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

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