Zumiez Inc. Announces Fiscal 2019 First Quarter Results
June 06, 2019: 04:10 PM ET
First Quarter Earnings Per Share Improved to $0.03 First Quarter Comparable Sales Increased 3.3%
LYNNWOOD, Wash., June 06, 2019 (GLOBE NEWSWIRE) -- 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 May 4, 2019.
Total net sales for the first quarter ended May 4, 2019 (13 weeks) increased 3.2% to $212.9 million from $206.3 million in the first quarter ended May 5, 2018 (13 weeks). Comparable sales for the thirteen weeks ended May 4, 2019 increased 3.3% on top of a comparable sales increase of 8.3% for the thirteen weeks ended May 5, 2018. Net income in the first quarter of fiscal 2019 was $0.8 million, or $0.03 per diluted share, compared to a net loss of $2.6 million, or $0.10 per diluted share, in the first quarter of the prior fiscal year.
At May 4, 2019, cash and current marketable securities increased 42.4% to $168.0 million, compared to cash and current marketable securities of $118.0 million at May 5, 2018. The increase in cash and current marketable securities was driven by cash generated through operations partially offset by capital expenditures.
“We delivered better than expected results to start the year due to strong performance in the last two months of the first quarter,” commented Rick Brooks, Chief Executive Officer of Zumiez Inc. “Our performance reflects a continuation of our strategy focusing on full price, full margin selling and leveraging our broad assortment to service the customer. Our customer-focused execution continues to drive comparable sales gains and margin expansion and the operating model we have built around a singular cost structure continues to generate increased profitability. With our distinct approach to retailing, authentic brand positioning and strong balance sheet, I am confident that Zumiez is poised to capture additional market share and return increased value to shareholders in the near and long-term.”
May 2019 Sales The Company's comparable sales increased 2.4% for the four-week period ended June 1, 2019 compared to a comparable sales increase of 7.5% for the four-week period ended June 2, 2018.
Fiscal 2019 Second Quarter Outlook The Company is introducing guidance for the three months ending August 3, 2019. Net sales are projected to be in the range of $220 million to $224 million including anticipated comparable sales growth of between 0.0% and 2.0%. Consolidated operating margins are expected to be between 2.2% and 3.2% resulting in net income per share of approximately $0.14 to $0.20. The Company currently intends to open approximately 15 new stores in fiscal 2019, including up to 6 stores in North America, 7 stores in Europe and 2 stores in Australia.
A conference call will be held today to discuss first quarter fiscal 2019 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (570) 990-9934 followed by the conference identification code of 9089741.
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 June 1, 2019, we operated 707 stores, including 606 in the United States, 50 in Canada, 42 in Europe and 9 in Australia. We operate under the names Zumiez, Blue Tomato and Fast Times. Additionally, we operate ecommerce web sites at zumiez.com, zumiez.ca, blue-tomato.com and 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 February 2, 2019 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 INCOME (LOSS) (In thousands, except per share amounts) (Unaudited)
Three Months Ended
May 4, 2019
% of Sales
May 5, 2018
% of Sales
Net sales
$
212,928
100.0%
$
206,287
100.0%
Cost of goods sold
146,464
68.8%
143,700
69.7%
Gross profit
66,464
31.2%
62,587
30.3%
Selling, general and administrative expenses
65,496
30.7%
64,296
31.1%
Operating profit (loss)
968
0.5%
(1,709
)
(0.8%)
Interest income, net
852
0.4%
283
0.0%
Other income (expense), net
153
0.0%
(482
)
(0.1%)
Earnings (loss) before income taxes
1,973
0.9%
(1,908
)
(0.9%)
Provision for income taxes
1,180
0.5%
699
0.4%
Net income (loss)
$
793
0.4%
$
(2,607
)
(1.3%)
Basic earnings (loss) per share
$
0.03
$
(0.10
)
Diluted earnings (loss) per share
$
0.03
$
(0.10
)
Weighted average shares used in computation of earnings (loss) per share:
Basic
25,090
24,831
Diluted
25,351
24,831
ZUMIEZ INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
May 4, 2019
February 2, 2019
May 5, 2018
(Unaudited)
(Unaudited)
Assets
Current assets
Cash and cash equivalents
$
60,616
$
52,422
$
29,063
Marketable securities
107,364
112,912
88,918
Receivables
15,083
17,776
18,466
Inventories
135,959
129,268
128,244
Prepaid expenses and other current assets
9,616
14,797
13,898
Total current assets
328,638
327,175
278,589
Fixed assets, net
116,830
120,503
126,047
Operating lease right-of-use assets
301,980
—
—
Goodwill
57,682
58,813
60,832
Intangible assets, net
14,852
15,260
15,955
Deferred tax assets, net
6,312
5,259
3,288
Other long-term assets
8,442
7,180
6,993
Total long-term assets
506,098
207,015
213,115
Total assets
$
834,736
$
534,190
$
491,704
Liabilities and Shareholders’ Equity
Current liabilities
Trade accounts payable
$
54,454
$
35,293
$
45,980
Accrued payroll and payroll taxes
15,302
21,015
15,132
Income taxes payable
65
5,817
359
Deferred rent and tenant allowances
—
7,489
7,873
Operating lease liabilities
54,469
—
4,696
Other liabilities
19,675
23,494
21,194
Total current liabilities
143,965
93,108
95,234
Long-term deferred rent and tenant allowances
—
37,076
39,217
Long-term operating lease liabilities
293,375
—
—
Other long-term liabilities
3,436
3,550
4,768
Total long-term liabilities
296,811
40,626
43,985
Total liabilities
440,776
133,734
139,219
Shareholders’ equity
Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding
—
—
—
Common stock, no par value, 50,000 shares authorized; 25,741 shares issued and outstanding at May 4, 2019 and 25,521 shares issued and outstanding at February 2, 2019 and 25,470 shares issued and outstanding at May 5, 2018
155,104
153,066
148,591
Accumulated other comprehensive loss
(12,275)
(9,224)
(4,908)
Retained earnings
251,131
256,614
208,802
Total shareholders’ equity
393,960
400,456
352,485
Total liabilities and shareholders’ equity
$
834,736
$
534,190
$
491,704
ZUMIEZ INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Three Months Ended
May 4, 2019
May 5, 2018
Cash flows from operating activities:
Net income (loss)
$
793
$
(2,607
)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation, amortization and accretion
6,263
6,970
Noncash lease expense
13,371
—
Deferred taxes
1,249
217
Stock-based compensation expense
1,693
1,642
Other
224
588
Changes in operating assets and liabilities:
Receivables
4,708
(1,096
)
Inventories
(7,540
)
(3,781
)
Prepaid expenses and other assets
(167
)
857
Trade accounts payable
19,568
7,723
Accrued payroll and payroll taxes
(5,636
)
(5,383
)
Income taxes payable
(7,104
)
(5,993
)
Deferred rent and tenant allowances
—
(32
)
Operating lease liabilities
(13,770
)
—
Other liabilities
(3,790
)
(2,997
)
Net cash provided by (used in) operating activities
9,862
(3,892
)
Cash flows from investing activities:
Additions to fixed assets
(3,331
)
(3,585
)
Purchases of marketable securities and other investments
(33,385
)
(12,932
)
Sales and maturities of marketable securities and other investments
39,001
21,590
Net cash provided by investing activities
2,285
5,073
Cash flows from financing activities:
Proceeds from revolving credit facilities
—
17,245
Payments on revolving credit facilities
—
(13,347
)
Proceeds from issuance and exercise of stock-based awards
583
621
Payments for tax withholdings on equity awards
(238
)
(195
)
Net cash provided by financing activities
345
4,324
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
(466
)
(497
)
Net increase in cash, cash equivalents, and restricted cash
12,026
5,008
Cash, cash equivalents, and restricted cash, beginning of period
54,271
25,803
Cash, cash equivalents, and restricted cash, end of period
$
66,297
$
30,811
Supplemental disclosure on cash flow information:
Cash paid during the period for income taxes
$
7,038
$
6,442
Accrual for purchases of fixed assets
1,583
2,872
Company Contact: Darin White Director of Finance & Investor Relations Zumiez Inc. (425) 551-1500, ext. 1337