Zumiez Inc. (NASDAQ: ZUMZ) a leading specialty retailer of apparel,
footwear, equipment and accessories for young men and women, today
reported results for the fourth quarter and fiscal year ended
January 28, 2023.
Net sales for the fourth quarter ended January 28, 2023 (13
weeks) decreased 19.2% to $280.1 million from $346.7 million in the
fourth quarter ended January 29, 2022 (13 weeks). Net income in the
fourth quarter of fiscal 2022 was $11.4 million, or $0.59 per
diluted share, compared to net income of $38.2 million, or $1.70
per diluted share, in the fourth quarter of the prior fiscal
year.
Total net sales for the twelve months (52 weeks) ended January
28, 2023 decreased 19.0% to $958.4 million from $1,183.9 million
reported for the twelve months (52 weeks) ended January 29, 2022.
Net income for fiscal 2022 was $21.0 million, or $1.08 per diluted
share, compared to net income for fiscal 2021 of $119.3 million, or
$4.85 per diluted share.
At January 28, 2023, the Company had cash and current marketable
securities of $173.5 million compared to cash and current
marketable securities of $294.5 million at January 29, 2022. The
decrease was driven by share repurchases of $87.9 million and
capital expenditures of $25.6 million over this time period.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, “We
concluded a challenging fiscal 2022 with fourth quarter results
that were ahead of our guidance, but below year ago levels. While
the operating environment has been difficult and our recent
financial performance disappointing, our commitment to serving
consumers with world class service and highly differentiated,
sought-after merchandise, is as strong as ever and has the business
positioned to recover quickly when the macroeconomic conditions
improve. I am confident that the channel-less retail model and
strong corporate culture we have built and evolved over Zumiez’s
45-year history and brought to Canada, Europe and Australia will
continue to separate our banners from the competition and drive
profitable growth for our shareholders over the long-term.”
Fiscal First Quarter-to-Date Sales Total first quarter-to-date
sales for the 35 days ended March 4, 2023 decreased 15.5%, compared
with the same 35-day time period in the prior year ended March 5,
2022. Total comparable sales for the 35-day period ending March 4,
2023 decreased 16.6% from the comparable period in the prior
year.
OutlookFiscal 2023 First Quarter OutlookThe Company is
introducing guidance for the three months ending April 29, 2023.
Net sales are projected to be in the range of $178 to $184 million.
Earnings per share are expected to be between a loss of $0.85 and a
loss of $0.95.
The Company currently intends to open approximately 23 new
stores in fiscal 2023, including up to 8 stores in North America,
10 stores in Europe and 5 stores in Australia.
Conference call Information To access the conference call,
please pre-register using this link (registration link).
Registrants will receive confirmation with dial-in details. The
conference call will also be available to interested parties
through a live webcast at https://ir.zumiez.com. To avoid delays,
we encourage participants to dial into the conference call fifteen
minutes ahead of the scheduled start time. A replay of the webcast
will also be available for a limited time
at https://ir.zumiez.com.
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 February 25, 2023, we operated 756 stores, including 607 in
the United States, 50 in Canada, 78 in Europe and 21 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.
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
|
|
|
Three Months Ended |
|
|
|
January 28, |
|
% of |
|
January 29, |
|
% of |
|
|
|
2023 |
|
|
Sales |
|
|
2022 |
|
|
Sales |
|
|
|
(Unaudited) |
|
|
|
(Unaudited) |
|
|
Net sales |
|
$ |
280,110 |
|
|
100.0 |
% |
|
|
346,677 |
|
|
100.0 |
% |
Cost of goods sold |
|
|
184,841 |
|
|
66.0 |
% |
|
|
212,744 |
|
|
61.4 |
% |
Gross profit |
|
|
95,269 |
|
|
34.0 |
% |
|
|
133,933 |
|
|
38.6 |
% |
Selling, general and administrative expenses |
|
|
80,059 |
|
|
28.6 |
% |
|
|
82,198 |
|
|
23.7 |
% |
Operating profit |
|
|
15,210 |
|
|
5.4 |
% |
|
|
51,735 |
|
|
14.9 |
% |
Interest income, net |
|
|
645 |
|
|
0.2 |
% |
|
|
759 |
|
|
0.2 |
% |
Other income (expense), net |
|
|
293 |
|
|
0.1 |
% |
|
|
(1,462 |
) |
|
-0.4 |
% |
Earnings before income taxes |
|
|
16,148 |
|
|
5.7 |
% |
|
|
51,032 |
|
|
14.7 |
% |
Provision for income taxes |
|
|
4,716 |
|
|
1.7 |
% |
|
|
12,828 |
|
|
3.7 |
% |
Net income |
|
$ |
11,432 |
|
|
4.0 |
% |
|
$ |
38,204 |
|
|
11.0 |
% |
Basic earnings per share |
|
$ |
0.60 |
|
|
|
|
$ |
1.73 |
|
|
|
Diluted earnings per share |
|
$ |
0.59 |
|
|
|
|
$ |
1.70 |
|
|
|
Weighted average shares used in computation of earnings per
share: |
|
|
|
|
|
|
|
Basic |
|
|
19,114 |
|
|
|
|
|
22,056 |
|
|
|
Diluted |
|
|
19,255 |
|
|
|
|
|
22,451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended |
|
|
|
January 28, |
|
% of |
|
January 29, |
|
% of |
|
|
|
2023 |
|
|
Sales |
|
|
2022 |
|
|
Sales |
|
|
|
(Unaudited) |
|
|
|
|
|
|
Net sales |
|
$ |
958,380 |
|
|
100.0 |
% |
|
$ |
1,183,867 |
|
|
100.0 |
% |
Cost of goods sold |
|
|
633,702 |
|
|
66.1 |
% |
|
|
727,137 |
|
|
61.4 |
% |
Gross profit |
|
|
324,678 |
|
|
33.9 |
% |
|
|
456,730 |
|
|
38.6 |
% |
Selling, general and administrative expenses |
|
|
293,578 |
|
|
30.7 |
% |
|
|
298,920 |
|
|
25.3 |
% |
Operating profit |
|
|
31,100 |
|
|
3.2 |
% |
|
|
157,810 |
|
|
13.3 |
% |
Interest income, net |
|
|
1,924 |
|
|
0.3 |
% |
|
|
3,592 |
|
|
0.4 |
% |
Other expense, net |
|
|
(557 |
) |
|
-0.1 |
% |
|
|
(891 |
) |
|
-0.1 |
% |
Earnings before income taxes |
|
|
32,467 |
|
|
3.4 |
% |
|
|
160,511 |
|
|
13.6 |
% |
Provision for income taxes |
|
|
11,433 |
|
|
1.2 |
% |
|
|
41,222 |
|
|
3.5 |
% |
Net income |
|
$ |
21,034 |
|
|
2.2 |
% |
|
$ |
119,289 |
|
|
10.1 |
% |
Basic earnings per share |
|
$ |
1.10 |
|
|
|
|
$ |
4.93 |
|
|
|
Diluted earnings per share |
|
$ |
1.08 |
|
|
|
|
$ |
4.85 |
|
|
|
Weighted average shares used in computation of earnings per
share: |
|
|
|
|
|
|
|
Basic |
|
|
19,208 |
|
|
|
|
|
24,187 |
|
|
|
Diluted |
|
|
19,428 |
|
|
|
|
|
24,593 |
|
|
|
ZUMIEZ INC. CONDENSED
CONSOLIDATED BALANCE SHEETS(In
thousands)
|
|
January 28, 2023 |
|
January 29, 2022 |
|
|
(Unaudited) |
|
|
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
81,503 |
|
|
$ |
117,223 |
|
Marketable securities |
|
|
91,986 |
|
|
|
177,260 |
|
Receivables |
|
|
20,613 |
|
|
|
14,427 |
|
Inventories |
|
|
134,824 |
|
|
|
128,728 |
|
Prepaid expenses and other current assets |
|
|
11,252 |
|
|
|
10,011 |
|
Total current assets |
|
|
340,178 |
|
|
|
447,649 |
|
Fixed assets, net |
|
|
93,746 |
|
|
|
91,451 |
|
Operating lease right-of-use assets |
|
|
222,240 |
|
|
|
230,187 |
|
Goodwill |
|
|
56,566 |
|
|
|
57,560 |
|
Intangible assets, net |
|
|
14,443 |
|
|
|
14,698 |
|
Deferred tax assets, net |
|
|
8,205 |
|
|
|
8,659 |
|
Other long-term assets |
|
|
12,525 |
|
|
|
11,808 |
|
Total long-term assets |
|
|
407,725 |
|
|
|
414,363 |
|
Total assets |
|
$ |
747,903 |
|
|
$ |
862,012 |
|
|
|
|
|
|
Liabilities and Shareholders’ Equity |
|
|
|
|
Current liabilities |
|
|
|
|
Trade accounts payable |
|
$ |
40,379 |
|
|
$ |
55,638 |
|
Accrued payroll and payroll taxes |
|
|
16,321 |
|
|
|
31,209 |
|
Operating lease liabilities |
|
|
65,460 |
|
|
|
63,577 |
|
Other liabilities |
|
|
23,649 |
|
|
|
34,015 |
|
Total current liabilities |
|
|
145,809 |
|
|
|
184,439 |
|
Long-term operating lease liabilities |
|
|
188,835 |
|
|
|
204,309 |
|
Other long-term liabilities |
|
|
5,931 |
|
|
|
4,946 |
|
Total long-term liabilities |
|
|
194,766 |
|
|
|
209,255 |
|
Total liabilities |
|
|
340,575 |
|
|
|
393,694 |
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
Preferred stock, no par value, 20,000 shares authorized; none
issued and outstanding |
|
|
— |
|
|
|
— |
|
Common stock, no par value, 50,000 shares authorized; 19,489
shares issued and outstanding at January 28, 2023 and 21,215 shares
issued and outstanding at January 29, 2022 |
|
|
188,418 |
|
|
|
180,824 |
|
Accumulated other comprehensive loss |
|
|
(19,793 |
) |
|
|
(13,463 |
) |
Retained earnings |
|
|
238,703 |
|
|
|
300,957 |
|
Total shareholders’ equity |
|
|
407,328 |
|
|
|
468,318 |
|
Total liabilities and shareholders’ equity |
|
$ |
747,903 |
|
|
$ |
862,012 |
|
|
|
|
|
|
ZUMIEZ INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(In
thousands)(Unaudited)
|
|
Fiscal Year Ended |
|
|
January 28, 2023 |
|
January 29, 2022 |
|
|
(Unaudited) |
|
|
Cash flows from operating activities: |
|
|
|
|
Net income |
|
$ |
21,034 |
|
|
$ |
119,289 |
|
Adjustments to reconcile net income to net cash (used in) provided
by operating activities: |
|
|
|
|
Depreciation, amortization and accretion |
|
|
21,626 |
|
|
|
22,930 |
|
Noncash lease expense |
|
|
67,394 |
|
|
|
64,466 |
|
Deferred taxes |
|
|
2,485 |
|
|
|
2,374 |
|
Stock-based compensation expense |
|
|
6,991 |
|
|
|
6,816 |
|
Impairment of long-lived assets |
|
|
2,081 |
|
|
|
2,229 |
|
Other |
|
|
1,176 |
|
|
|
2,728 |
|
Changes in operating assets and liabilities: |
|
|
|
|
Receivables |
|
|
(1,716 |
) |
|
|
2,884 |
|
Inventories |
|
|
(5,279 |
) |
|
|
2,587 |
|
Prepaid expenses and other assets |
|
|
(1,082 |
) |
|
|
(2,824 |
) |
Trade accounts payable |
|
|
(15,484 |
) |
|
|
(14,060 |
) |
Accrued payroll and payroll taxes |
|
|
(14,895 |
) |
|
|
3,649 |
|
Income taxes payable |
|
|
(2,320 |
) |
|
|
(5,101 |
) |
Operating lease liabilities |
|
|
(76,605 |
) |
|
|
(77,657 |
) |
Other liabilities |
|
|
(5,785 |
) |
|
|
4,640 |
|
Net cash (used in) provided by operating
activities |
|
|
(379 |
) |
|
|
134,950 |
|
Cash flows from investing activities: |
|
|
|
|
Additions to fixed assets |
|
|
(25,627 |
) |
|
|
(15,749 |
) |
Purchases of marketable securities and other investments |
|
|
(1,914 |
) |
|
|
(160,328 |
) |
Sales and maturities of marketable securities and other
investments |
|
|
81,750 |
|
|
|
277,720 |
|
Net cash provided by investing activities |
|
|
54,209 |
|
|
|
101,643 |
|
Cash flows from financing activities: |
|
|
|
|
Proceeds from revolving credit facilities |
|
|
3,979 |
|
|
|
— |
|
Payments on revolving credit facilities |
|
|
(3,979 |
) |
|
|
— |
|
Proceeds from issuance and exercise of stock-based awards |
|
|
1,111 |
|
|
|
3,001 |
|
Payments for tax withholdings on equity awards |
|
|
(508 |
) |
|
|
(621 |
) |
Common stock repurchased |
|
|
(87,860 |
) |
|
|
(193,789 |
) |
Net cash used in financing activities |
|
|
(87,257 |
) |
|
|
(191,409 |
) |
Effect of exchange rate changes on cash, cash equivalents,
and restricted cash |
|
|
(2,172 |
) |
|
|
(1,822 |
) |
Net (decrease) increase in cash, cash equivalents, and
restricted cash |
|
|
(35,599 |
) |
|
|
43,362 |
|
Cash, cash equivalents, and restricted cash, beginning of
period |
|
|
124,052 |
|
|
|
80,690 |
|
Cash, cash equivalents, and restricted cash, end of
period |
|
$ |
88,453 |
|
|
$ |
124,052 |
|
Supplemental disclosure on cash flow
information: |
|
|
|
|
Cash paid during the period for income taxes |
|
$ |
11,309 |
|
|
$ |
42,767 |
|
Accrual for repurchase of common stock |
|
|
- |
|
|
|
4,572 |
|
Accrual for purchases of fixed assets |
|
|
1,433 |
|
|
|
984 |
|
Company Contact:Darin WhiteDirector of Finance
& Investor RelationsZumiez Inc.(425) 551-1500, ext. 1337
Investor Contact:ICRBrendon Frey (203)
682-8200
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