Zumiez Q3 Sales Up .8%, Profits Down 25%

mike lewis

• November 20 2009
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Zumiez Inc. (NASDAQ: ZUMZ) announced that sales for the third quarter ended October 31, 2009 were up 0.8% to $113.2 million from $112.2 million last year. Net income for the period was $5.1 million, down 25 % from $6.8 million last year. Comparable store sales dropped 8% during the third quarter from last year, which was down 5.8% from the year before.

“I want to credit our entire team for our better than expected third quarter performance,” says CEO Rick Brooks. “By carefully managing our inventory, working closely with our branded and private label vendors to design programs that would deliver improved merchandise margins, and finding ways to inspire consumers who visited our stores, we were able to exceed our initial third quarter expectations and saw a meaningful improvement in our same store sales trends relative to the first half of fiscal 2009. Our results are particularly encouraging given that overall traffic and spending patterns continued to be volatile and the difficult macroeconomic environment continues. Although still challenging, we are also pleased to have seen some improved trends in certain of our larger, Western markets, most notably California. Looking ahead, we believe we have a good plan in place for the Holiday season.”

According to the release:

Total net sales for the first nine months (39 weeks) ended October 31, 2009 decreased 2.8% to $275.2 million from $283.2 million reported in the first nine months (39 weeks) of the prior year. The Company posted net income of $0.3 million or $0.01 per diluted share in the first nine months of fiscal 2009 compared to net income in the first nine months of the prior fiscal year of $10.9 million or $0.37 per diluted share. Results for the first nine months of fiscal 2009 include a charge of approximately $1.3 million, or $0.03 per diluted share, associated with the proposed settlement agreement of a previously disclosed lawsuit. Comparable store sales decreased 13.6% in the first nine months of fiscal 2009 compared with a decrease of 3.2% for the first nine months of 2008.

Outlook:

The Company is introducing guidance for the three months ending January 30, 2010 of net income of approximately $0.18 to $0.22 per diluted share. This guidance is based on an anticipated comparable store sales decline in the high-to-mid single digit range for the fourth quarter of fiscal 2009.

We have opened all 36 new stores in fiscal 2009.

To listen to the conference call go to http://ir.zumiez.com. Participants may also dial (617) 614-3453 followed by the conference identification code of 18887706.