UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM
_________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
_______________________________
(Exact name of registrant as specified in its charter)
_______________________________
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices) (Zip Code)
(
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
_______________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
On September 8, 2022, Zumiez Inc. issued a press release (the "Press Release") reporting its financial results for the second quarter ended July 30, 2022, a copy of which is attached hereto as Exhibit 99.1 and the contents of which are incorporated herein by this reference.
In accordance with General Instruction B.2. of Form 8-K, the information contained in this report and the Press Release shall not be deemed "Filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
| 99.1 | Press Release dated September 8, 2022 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Zumiez Inc. | ||
| Date: September 8, 2022 | By: | /s/ Richard M. Brooks |
| Richard M. Brooks | ||
| Chief Executive Officer | ||
EXHIBIT 99.1
Zumiez Inc. Announces Fiscal 2022 Second Quarter Results
LYNNWOOD, Wash., Sept. 08, 2022 (GLOBE NEWSWIRE) -- Zumiez Inc. (NASDAQ: ZUMZ) a leading specialty retailer of apparel, footwear, equipment and accessories for young men and women, today reported results for the second quarter ended July 30, 2022.
Net sales for the second quarter ended July 30, 2022 (13 weeks) decreased 18.1% to $220.0 million from $268.7 million in the second quarter ended July 31, 2021 (13 weeks). Compared to the second quarter ended August 3, 2019 (13 weeks), second quarter 2022 net sales decreased 3.7%. Net income in the second quarter of fiscal 2022 was $3.1 million, or $0.16 per diluted share, compared to net income of $24.0 million, or $0.94 per diluted share, in the second quarter of the prior fiscal year. Net income for the second quarter of 2019 was $9.0 million, or $0.36 per diluted share.
Total net sales for the six months (26 weeks) ended July 30, 2022 decreased 19.5% to $440.7 million from $547.7 million reported for the six months (26 weeks) ended July 31, 2021. Compared to the first six months (26 weeks) ended August 3, 2019, net sales decreased 0.2%. Net income for the first six months of 2022 was $2.7 million, or $0.14 per diluted share, compared to net income for the first six months of fiscal 2021 of $50.4 million, or $1.96 per diluted share, and compared to net income for the first six months of fiscal 2019 of $9.8 million, or $0.39 per diluted share.
At July 30, 2022, the Company had cash and current marketable securities of $166.2 million compared to cash and current marketable securities of $412.0 million at July 31, 2021. The decrease was driven by share repurchases and capital expenditures partially offset by cash generated through operations.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, “As the second quarter progressed, we experienced continued pressure on our U.S. business as macroeconomic headwinds, led by inflation weighed on consumer discretionary spending. Our full-price selling model has fueled long cycles of sustained growth and increased profitability during Zumiez’s 44 year history with outsized gains during periods of high disposable income levels such as last year’s stimulus driven demand environment. We are disappointed that our recent performance fell short of expectations and we are making adjustments to our merchandise assortments and managing expenses in order to improve near-term results. While comparisons do begin to moderate in the back half of the year, based on recent trends we believe it is prudent to adopt a more cautious view on the remainder of 2022. We are currently planning our business and inventory levels accordingly while also focusing on what is important for the customer. Longer-term, we remain optimistic that our differentiated strategies and strong balance sheet have the Company well positioned to add to our global market share and return increased value to our shareholders.
Third Quarter To-Date
Total third quarter-to-date sales for the 37 days ending September 5, 2022 decreased 18.1%, compared with the same 37-day time period in the prior year ended September 6, 2021. Compared to the 37-day period ended September 9, 2019, total net sales decreased 12.6%. Total comparable sales for the 37-day period ending September 5, 2022 were down 19.7% from the comparable period in the prior year, and decreased 15.3% from the comparable period in 2019.
Fiscal 2022 Third Quarter Outlook
The Company is introducing guidance for the three months ending October 29, 2022. Net sales are projected to be in the range of $220 to $228 million. Consolidated operating margins are expected to between 0.5% and 2.5% resulting in earnings per diluted share of approximately $0.03 to $0.18. The Company currently intends to open approximately 35 new stores in fiscal 2022, including up to 16 stores in North America, 14 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 August 27, 2022, we operated 753 stores, including 612 in the United States, 52 in Canada, 70 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.
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
| Three Months Ended | ||||||||||||||
| July 30, 2022 | % of Sales | July 31, 2021 | % of Sales | |||||||||||
| Net sales | $ | 219,993 | 100.0 | % | $ | 268,666 | 100.0 | % | ||||||
| Cost of goods sold | 144,929 | 65.9 | % | 163,701 | 60.9 | % | ||||||||
| Gross profit | 75,064 | 34.1 | % | 104,965 | 39.1 | % | ||||||||
| Selling, general and administrative expenses | 70,109 | 31.8 | % | 73,011 | 27.2 | % | ||||||||
| Operating profit | 4,955 | 2.3 | % | 31,954 | 11.9 | % | ||||||||
| Interest income, net | 358 | 0.1 | % | 965 | 0.4 | % | ||||||||
| Other income (expense), net | 233 | 0.1 | % | (151 | ) | -0.1 | % | |||||||
| Earnings before income taxes | 5,546 | 2.5 | % | 32,768 | 12.2 | % | ||||||||
| Provision for income taxes | 2,479 | 1.1 | % | 8,770 | 3.3 | % | ||||||||
| Net income | $ | 3,067 | 1.4 | % | $ | 23,998 | 8.9 | % | ||||||
| Basic earnings per share | $ | 0.16 | $ | 0.95 | ||||||||||
| Diluted earnings per share | $ | 0.16 | $ | 0.94 | ||||||||||
| Weighted average shares used in computation of earnings per share: | ||||||||||||||
| Basic | 19,084 | 25,274 | ||||||||||||
| Diluted | 19,262 | 25,651 | ||||||||||||
| Six Months Ended | ||||||||||||||
| July 30, 2022 | % of Sales | July 31, 2021 | % of Sales | |||||||||||
| Net sales | $ | 440,679 | 100.0 | % | $ | 547,735 | 100.0 | % | ||||||
| Cost of goods sold | 293,242 | 66.5 | % | 339,602 | 62.0 | % | ||||||||
| Gross profit | 147,437 | 33.5 | % | 208,133 | 38.0 | % | ||||||||
| Selling, general and administrative expenses | 141,985 | 32.3 | % | 141,900 | 25.9 | % | ||||||||
| Operating profit | 5,452 | 1.2 | % | 66,233 | 12.1 | % | ||||||||
| Interest income, net | 850 | 0.2 | % | 1,940 | 0.4 | % | ||||||||
| Other income, net | 405 | 0.1 | % | 103 | 0.0 | % | ||||||||
| Earnings before income taxes | 6,707 | 1.5 | % | 68,276 | 12.5 | % | ||||||||
| Provision for income taxes | 4,037 | 0.9 | % | 17,893 | 3.3 | % | ||||||||
| Net income | $ | 2,670 | 0.6 | % | $ | 50,383 | 9.2 | % | ||||||
| Basic earnings per share | $ | 0.14 | $ | 2.00 | ||||||||||
| Diluted earnings per share | $ | 0.14 | $ | 1.96 | ||||||||||
| Weighted average shares used in computation of earnings per share: | ||||||||||||||
| Basic | 19,308 | 25,221 | ||||||||||||
| Diluted | 19,592 | 25,675 | ||||||||||||
ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| July 30, 2022 | January 29, 2022 | July 31, 2021 | ||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Assets | ||||||||||||||||
| Current assets | ||||||||||||||||
| Cash and cash equivalents | $ | 59,144 | $ | 117,223 | $ | 74,207 | ||||||||||
| Marketable securities | 107,036 | 177,260 | 337,772 | |||||||||||||
| Receivables | 24,201 | 14,427 | 24,834 | |||||||||||||
| Inventories | 151,071 | 128,728 | 149,368 | |||||||||||||
| Prepaid expenses and other current assets | 14,053 | 10,011 | 11,656 | |||||||||||||
| Total current assets | 355,505 | 447,649 | 597,837 | |||||||||||||
| Fixed assets, net | 91,196 | 91,451 | 92,921 | |||||||||||||
| Operating lease right-of-use assets | 228,243 | 230,187 | 246,592 | |||||||||||||
| Goodwill | 54,017 | 57,560 | 60,440 | |||||||||||||
| Intangible assets, net | 13,679 | 14,698 | 15,629 | |||||||||||||
| Deferred tax assets, net | 6,546 | 8,659 | 5,879 | |||||||||||||
| Other long-term assets | 11,425 | 11,808 | 11,444 | |||||||||||||
| Total long-term assets | 405,106 | 414,363 | 432,905 | |||||||||||||
| Total assets | $ | 760,611 | $ | 862,012 | $ | 1,030,742 | ||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||
| Current liabilities | ||||||||||||||||
| Trade accounts payable | $ | 72,915 | $ | 55,638 | $ | 80,174 | ||||||||||
| Accrued payroll and payroll taxes | 16,970 | 31,209 | 23,371 | |||||||||||||
| Operating lease liabilities | 67,411 | 63,577 | 65,844 | |||||||||||||
| Other liabilities | 23,951 | 34,015 | 35,764 | |||||||||||||
| Total current liabilities | 181,247 | 184,439 | 205,153 | |||||||||||||
| Long-term operating lease liabilities | 196,073 | 204,309 | 223,043 | |||||||||||||
| Other long-term liabilities | 4,995 | 4,946 | 8,250 | |||||||||||||
| Total long-term liabilities | 201,068 | 209,255 | 231,293 | |||||||||||||
| Total liabilities | 382,315 | 393,694 | 436,446 | |||||||||||||
| Shareholders’ equity | ||||||||||||||||
| Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding | — | — | — | |||||||||||||
| Common stock, no par value, 50,000 shares authorized; 19,474 shares issued and outstanding at July 30, 2022, 21,215 shares issued and outstanding at January 29, 2022, and 25,559 shares issued and outstanding at July 31, 2021 | 184,619 | 180,824 | 176,951 | |||||||||||||
| Accumulated other comprehensive loss | (26,662 | ) | (13,463 | ) | (2,144 | ) | ||||||||||
| Retained earnings | 220,339 | 300,957 | 419,489 | |||||||||||||
| Total shareholders’ equity | 378,296 | 468,318 | 594,296 | |||||||||||||
| Total liabilities and shareholders’ equity | $ | 760,611 | $ | 862,012 | $ | 1,030,742 | ||||||||||
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Six Months Ended | |||||||||
| July 30, 2022 | July 31, 2021 | ||||||||
| Cash flows from operating activities: | |||||||||
| Net income | $ | 2,670 | $ | 50,383 | |||||
| Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||||||||
| Depreciation, amortization and accretion | 10,598 | 11,639 | |||||||
| Noncash lease expense | 33,040 | 32,044 | |||||||
| Deferred taxes | 3,035 | 4,260 | |||||||
| Stock-based compensation expense | 3,513 | 3,431 | |||||||
| Impairment of long-lived assets | 65 | 2,079 | |||||||
| Other | (115 | ) | 1,064 | ||||||
| Changes in operating assets and liabilities: | |||||||||
| Receivables | (5,496 | ) | (5,353 | ) | |||||
| Inventories | (24,671 | ) | (15,408 | ) | |||||
| Prepaid expenses and other assets | (3,946 | ) | (4,173 | ) | |||||
| Trade accounts payable | 17,084 | 10,178 | |||||||
| Accrued payroll and payroll taxes | (13,958 | ) | (4,462 | ) | |||||
| Income taxes payable | (4,128 | ) | (304 | ) | |||||
| Operating lease liabilities | (37,239 | ) | (40,413 | ) | |||||
| Other liabilities | (4,611 | ) | 7,165 | ||||||
| Net cash (used in) provided by operating activities | (24,159 | ) | 52,130 | ||||||
| Cash flows from investing activities: | |||||||||
| Additions to fixed assets | (10,253 | ) | (5,418 | ) | |||||
| Purchases of marketable securities and other investments | (1,914 | ) | (112,888 | ) | |||||
| Sales and maturities of marketable securities and other investments | 67,890 | 75,234 | |||||||
| Net cash provided by (used in) investing activities | 55,723 | (43,072 | ) | ||||||
| Cash flows from financing activities: | |||||||||
| Proceeds from revolving credit facilities | 2,430 | — | |||||||
| Payments on revolving credit facilities | (2,430 | ) | — | ||||||
| Proceeds from issuance and exercise of stock-based awards | 781 | 2,452 | |||||||
| Payments for tax withholdings on equity awards | (499 | ) | (560 | ) | |||||
| Common stock repurchased | (87,860 | ) | (10,481 | ) | |||||
| Net cash used in financing activities | (87,578 | ) | (8,589 | ) | |||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (2,367 | ) | 139 | ||||||
| Net (decrease) increase in cash, cash equivalents, and restricted cash | (58,381 | ) | 608 | ||||||
| Cash, cash equivalents, and restricted cash, beginning of period | 124,052 | 80,690 | |||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | 65,671 | $ | 81,298 | |||||
| Supplemental disclosure on cash flow information: | |||||||||
| Cash paid during the period for income taxes | $ | 5,027 | $ | 13,542 | |||||
| Accrual for purchases of fixed assets | 2,466 | 686 | |||||||
| Accrual for repurchase of common stock | - | 442 | |||||||
Company Contact:
Darin White
Director of Finance &
Investor Relations
Zumiez Inc.
(425) 551-1500, ext. 1337
Investor Contact:
ICR
Brendon Frey
(203) 682-8200