SOURCE: Zumiez

June 04, 2015 16:01 ET

Zumiez Inc. Announces Fiscal 2015 First Quarter Results

LYNNWOOD, WA--(Marketwired - Jun 4, 2015) - Zumiez Inc. (NASDAQ: ZUMZ) a leading specialty retailer of action sports related apparel, footwear, equipment and accessories, today reported results for the first quarter ended May 2, 2015.

Total net sales for the first quarter ended May 2, 2015 (13 weeks) increased 9.0% to $177.6 million from $162.9 million in the first quarter ended May 3, 2014 (13 weeks). Comparable sales for the thirteen weeks ended May 2, 2015 increased 3.0% compared to a comparable sales increase of 1.8% in the first quarter of 2014. Net income in the first quarter of fiscal 2015 was $2.8 million, or $0.09 per diluted share, compared to net income of $2.5 million, or $0.09 per diluted share, in the first quarter of the prior fiscal year. The results for the first quarter of 2015 include costs of approximately $1.1 million, or $0.03 per diluted share, for charges associated with the acquisition of Blue Tomato, and the results for the first quarter of 2014 include approximately $0.6 million, or $0.01 per diluted share, for charges associated with the acquisition of Blue Tomato.

At May 2, 2015, the Company's cash and current marketable securities increased 40.0% to $150.9 million compared to cash and current marketable securities of $107.8 million at May 3, 2014. The increase in cash and current marketable securities is a result of cash generated through operations, partially offset by capital expenditures.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "We delivered first quarter results that were in-line with our expectations. While the pace of our domestic business slowed more than anticipated in April, this was offset by strong sales gains in Europe where growth momentum continues. Overall, we remain confident that our omnichannel strategy, authentic lifestyle positioning, and commitment to customer service provide us with strong competitive advantages that will deliver increased profitability and greater shareholder value over the long-term."

May 2015 Sales

Total net sales for the four-week period ended May 30, 2015 increased 4.1% to $51.5 million, compared to $49.5 million for the four-week period ended May 31, 2014. The Company's comparable sales decreased 2.2% for the four-week period ended May 30, 2015 compared to a comparable sales increase of 3.6% for the four-week period ended May 31, 2014.

Fiscal 2015 Second Quarter Outlook

The Company is introducing guidance for the three months ending August 1, 2015. Net sales are projected to be in the range of $179 to $183 million resulting in net income per diluted share of approximately $0.12 to $0.15, which includes an estimated $0.4 million, or approximately $0.01 per diluted share, for charges associated with the acquisition of Blue Tomato. This guidance is based on an anticipated comparable sales decrease in the (5%) to (3%) range for the second quarter of fiscal 2015. The Company currently intends to open approximately 57 new stores in fiscal 2015, including up to 7 stores in Canada and 6 stores in Europe.

A conference call will be held today to discuss first quarter fiscal 2015 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com.  Participants may also dial (617) 399-5135 followed by the conference identification code of 40996399.

About Zumiez Inc.

Zumiez is a leading multi-channel specialty retailer of action sports related apparel, footwear, equipment and accessories, focusing on skateboarding, snowboarding, surfing, motocross and BMX for young men and women. As of May 30, 2015 we operated 627 stores, including 567 in the United States, 38 in Canada, and 22 in Europe. We operate under the name Zumiez and Blue Tomato. Additionally, we operate ecommerce web sites at www.zumiez.com and www.blue-tomato.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-K for the year ended February 1, 2014 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  
                     
    May 2, 2015   % of Sales     May 3, 2014   % of Sales  
Net sales   $ 177,610   100.0 %   $ 162,932   100.0 %
Cost of goods sold     121,075   68.2 %     112,399   69.0 %
Gross profit     56,535   31.8 %     50,533   31.0 %
                         
Selling, general and administrative expenses     52,409   29.5 %     46,820   28.7 %
Operating profit     4,126   2.3 %     3,713   2.3 %
                         
Interest income, net     205   0.1 %     182   0.1 %
Other income, net     115   0.1 %     86   0.0 %
Earnings before income taxes     4,446   2.5 %     3,981   2.4 %
                         
Provision for income taxes     1,676   0.9 %     1,485   0.9 %
                         
Net income   $ 2,770   1.6 %   $ 2,496   1.5 %
                         
Basic earnings per share   $ 0.10         $ 0.09      
                         
Diluted earnings per share   $ 0.09         $ 0.09      
                         
Weighted average shares used in computation of earnings per share:                        
  Basic     29,141           28,861      
                         
  Diluted     29,486           29,213      
                         
 
ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 
      May 2,     January 31,     May 3,
      2015     2015     2014
Assets   (Unaudited)           (Unaudited)
Current assets                      
Cash and cash equivalents   $ 11,806     $ 20,862     $ 21,079
Marketable securities     139,048       133,782       86,682
Receivables     14,401       12,653       11,478
Inventories     104,091       93,850       97,608
Prepaid expenses and other     11,117       11,651       9,874
Deferred tax assets     7,532       6,965       6,163
  Total current assets     287,995       279,763       232,884
                       
Fixed assets, net     140,320       135,642       131,577
Goodwill     55,478       55,852       65,432
Intangible assets, net     12,460       13,062       17,803
Long-term other assets     9,294       9,386       6,759
  Total long-term assets     217,552       213,942       221,571
                       
  Total assets   $ 505,547     $ 493,705     $ 454,455
                       
Liabilities and Shareholders' Equity                      
Current liabilities                      
Trade accounts payable   $ 39,525     $ 32,094     $ 42,989
Accrued payroll and payroll taxes     9,168       13,047       8,070
Income taxes payable     732       4,651       2,324
Deferred rent and tenant allowances     7,448       7,083       6,574
Other liabilities     29,276       24,572       20,471
  Total current liabilities     86,149       81,447       80,428
                       
Long-term deferred rent and tenant allowances     44,761       42,553       41,995
Long-term deferred tax liabilities     4,542       5,738       3,871
Long-term debt and other liabilities     5,669       4,443       4,022
  Total long-term liabilities     54,972       52,734       49,888
                       
  Total liabilities     141,121       134,181       130,316
                         
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; 29,535 shares issued and outstanding at May 2, 2015, and 29,418 shares issued and outstanding at January 31, 2015     131,715       129,094       116,111
Accumulated other comprehensive income     (11,767 )     (11,278 )     7,011
Retained earnings     244,478       241,708       201,017
  Total shareholders' equity     364,426       359,524       324,139
                       
  Total liabilities and shareholders' equity   $ 505,547     $ 493,705     $ 454,455
                       
   
ZUMIEZ INC.  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
(In thousands)  
(Unaudited)  
   
    Three Months Ended  
    May 2, 2015     May 3, 2014  
Cash flows from operating activities:                
Net income   $ 2,770     $ 2,496  
Adjustments to reconcile net income to net cash provided by operating activities:                
Depreciation, amortization and accretion     7,797       7,009  
Deferred taxes     (622 )     (1,869 )
Stock-based compensation expense     1,572       948  
Excess tax benefit from stock-based compensation     (689 )     62  
Other     (76 )     (26 )
  Changes in operating assets and liabilities:                
    Receivables     (1,617 )     (1,115 )
    Inventories     (10,187 )     (10,011 )
    Prepaid expenses and other     605       (2,480 )
    Trade accounts payable     7,726       24,635  
    Accrued payroll and payroll taxes     (3,891 )     (2,543 )
    Income taxes payable     (3,355 )     (2,448 )
    Deferred rent and tenant allowances     2,444       4,374  
    Other liabilities     (789 )     (2,462 )
Net cash provided by operating activities     1,688       16,570  
                 
Cash flows from investing activities:                
Additions to fixed assets     (8,818 )     (6,781 )
Purchases of marketable securities and other investments     (35,037 )     (11,714 )
Sales and maturities of marketable securities and other investments     29,074       22,100  
Net cash (used in) provided by investing activities     (14,781 )     3,605  
                 
Cash flows from financing activities:                
Proceeds from revolving credit facilities     4,310       634  
Payments on long-term debt and revolving credit facilities     (1,271 )     (81 )
Repurchase of common stock     -       (19,553 )
Proceeds from exercise of stock-based compensation, net of withholding tax payments     367       242  
Excess tax benefit (loss) from stock-based compensation     689       (62 )
Net cash provided by (used in) financing activities     4,095       (18,820 )
                 
Effect of exchange rate changes on cash and cash equivalents     (58 )     90  
                 
Net (decrease) increase in cash and cash equivalents     (9,056 )     1,445  
  Cash and cash equivalents, beginning of period     20,862       19,634  
  Cash and cash equivalents, end of period   $ 11,806     $ 21,079  
                 
  Supplemental disclosure on cash flow information:                
  Cash paid during the period for income taxes, net of refunds   $ 5,667     $ 5,783  
  Accrual for purchases of fixed assets     4,489       4,480  
                 

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