Zumiez Q2 Sales Drop 7.7%
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- August 20 2009
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While Zumiez Q2 2009 results exceeded its initial projections, net sales still declined by 7.7% from the second quarter of 2008. The company posted a $3.1 million net loss compared to $2.7 million during the same period in 2008. Zumiez continues to have a positive attitude and expects things to turn around in the near future. Rick Brooks, Chief Executive Officer of Zumiez Inc., stated: “We are optimistic about our future growth prospects and the long-term potential of our business.”
Zumiez is planning on opening 36 new stores this year, an opening cadence similar to 2008.
To view the entire press release see below. To hear the conference call visit ir.zumiez.com.
Zumiez Inc. Announces Fiscal 2009 Second Quarter Results EVERETT, WA, Aug 20, 2009 (MARKETWIRE via COMTEX) — Zumiez Inc. (NASDAQ: ZUMZ) today reported results for the second quarter ended August 1, 2009.Total net sales for the second quarter (13 weeks) ended August 1, 2009 decreased 7.7% to $85.2 million from $92.3 million reported in the second quarter ended August 2, 2008 (13 weeks). The company posted a net loss for the quarter of $3.1 million or ($0.10) per diluted share for the fiscal 2009 second quarter. These results include a charge of $1.3 million, or approximately $0.03 per diluted share, associated with the settlement agreement of a previously disclosed lawsuit. Net income in the second quarter of the prior fiscal year was $2.7 million or $0.09 per diluted share. Comparable store sales for the second fiscal quarter of 2009 decreased 18.8% vs. a decrease of 1.7% for the second quarter of 2008.
Total net sales for the first six months (26 weeks) ended August 1, 2009 decreased 5.3% to $162.0 million from $171.0 million reported in the first six months of the prior year. The company posted a net loss of $4.7 million or ($0.16) per diluted share in the first six months of fiscal 2009 compared to net income in the first six months of the prior fiscal year of $4.1 million or $0.14 per diluted share. Results for the first six months of fiscal 2009 include a charge of $1.3 million, or approximately $0.03 per diluted share, associated with the settlement agreement of a previously disclosed lawsuit. Comparable store sales decreased 17.2% in the first six months of fiscal 2009 vs. a decrease of 1.3% for the first six months of 2008.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated: “As the second quarter progressed, we experienced improved sales trends throughout the majority of our store base which allowed us to once again exceed our initial projections. We have worked diligently to provide the consumer with merchandise assortments that are both trend right and compellingly priced while at the same time maintain our product margins and protect the integrity of our brands. Despite the weak and volatile market conditions, we are encouraged with our ability to effectively manage our inventory and improve our cash position during a time when consumer discretionary spending is down. While comparisons do begin to moderate in the back half of the year, we believe it is prudent to remain cautious with regard to our near-term outlook until consumer trends stabilize and visibility improves. That said, we are optimistic about our future growth prospects and the long-term potential of our business.”
Outlook
The Company is introducing guidance for the three months ending October 31, 2009 of net income of approximately $0.05 to $0.07 per diluted share. This guidance is based on an anticipated comparable store sales decline in the mid-to-low teen range for the third quarter of fiscal 2009.
We intend to open approximately 36 new stores in fiscal 2009 with an opening cadence similar to fiscal 2008.
A conference call will be held today to discuss second quarter results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (617)-213-4861 followed by the conference identification code of 46689110. Telephonic participants can reduce pre-call hold time by registering for the conference in advance via the following link:
https://www.theconferencingservice.com/prereg/key.process?key=PQPK4GQ3H
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 August 1, 2009 we operate 369 stores, which are primarily located in shopping malls and our web site address is www.zumiez.com.
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(Unaudited)
Three Months Ended
-------------------------------------------------
August 1, August 2,
2009 % of Sales 2008 % of Sales
---------- ---------- ----------- ----------
Net sales $ 85,170 100.0% $ 92,258 100.0%
Cost of goods sold 60,526 71.1% 62,155 67.4%
---------- ---------- ----------- ----------
Gross profit 24,644 28.9% 30,103 32.6%
Selling, general and
administrative expenses 29,870 35.0% 26,191 28.4%
---------- ---------- ----------- ----------
Operating (loss) profit (5,226) (6.1%) 3,912 4.2%
Interest income, net 307 0.4% 495 0.6%
---------- ---------- ----------- ----------
(Loss) earnings before
income taxes (4,919) (5.7%) 4,407 4.8%
(Benefit) provision for
income taxes (1,834) (2.1%) 1,680 1.8%
---------- ---------- ----------- ----------
Net (loss) income $ (3,085) (3.6%) $ 2,727 3.0%
========== ========== =========== ==========
Basic net (loss) income
per share $ (0.10) $ 0.09
========== ===========
Diluted net (loss)
income per share $ (0.10) $ 0.09
========== ===========
Weighted average shares
used in computation of
(loss) earnings per
share:
Basic 29,496,039 29,072,536
Diluted 29,496,039 29,378,589
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(Unaudited)
Six Months Ended
-------------------------------------------------
August 1, August 2,
2009 % of Sales 2008 % of Sales
---------- ---------- ----------- ----------
Net sales $ 161,977 100.0% $ 170,960 100.0%
Cost of goods sold 115,434 71.3% 116,297 68.0%
---------- ---------- ----------- ----------
Gross profit 46,543 28.7% 54,663 32.0%
Selling, general and
administrative expenses 55,208 34.0% 49,125 28.7%
---------- ---------- ----------- ----------
Operating (loss) profit (8,665) (5.3%) 5,538 3.3%
Interest income, net 664 0.4% 1,084 0.6%
---------- ---------- ----------- ----------
(Loss) earnings before
income taxes (8,001) (4.9%) 6,622 3.9%
(Benefit) provision for
income taxes (3,257) (2.0%) 2,533 1.5%
---------- ---------- ----------- ----------
Net (loss) income $ (4,744) (2.9%) $ 4,089 2.4%
========== ========== =========== ==========
Basic net (loss) income
per share $ (0.16) $ 0.14
========== ===========
Diluted net (loss)
income per share $ (0.16) $ 0.14
========== ===========
Weighted average shares
used in computation of
(loss) earnings per
share:
Basic 29,252,545 29,042,861
Diluted 29,252,545 29,374,015
ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
August 1, January 31, August 2,
2009 2009 2008
----------- ----------- -----------
(Unaudited) (Unaudited)
Assets
Current assets
Cash and cash equivalents $ 21,304 $ 33,057 $ 8,075
Marketable securities 60,748 45,525 58,516
Receivables 7,486 4,555 8,276
Income tax receivable 1,399 - -
Inventory 69,569 51,974 72,080
Prepaid expenses and other 6,381 5,614 5,655
Deferred tax assets 4,048 2,588 3,267
----------- ----------- -----------
Total current assets 170,935 143,313 155,869
Leasehold improvements and equipment,
net 74,367 73,932 75,994
Goodwill and other intangibles 13,211 13,236 13,154
Marketable securities - long-term 799 1,767 1,847
Deferred tax assets 2,291 1,101 1,655
----------- ----------- -----------
Total long-term assets 90,668 90,036 92,650
Total assets $ 261,603 $ 233,349 $ 248,519
=========== =========== ===========
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable $ 43,352 $ 15,909 $ 44,594
Book overdraft - - 2,201
Accrued payroll and payroll taxes 3,540 4,739 3,495
Income taxes payable - 238 2,730
Current portion of deferred rent and
tenant allowances 3,227 2,735 2,631
Other accrued liabilities 8,642 7,600 8,673
----------- ----------- -----------
Total current liabilities 58,761 31,221 64,324
Long-term deferred rent and tenant
allowances, less current portion 27,192 24,177 22,657
----------- ----------- -----------
Total liabilities 85,953 55,398 86,981
----------- ----------- -----------
Commitments and contingencies
Shareholders' equity
Preferred stock, no par value,
20,000,000 shares authorized; none
issued and outstanding - - -
Common stock, no par value,
50,000,000 shares authorized;
30,155,034 shares issued and
outstanding at August 1, 2009,
29,533,067 shares issued and
outstanding at January 31, 2009 and
29,399,608 shares issued and
outstanding at August 2, 2008 78,259 75,789 72,544
Accumulated other comprehensive income 90 117 64
Retained earnings 97,301 102,045 88,930
----------- ----------- -----------
Total shareholders' equity 175,650 177,951 161,538
----------- ----------- -----------
Total liabilities and shareholders'
equity $ 261,603 $ 233,349 $ 248,519
=========== =========== ===========
SOURCE: Zumiez
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August 20th, 2009 at 10:14 pm
Mabey they should open more stores?
August 22nd, 2009 at 2:31 pm
billy billy billy….no, mabey they shouldn't open up more strores……whats the difference between Pac Sun
and Zumies? there all non core big box retailers……leave the skate world to the local core stores……more zumies kreep in and it pushes the smaller core shops out…….booo to the corporate store