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09/07/17
Zumiez Inc. Announces Fiscal 2017 Second Quarter Results

Second Quarter 2017 Sales Increased 7.8% to $192.2 Million

Second Quarter 2017 Diluted Loss Per Share Improved to $(0.02)

August 2017 Comparable Sales Increased 7.4%

LYNNWOOD, Wash., Sept. 07, 2017 (GLOBE NEWSWIRE) -- Zumiez Inc. (NASDAQ:ZUMZ) today reported results for the second quarter ended July 29, 2017.

Total net sales for the second quarter ended July 29, 2017 (13 weeks) increased 7.8% to $192.2 million from $178.3 million in the quarter ended July 30, 2016 (13 weeks). Comparable sales for the thirteen weeks ended July 29, 2017 increased 4.7% compared to a comparable sales decrease of 4.9% for the thirteen weeks ended July 30, 2016. Net loss for the second quarter of fiscal 2017 was $0.6 million, or $0.02 per diluted share, compared to a net loss of $0.8 million, or $0.03 per diluted share in the second quarter of the prior fiscal year. 

Total net sales for the six months (26 weeks) ended July 29, 2017 increased 6.3% to $373.4 million from $351.2 million reported for the six months (26 weeks) ended July 30, 2016. Comparable sales increased 3.3% for the twenty-six weeks ended July 29, 2017 compared to a comparable sales decrease of 6.2% for the twenty-six weeks ended July 30, 2016. Net loss for the first six months of fiscal 2017 was $5.1 million, or $0.21 per diluted share, compared to a net loss for the first six months of the prior fiscal year of $3.0 million, or $0.12 per diluted share.

At July 29, 2017, the Company had cash and current marketable securities of $70.7 million compared to cash and current marketable securities of $52.3 million at July 30, 2016. The increase in cash and current marketable securities was driven by cash generated through operations partially offset by capital expenditures and cash used in the acquisition of Fast Times.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "Our business outperformed our expectations during the second quarter highlighted by a 4.7% comparable sales increase.  I am extremely pleased with how well our teams continue to execute in the current environment. Our intense focus on serving our consumer with differentiated assortments and great service is fueling market share gains and strengthening our leadership position in the industry. We will continue to invest in our people and omni-channel capabilities while tightly controlling expenses as we look to consistently drive profitable growth and increased shareholder value over the long-term.”

August 2017 Sales  
Total net sales for the four-week period ended August 26, 2017 increased 10.1% to $98.6 million, compared to $89.5 million for the four-week period ended August 27, 2016. The Company's comparable sales increased 7.4% for the four-week period ended August 26, 2017 compared to a comparable sales decrease of 1.1% for the four-week period ended August 27, 2016.

Fiscal 2017 Third Quarter Outlook  
The Company is introducing guidance for the three months ending October 28, 2017. Net sales are projected to be in the range of $236 to $241 million resulting in net income per diluted share of approximately $0.43 to $0.48. This guidance is based upon anticipated comparable sales growth between 4% and 6% for the third quarter of fiscal 2017. The Company currently intends to open approximately 18 new stores in fiscal 2017, including up to 3 stores in Canada and 4 stores in Europe and 2 stores in Australia.

A conference call will be held today to discuss second quarter fiscal 2017 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (574) 990-9934 followed by the conference identification code of 78719001.

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 August 26, 2017 we operated 693 stores, including 606 in the United States, 51 in Canada, and 30 in Europe and 6 in Australia. We operate under the names Zumiez, Blue Tomato and Fast Times. Additionally, we operate ecommerce web sites at www.zumiez.com, www.blue-tomato.com and https://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 quarterly report on Form 10-Q for the quarter ended April 29, 2017 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
(In thousands, except per share amounts)
(Unaudited)
 
  Three Months Ended
                   
   July 29, 2017
   % of Sales    July 30, 2016
   % of Sales
Net sales $ 192,245     100.0 %   $ 178,272     100.0 %
Cost of goods sold 132,449     68.9 %     123,428     69.2 %
Gross profit 59,796     31.1 %   54,844     30.8 %
               
Selling, general and administrative expenses 60,558     31.5 %   55,980     31.5 %
Operating loss (762 )   (0.4 %)   (1,136 )   (0.7 %)
               
Interest income, net 92     0.0 %   28     0.0 %
Other expense, net (23 )   0.0 %   (256 )   (0.1 %)
Loss before income taxes (693 )   (0.4 %)   (1,364 )   (0.8 %)
               
Benefit from income taxes (85 )   (0.1 %)   (526 )   (0.3 %)
                   
Net loss $ (608 )   (0.3 %)   $ (838 )   (0.5 %)
               
Basic loss per share $ (0.02 )       $ (0.03 )    
               
Diluted loss per share $ (0.02 )       $ (0.03 )    
                   
Weighted average shares used in computation of loss per share:              
Basic 24,689         24,712      
               
Diluted 24,689         24,712      
                   
 
 
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
 
  Six Months Ended
                   
   July 29, 2017
   % of Sales    July 30, 2016
   % of Sales
Net sales $ 373,399     100.0 %   $ 351,243     100.0 %
Cost of goods sold 261,555     70.0 %   246,440     70.2 %
Gross profit 111,844     30.0 %   104,803     29.8 %
               
Selling, general and administrative expenses 118,841     31.9 %   109,879     31.2 %
Operating loss (6,997 )   (1.9 %)   (5,076 )   (1.4 %)
               
Interest income, net 174     0.0 %   59     0.0 %
Other (expense) income, net (472 )   (0.1 %)   242     0.1 %
Loss before income taxes (7,295 )   (2.0 %)   (4,775 )   (1.3 %)
               
Benefit from income taxes (2,239 )   (0.6 %)   (1,800 )   (0.5 %)
                   
Net Loss $ (5,056 )   (1.4 %)   $ (2,975 )   (0.8 %)
               
Basic loss per share $ (0.21 )       $ (0.12 )    
               
Diluted loss per share $ (0.21 )       $ (0.12 )    
                   
Weighted average shares used in computation of loss per share:              
Basic 24,635         24,957      
               
Diluted 24,635         24,957      
                   

 

ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
                       
  July 29,   January 28,   July 30,
2017 2017   2016
Assets (Unaudited)        (Unaudited)
Current assets            
Cash and cash equivalents $ 17,291     $ 20,247     $ 19,600  
Marketable securities 53,433     58,579     32,740  
Receivables 16,334     12,538     14,576  
Inventories 141,782     106,924     131,823  
Prepaid expenses and other current assets 15,378     13,075     13,990  
Total current assets 244,218     211,363     212,729  
           
Fixed assets, net 131,934     129,651     136,505  
Goodwill 60,057     56,001     55,082  
Intangible assets, net 15,903     14,610       12,005  
Deferred tax assets, net 9,733     7,041       8,332  
Other long-term assets 7,022       8,017     7,908  
Total long-term assets 224,649     215,320     219,832  
           
Total assets $ 468,867     $ 426,683     $ 432,561  
           
Liabilities and Shareholders’ Equity          
Current liabilities          
Trade accounts payable $ 60,652     $ 25,529     $ 60,044  
Accrued payroll and payroll taxes 15,684     14,914       12,754  
Income taxes payable 68     1,866     507  
Deferred rent and tenant allowances 8,393     8,344     8,384  
Other liabilities 23,657     22,944     22,089  
Total current liabilities 108,454     73,597     103,778  
           
Long-term deferred rent and tenant allowances 40,795     41,066     43,721  
Other long-term liabilities  5,113     4,969     4,815  
Total long-term liabilities 45,908     46,035     48,536  
                 
Total liabilities 154,362     119,632     152,314  
           
Shareholders’ equity          
Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding —     —     —  
Common stock, no par value, 50,000 shares authorized; 25,231 shares issued and outstanding at July 29, 2017, 24,945 shares issued and outstanding at January 28, 2017, and 24,931 shares issued and outstanding at July 30, 2016 143,682     140,984     137,102  
Accumulated other comprehensive loss (6,676 )   (16,488 )   (12,802 )
Retained earnings 177,499     182,555     155,947  
Total shareholders’ equity 314,505     307,051     280,247  
           
Total liabilities and shareholders’ equity $ 468,867     $ 426,683     $ 432,561  
                 

 

ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) 
 
  Six Months Ended
  July 29, 2017     July 30, 2016
Cash flows from operating activities:      
Net loss $   (5,056 )   $   (2,975 )
Adjustments to reconcile net loss to net cash provided by operating activities:      
Depreciation, amortization and accretion     13,520         14,336  
Deferred taxes     (2,456 )       (3,713 )
Stock-based compensation expense     2,500         2,221  
Other     621         95  
Changes in operating assets and liabilities:      
Receivables     (2,092 )       (842 )
Inventories     (32,553 )       (32,766 )
Prepaid expenses and other current assets     (995 )       (2,690 )
Trade accounts payable     34,627         38,181  
Accrued payroll and payroll taxes     561         225  
Income taxes payable     (3,372 )       (4,804 )
Deferred rent and tenant allowances     (521 )       (12 )
Other liabilities     (1,016 )       (813 )
Net cash provided by operating activities     3,768         6,443  
       
Cash flows from investing activities:      
Additions to fixed assets     (12,461 )       (11,895 )
Purchases of marketable securities and other investments     (37,586 )       (28,353 )
Sales and maturities of marketable securities and other investments     42,615         28,658  
Net cash used in investing activities     (7,432 )       (11,590 )
       
Cash flows from financing activities:      
Proceeds from revolving credit facilities     1,791         -   
Payments on revolving credit facilities     (1,791 )       -   
Repurchase of common stock     -          (19,084 )
Proceeds from issuance and exercise of stock-based awards     370         518  
Payments for tax withholdings on equity awards     (172 )       (121 )
Net cash provided by (used in) financing activities     198         (18,687 )
       
Effect of exchange rate changes on cash and cash equivalents     510         271  
       
Net decrease in cash and cash equivalents     (2,956 )       (23,563 )
Cash and cash equivalents, beginning of period     20,247         43,163  
Cash and cash equivalents, end of period $   17,291     $   19,600  
       
Supplemental disclosure on cash flow information:      
Cash paid during the period for income taxes $   3,660     $   6,736  
Accrual for purchases of fixed assets     2,550         1,835  
Accrual for repurchase of common stock     -          254  
        
Company Contact:
Darin White
Director of Finance &
Investor Relations
Zumiez Inc.
(425) 551-1500, ext. 1337

Investor Contact:
ICR
Brendon Frey
(203) 682-8200

Zumiez Inc