 % 13,353 4.1 %
Interest income, net 1,387 0.4 % 1,087 0.4 %
Other (expense) income, net (71 ) (0.1 %) 103 0.0 %
Earnings before income taxes 30,235 8.1 % 14,543 4.5 %
Provision for income taxes 11,621 3.1 % 5,345 1.6 %
Net income $ 18,614 5.0 % $ 9,198 2.9 %
Basic earnings per share $ 0.61 $ 0.31
Diluted earnings per share $ 0.60 $ 0.30
Weighted average shares used in computation of earnings per share:
Basic 30,487 29,908
Diluted 31,093 30,696
ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
October 29, January 29, October 30,
2011 2011 2010
Assets (Unaudited) (Unaudited)
Current assets
Cash and cash equivalents $ 13,881 $ 11,357 $ 8,314
Marketable securities 123,177 117,444 90,630
Receivables 8,717 6,129 6,854
Inventories 93,839 56,303 83,091
Prepaid expenses and other 8,235 7,210 7,867
Deferred tax assets 2,599 2,418 3,166
Total current assets 250,448 200,861 199,922
Fixed assets, net 87,597 78,248 77,646
Goodwill and other intangibles 13,154 13,154 13,154
Long-term deferred tax assets 3,415 5,703 5,740
Long-term investments 2,698 2,766 2,853
Long-term other assets 493 899 1,121
Total long-term assets 107,357 100,770 100,514
Total assets $ 357,805 $ 301,631 $ 300,436
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable $ 40,296 $ 16,371 $ 36,976
Accrued payroll and payroll taxes 8,489 7,580 8,194
Income taxes payable 6,224 4,108 2,765
Deferred rent and tenant allowances 4,225 3,719 3,695
Other liabilities 12,410 13,683 10,406
Total current liabilities 71,644 45,461 62,036
Long-term deferred rent and tenant allowances 32,506 27,629 28,085
Long-term other liabilities 1,942 1,806 1,801
Total long-term liabilities 34,448 29,435 29,886
Total liabilities 106,092 74,896 91,922
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; 31,129 shares issued and outstanding at October 29, 2011, 30,835 shares issued and outstanding at January 29, 2011 and 30,669 shares issued and outstanding at October 30, 2010 97,647 91,373 88,102
Accumulated other comprehensive income (loss) 73 (17 ) 38
Retained earnings 153,993 135,379 120,374
Total shareholders' equity 251,713 226,735 208,514
Total liabilities and shareholders' equity $ 357,805 $ 301,631 $ 300,436

Contact Information

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

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