Zumiez Inc. Announces Fiscal 2022 First Quarter Results
03 June 2022 - 6:05AM
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 30, 2022.
Net sales for the first quarter ended April 30, 2022 (13 weeks)
decreased 20.9% to $220.7 million from $279.1 million in the first
quarter ended May 1, 2021 (13 weeks). Compared to the pre-pandemic
first quarter ended May 4, 2019 (13 weeks), first quarter 2022 net
sales increased 3.6%. Net loss for the first quarter of fiscal 2022
was $(0.4) million, or $(0.02) per diluted share, compared to net
income of $26.4 million, or $1.03 per diluted share, in the first
quarter of the prior fiscal year. Net income for the first quarter
of 2019 was $0.8 million, or $0.03 per diluted share.
At April 30, 2022, the Company had cash and current marketable
securities of $173.0 million compared to cash and current
marketable securities of $400.4 million at May 1, 2021. The
decrease was driven by share repurchases and capital expenditures
partially offset by cash generated through operations. The Company
repurchased 1.9 million shares in the first quarter of 2022 at an
average cost of $43.51 per share and a total cost of $83.3 million
which fully completed the existing authorized program. The Company
currently has no open repurchase authorizations.
Rick Brooks, Chief Executive Officer of Zumiez
Inc., stated, “Our first quarter top line performance came in on
the high side of our expectations for the quarter as we experienced
another period of full price selling across each of our geographic
regions. As forecasted, the first quarter was meaningfully impacted
by the anniversary of record U.S. stimulus in early 2021 as well as
the impacts of inflation and overall competition for the
discretionary dollar. On the expense side we experienced some
headwinds in the first quarter of this year around labor, shipping
and logistics costs as well as a shift in timing of certain
marketing and training investments that resulted in us missing our
EPS guidance. As we look to the balance of the year, we are
cognizant that the current macroeconomic environment is likely to
deteriorate further and near-term year-over-year comparisons remain
challenging. However, we have a strong balance sheet and remain
confident in our consumer centric growth strategy and flexible
operating model that has proven resilient to a variety of
challenges over time. Despite the economic back drop, we believe
the Company remains well positioned to capture share in each of our
global markets while we continue advancing our strategic
initiatives and generating value for our shareholders.”
May 2022 SalesNet sales for the four-week period ended May 28,
2022 decreased 20.9% compared to the four-week period ended May 29,
2021 and increased 3.3% compared to the four-week period ended June
1, 2019.
Fiscal 2022 Second Quarter OutlookThe Company is introducing
guidance for the three months ending July 30, 2022. Net sales are
projected to be in the range of $232 to $239 million. Consolidated
operating margins are expected to between 5.0% and 6.5% resulting
in earnings per diluted share of approximately $0.45 to $0.55. The
Company currently intends to open approximately 34 new stores in
fiscal 2022, including up to 15 stores in North America, 14 stores
in Europe and 5 stores in Australia.
Conference call Information A conference call will be held today
to discuss first quarter fiscal 2022 results and will be webcast at
5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial
(844) 309-0606 (domestic) or (574) 990-9934 (international)
followed by the conference identification code of 9374922.
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 28, 2022, we operated 741 stores, including 601 in the
United States, 52 in Canada, 69 in Europe and 19 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 January 29, 2022 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.
Company Contact:Darin WhiteVice president of
Finance & Investor RelationsZumiez Inc.(425) 551-1500, ext.
1337
Investor Contact:ICRBrendon Frey (203)
682-8200
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share
amounts) (Unaudited)
|
|
Three Months Ended |
|
|
April 30, 2022 |
|
% of Sales |
|
|
May 1, 2021 |
|
% of Sales |
Net sales |
|
$ |
220,686 |
|
|
100.0 |
% |
|
$ |
279,069 |
|
100.0 |
% |
Cost of goods sold |
|
|
148,312 |
|
|
67.2 |
% |
|
|
175,900 |
|
63.0 |
% |
Gross profit |
|
|
72,374 |
|
|
32.8 |
% |
|
|
103,169 |
|
37.0 |
% |
Selling, general and administrative expenses |
|
|
71,877 |
|
|
32.6 |
% |
|
|
68,889 |
|
24.7 |
% |
Operating profit |
|
|
497 |
|
|
0.2 |
% |
|
|
34,280 |
|
12.3 |
% |
Interest income, net |
|
|
492 |
|
|
0.2 |
% |
|
|
975 |
|
0.3 |
% |
Other income, net |
|
|
172 |
|
|
0.1 |
% |
|
|
254 |
|
0.1 |
% |
Earnings before income taxes |
|
|
1,161 |
|
|
0.5 |
% |
|
|
35,509 |
|
12.7 |
% |
Provision for income taxes |
|
|
1,558 |
|
|
0.7 |
% |
|
|
9,124 |
|
3.2 |
% |
Net (loss) income |
|
$ |
(397 |
) |
|
(0.2 |
%) |
|
$ |
26,385 |
|
9.5 |
% |
Basic (loss) earnings per share |
|
$ |
(0.02 |
) |
|
|
|
$ |
1.05 |
|
|
Diluted (loss) earnings per share |
|
$ |
(0.02 |
) |
|
|
|
$ |
1.03 |
|
|
Weighted average shares used in computation of earnings per
share: |
|
|
|
|
|
|
|
|
Basic |
|
|
19,533 |
|
|
|
|
|
25,167 |
|
|
Diluted |
|
|
19,533 |
|
|
|
|
|
25,676 |
|
|
|
|
|
|
|
|
|
|
|
|
|
ZUMIEZ INC. CONDENSED
CONSOLIDATED BALANCE SHEETS(In
thousands)
|
|
April 30, 2022 |
|
January 29, 2022 |
|
May 1, 2021 |
|
|
|
(Unaudited) |
|
|
|
(Unaudited) |
|
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
62,501 |
|
|
$ |
117,223 |
|
|
$ |
81,503 |
|
Marketable securities |
|
|
110,452 |
|
|
|
177,260 |
|
|
|
318,888 |
|
Receivables |
|
|
23,609 |
|
|
|
14,427 |
|
|
|
20,481 |
|
Inventories |
|
|
141,883 |
|
|
|
128,728 |
|
|
|
136,498 |
|
Prepaid expenses and other current assets |
|
|
10,348 |
|
|
|
10,011 |
|
|
|
9,481 |
|
Total current assets |
|
|
348,793 |
|
|
|
447,649 |
|
|
|
566,851 |
|
Fixed assets, net |
|
|
90,313 |
|
|
|
91,451 |
|
|
|
96,004 |
|
Operating lease right-of-use assets |
|
|
240,052 |
|
|
|
230,187 |
|
|
|
259,790 |
|
Goodwill |
|
|
55,325 |
|
|
|
57,560 |
|
|
|
61,307 |
|
Intangible assets, net |
|
|
14,091 |
|
|
|
14,698 |
|
|
|
15,996 |
|
Deferred tax assets, net |
|
|
7,910 |
|
|
|
8,659 |
|
|
|
6,168 |
|
Other long-term assets |
|
|
11,630 |
|
|
|
11,808 |
|
|
|
11,688 |
|
Total long-term assets |
|
|
419,321 |
|
|
|
414,363 |
|
|
|
450,953 |
|
Total assets |
|
$ |
768,114 |
|
|
$ |
862,012 |
|
|
$ |
1,017,804 |
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Trade accounts payable |
|
$ |
65,108 |
|
|
$ |
55,638 |
|
|
$ |
75,610 |
|
Accrued payroll and payroll taxes |
|
|
19,334 |
|
|
|
31,209 |
|
|
|
24,784 |
|
Operating lease liabilities |
|
|
69,327 |
|
|
|
63,577 |
|
|
|
67,433 |
|
Other liabilities |
|
|
24,528 |
|
|
|
34,015 |
|
|
|
25,419 |
|
Total current liabilities |
|
|
178,297 |
|
|
|
184,439 |
|
|
|
193,246 |
|
Long-term operating lease liabilities |
|
|
207,953 |
|
|
|
204,309 |
|
|
|
238,553 |
|
Other long-term liabilities |
|
|
4,967 |
|
|
|
4,946 |
|
|
|
4,224 |
|
Total long-term liabilities |
|
|
212,920 |
|
|
|
209,255 |
|
|
|
242,777 |
|
Total liabilities |
|
|
391,217 |
|
|
|
393,694 |
|
|
|
436,023 |
|
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
|
|
|
Preferred stock, no par value, 20,000 shares authorized; none
issued and outstanding |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Common stock, no par value, 50,000 shares authorized; 19,459
shares issued and outstanding at April 30, 2022, 21,215 shares
issued and outstanding at January 29, 2022, and 25,780 shares
issued and outstanding at May 1, 2021 |
|
|
182,899 |
|
|
|
180,824 |
|
|
|
174,921 |
|
Accumulated other comprehensive (loss) income |
|
|
(23,274 |
) |
|
|
(13,463 |
) |
|
|
446 |
|
Retained earnings |
|
|
217,272 |
|
|
|
300,957 |
|
|
|
406,414 |
|
Total shareholders’ equity |
|
|
376,897 |
|
|
|
468,318 |
|
|
|
581,781 |
|
Total liabilities and shareholders’ equity |
|
$ |
768,114 |
|
|
$ |
862,012 |
|
|
$ |
1,017,804 |
|
|
|
|
|
|
|
|
|
|
|
|
ZUMIEZ INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(In
thousands)(Unaudited)
|
|
Three Months Ended |
|
|
April 30, 2022 |
|
May 1, 2021 |
Cash flows from operating activities: |
|
|
|
|
Net (loss) income |
|
$ |
(397 |
) |
|
$ |
26,385 |
|
Adjustments to reconcile net (loss) income to net cash (used in)
provided by operating activities: |
|
|
|
|
Depreciation, amortization and accretion |
|
|
5,416 |
|
|
|
5,889 |
|
Noncash lease expense |
|
|
16,495 |
|
|
|
15,968 |
|
Deferred taxes |
|
|
1,838 |
|
|
|
4,063 |
|
Stock-based compensation expense |
|
|
1,700 |
|
|
|
1,740 |
|
Impairment of long-lived assets |
|
|
- |
|
|
|
2,079 |
|
Other |
|
|
(72 |
) |
|
|
(246 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
Receivables |
|
|
(4,172 |
) |
|
|
(2,019 |
) |
Inventories |
|
|
(14,580 |
) |
|
|
(1,813 |
) |
Prepaid expenses and other assets |
|
|
(280 |
) |
|
|
(2,098 |
) |
Trade accounts payable |
|
|
9,672 |
|
|
|
5,796 |
|
Accrued payroll and payroll taxes |
|
|
(11,696 |
) |
|
|
(3,141 |
) |
Income taxes payable |
|
|
(4,987 |
) |
|
|
(3,690 |
) |
Operating lease liabilities |
|
|
(18,403 |
) |
|
|
(18,776 |
) |
Other liabilities |
|
|
(5,011 |
) |
|
|
(3,212 |
) |
Net cash (used in) provided by operating
activities |
|
|
(24,477 |
) |
|
|
26,925 |
|
Cash flows from investing activities: |
|
|
|
|
Additions to fixed assets |
|
|
(3,562 |
) |
|
|
(2,825 |
) |
Purchases of marketable securities and other investments |
|
|
(1,914 |
) |
|
|
(60,692 |
) |
Sales and maturities of marketable securities and other
investments |
|
|
64,041 |
|
|
|
42,249 |
|
Net cash provided by (used in) investing
activities |
|
|
58,565 |
|
|
|
(21,268 |
) |
Cash flows from financing activities: |
|
|
|
|
Proceeds from issuance and exercise of stock-based awards |
|
|
782 |
|
|
|
2,039 |
|
Payments for tax withholdings on equity awards |
|
|
(407 |
) |
|
|
(486 |
) |
Common stock repurchased |
|
|
(87,860 |
) |
|
|
— |
|
Net cash (used in) provided by financing
activities |
|
|
(87,485 |
) |
|
|
1,553 |
|
Effect of exchange rate changes on cash, cash equivalents,
and restricted cash |
|
|
(1,497 |
) |
|
|
766 |
|
Net (decrease) increase in cash, cash equivalents, and
restricted cash |
|
|
(54,894 |
) |
|
|
7,976 |
|
Cash, cash equivalents, and restricted cash, beginning of
period |
|
|
124,052 |
|
|
|
80,690 |
|
Cash, cash equivalents, and restricted cash, end of
period |
|
$ |
69,158 |
|
|
$ |
88,666 |
|
Supplemental disclosure on cash flow
information: |
|
|
|
|
Cash paid during the period for income taxes |
|
$ |
4,657 |
|
|
$ |
8,738 |
|
Accrual for purchases of fixed assets |
|
|
2,530 |
|
|
|
553 |
|
|
|
|
|
|
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