SOURCE: Zumiez

June 01, 2017 16:05 ET

Zumiez Inc. Announces Fiscal 2017 First Quarter Results

LYNNWOOD, WA--(Marketwired - Jun 1, 2017) -  Zumiez Inc. (NASDAQ: ZUMZ), a leading specialty retailer of apparel, footwear, equipment and accessories for young men and women, today reported results for the first quarter ended April 29, 2017.

Total net sales for the first quarter ended April 29, 2017 (13 weeks) increased 4.7% to $181.2 million from $173.0 million in the first quarter ended April 30, 2016 (13 weeks). Comparable sales for the thirteen weeks ended April 29, 2017 increased 1.8% compared to a comparable sales decrease of 7.5% in the first quarter of 2016. Net loss in the first quarter of fiscal 2017 was $4.4 million, or ($0.18) per diluted share, compared to a net loss of $2.1 million, or ($0.08) per diluted share, in the first quarter of the prior fiscal year. 

At April 29, 2017, the Company had cash and current marketable securities of $76.5 million, compared to cash and current marketable securities of $62.1 million at April 30, 2016. The increase in cash and current marketable securities was driven by cash generated through operations partially offset by capital expenditures, stock repurchases and cash used in the acquisition of Fast Times.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "The combination of our authentic brand positioning, on-trend merchandise assortments, engaging sales experiences and advanced omni-channel capabilities contributed to first quarter comparable sales that were towards the high-end of our guidance range. Our teams are doing a good job striking a balance between achieving near-term targets in a challenging retail environment and executing strategies that are laying the foundation for long-term profitable growth. I am confident we are on the right course to grow both sales and earnings to generate value for our shareholders."

May 2017 Sales

Total net sales for the four-week period ended May 27, 2017 increased 6.5% to $53.2 million, compared to $50.0 million for the four-week period ended May 28, 2016. The Company's comparable sales increased 3.3% for the four-week period ended May 27, 2017 compared to a comparable sales decrease of 7.6% for the four-week period ended May 28, 2016. 

Fiscal 2017 Second Quarter Outlook

The Company is introducing guidance for the three months ending July 29, 2017. Net sales are projected to be in the range of $185 to $189 million resulting in net loss per diluted share of approximately -$0.06 to -$0.11. This guidance is based on an anticipated comparable sales increase in the 1% to 3% range for the second quarter of fiscal 2017. The Company currently intends to open approximately 19 new stores in fiscal 2017, including up to 3 stores in Canada, 4 stores in Europe and 2 stores in Australia.

A conference call will be held today to discuss first quarter fiscal 2017 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (574) 990-9934 followed by the conference identification code of 28875361. 

About Zumiez Inc.

Zumiez is a leading specialty retailer of apparel, footwear, accessories and hardgoods for young men and women who want to express their individuality through the fashion, music, art and culture of action sports, streetwear, and other unique lifestyles. As of May 27, 2017 we operated 690 stores, including 603 in the United States, 51 in Canada, and 30 in Europe and 6 in Australia. We operate under the names Zumiez, Blue Tomato and Fast Times. Additionally, we operate ecommerce web sites at www.zumiez.com, www.blue-tomato.com and https://fasttimes.com.au/.

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 fiscal year ended January 28, 2017 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 LOSS
(In thousands, except per share amounts)
(Unaudited)
 
  Three Months Ended
                   
    April 29, 2017   % of Sales     April 30, 2016   % of Sales
Net sales $ 181,155   100.0%   $ 172,970   100.0%
Cost of goods sold   129,106   71.3%     123,012   71.1%
Gross profit   52,049   28.7%     49,958   28.9%
                   
Selling, general and administrative expenses   58,283   32.2%     53,899   31.2%
Operating loss   (6,234)   (3.5%)     (3,941)   (2.3%)
                   
Interest income, net   82   0.1%     31   0.0%
Other (expense) income, net   (450)   (0.2%)     499   0.3%
Loss before income taxes   (6,602)   (3.6%)     (3,411)   (2.0%)
                   
Benefit from income taxes   (2,154)   (1.1%)     (1,274)   (0.7%)
                   
Net loss $ (4,448)   (2.5%)   $ (2,137)   (1.3%)
                   
Basic loss per share $ (0.18)       $ (0.08)    
                   
Diluted loss per share $ (0.18)       $ (0.08)    
                   
Weighted average shares used in computation of loss per share:                  
  Basic   24,580         25,185    
                   
  Diluted   24,580         25,185    
 
 
 
ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
                 
  April 29,   January 28,   April 30,
2017 2017   2016
Assets (Unaudited)         (Unaudited)
Current assets            
Cash and cash equivalents $ 22,320   $ 20,247   $ 16,890
Marketable securities   54,175     58,579     45,236
Receivables   13,992     12,538     13,234
Inventories   122,406     106,924     112,971
Prepaid expenses and other current assets   13,162     13,075     12,282
  Total current assets   226,055     211,363     200,613
                 
Fixed assets, net   132,582     129,651     138,156
Goodwill   56,761     56,001     56,157
Intangible assets, net   14,816     14,610     12,313
Deferred tax assets, net   9,061     7,041     6,362
Other long-term assets   8,161     8,017     8,547
  Total long-term assets   221,381     215,320     221,535
                 
  Total assets $ 447,436   $ 426,683   $ 422,148
                 
Liabilities and Shareholders' Equity                
Current liabilities                
Trade accounts payable $ 53,394   $ 25,529   $ 44,922
Accrued payroll and payroll taxes   11,410     14,914     10,074
Income taxes payable   67     1,866     28
Deferred rent and tenant allowances   8,425     8,344     8,229
Other liabilities   22,501     22,944     20,863
  Total current liabilities   95,797     73,597     84,116
                 
Long-term deferred rent and tenant allowances   41,181     41,066     43,932
Other long-term liabilities   4,889     4,969     4,800
  Total long-term liabilities   46,070     46,035     48,732
                 
  Total liabilities   141,867     119,632     132,848
                 
Shareholders' equity                
Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding   --     --     --
Common stock, no par value, 50,000 shares authorized; 25,196 shares issued and outstanding at April 29, 2017, 24,945 shares issued and outstanding at January 28, 2017, and 25,330 shares issued and outstanding at April 30, 2016   142,460     140,984     136,028
Accumulated other comprehensive loss   (14,998)     (16,488)     (10,260)
Retained earnings   178,107     182,555     163,532
  Total shareholders' equity   305,569     307,051     289,300
                 
  Total liabilities and shareholders' equity $ 447,436   $ 426,683   $ 422,148
                 
                 
       
ZUMIEZ INC.  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
(In thousands)  
(Unaudited)  
   
  Three Months Ended  
  April 29, 2017   April 30, 2016  
Cash flows from operating activities:            
Net loss $ (4,448 ) $ (2,137 )
Adjustments to reconcile net loss to net cash provided by operating activities:            
Depreciation, amortization and accretion   6,660     7,222  
Deferred taxes   (2,033 )   (1,586 )
Stock-based compensation expense   1,278     1,035  
Other   385     (176 )
  Changes in operating assets and liabilities:            
    Receivables   (135 )   548  
    Inventories   (15,408 )   (13,125 )
    Prepaid expenses and other current assets   (209 )   (545 )
    Trade accounts payable   27,919     22,617  
    Accrued payroll and payroll taxes   (3,525 )   (2,523 )
    Income taxes payable   (3,199 )   (5,145 )
    Deferred rent and tenant allowances   328     (139 )
    Other liabilities   (2,946 )   (3,341 )
Net cash provided by operating activities   4,667     2,705  
             
Cash flows from investing activities:            
Additions to fixed assets   (7,117 )   (4,485 )
Purchases of marketable securities and other investments   (20,006 )   (26,854 )
Sales and maturities of marketable securities and other investments   24,370     13,761  
Net cash used in investing activities   (2,753 )   (17,578 )
             
Cash flows from financing activities:            
Repurchase of common stock   -     (12,248 )
Proceeds from issuance and exercise of stock-based awards   370     526  
Payments for tax withholdings on equity awards   (172 )   (121 )
Net cash provided by (used in) financing activities   198     (11,843 )
             
Effect of exchange rate changes on cash and cash equivalents   (39 )   443  
             
Net increase (decrease) in cash and cash equivalents   2,073     (26,273 )
  Cash and cash equivalents, beginning of period   20,247     43,163  
  Cash and cash equivalents, end of period $ 22,320   $ 16,890  
             
  Supplemental disclosure on cash flow information:            
  Cash paid during the period for income taxes $ 3,074   $ 5,470  
  Accrual for purchases of fixed assets   3,601     3,309  
  Accrual for repurchase of common stock   -     341  
             

Contact Information

  • Company Contact:
    Darin White
    Director of Finance &
    Investor Relations
    Zumiez Inc.
    (425) 551-1500, ext. 1337

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