Zumiez Inc. Announces Fiscal 2010 Third Quarter Results and November 2010 SalesThird Quarter Comparable Store Sales Increased 14.4%; Third Quarter Diluted EPS Increased 135% to $0.40; November 2010 Net Sales Increased 26.2% to $40.4 Million; November 2010 Comparable Store Sales Increased 20.7%
EVERETT, WA -- (Marketwire - December 01, 2010) - Zumiez Inc. (NASDAQ: ZUMZ), a leading specialty retailer of action sports related apparel, footwear, equipment and accessories, today reported results for the third quarter ended October 30, 2010 and November 2010 sales results.
Total net sales for the third quarter (13 weeks) ended October 30, 2010 increased 20.0% to $135.9 million from $113.2 million reported in the third quarter (13 weeks) ended October 31, 2009. Comparable store sales for the third fiscal quarter of 2010 increased 14.4% vs. a decrease of 8.0% for the third quarter of fiscal 2009. Net income in the third quarter of 2010 increased 143% to $12.3 million, or $0.40 per diluted share from net income of $5.1 million, or $0.17 per diluted share in the third quarter of the prior fiscal year.
Total net sales for the nine months (39 weeks) ended October 30, 2010 increased 17.3% to $322.7 million from $275.2 million reported for the nine months (39 weeks) ended October 31, 2009. Comparable store sales increased 11.3% in the first nine months of fiscal 2010 compared with a decrease of 13.6% for the first nine months of fiscal 2009. The Company posted net income of $9.2 million or $0.30 per diluted share in the first nine months of fiscal 2010 compared to net income in the first nine months of the prior fiscal year of $0.3 million or $0.01 per diluted share. Results for the first nine months of fiscal 2010 include costs of $2.4 million, or approximately $0.05 per diluted share, associated with the relocation of the Company's distribution center, and $2.1 million, or approximately $0.04 per diluted share, for the settlement of a previously disclosed lawsuit. Results for the first nine months of fiscal 2009 include a charge of $1.3 million, or approximately $0.03 per diluted share, associated with the settlement of a previously disclosed lawsuit.
At October 30, 2010, the Company had cash and current marketable securities of $98.9 million compared to cash and current marketable securities of $81.8 million at October 31, 2009.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "We are pleased our third quarter 2010 financial results exceeded our expectations resulting in the highest third quarter profit in our history. Our ongoing investments continue to differentiate the Zumiez shopping experience. Our unique assortment of brands, best in class customer service combined with compelling pricing strategies further distinguished our concept from the competition during back-to-school. We are pleased that the strength we saw in October has continued in November with same store sales again increasing over 20%."
November 2010 Sales
Total net sales for the four-week period ended November 27, 2010 increased 26.2% to $40.4 million, compared to $32.0 million for the four-week period ended November 28, 2009. The Company's comparable store sales increased 20.7% for the four-week period, versus a comparable store sales decrease of 8.5% in the year ago period.
2010 Outlook
The Company is introducing guidance for the three months ending January 29, 2011 of net income per diluted share of approximately $0.43 to $0.47. This guidance is based on an anticipated comparable store sales increase in the low double digit to mid teen range for the fourth quarter of fiscal 2010.
We have opened all 27 new stores in fiscal 2010.
A conference call will be held today to discuss third quarter 2010 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (617)-213-8067 followed by the conference identification code of 13207595.
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 November 27, 2010 we operated 400 stores, which are primarily located in shopping malls, and our web site address is www.zumiez.com.
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, source inventory at acceptable costs, 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 July 31, 2010 as filed with the Securities and Exchange Commission and available at www.sec.gov or http://ir.zumiez.com. 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
------------------------------------------
October 30, % of October 31, % of
2010 Sales 2009 Sales
---------- --------- ---------- ---------
Net sales $ 135,859 100.0% $ 113,192 100.0%
Cost of goods sold 82,811 61.0% 73,093 64.6%
---------- --------- ---------- ---------
Gross profit 53,048 39.0% 40,099 35.4%
Selling, general and
administrative expenses 34,073 25.0% 31,742 28.0%
---------- --------- ---------- ---------
Operating profit 18,975 14.0% 8,357 7.4%
Interest income, net 370 0.3% 161 0.1%
Other income, net 32 0.0% 5 0.0%
---------- --------- ---------- ---------
Earnings before income taxes 19,377 14.3% 8,523 7.5%
Provision for income taxes 7,065 5.2% 3,450 3.0%
---------- --------- ---------- ---------
Net income $ 12,312 9.1% $ 5,073 4.5%
========== ========= ========== =========
Basic earnings per share $ 0.41 $ 0.17
========== ==========
Diluted earnings per share $ 0.40 $ 0.17
========== ==========
Weighted average shares used in
computation of earnings per
share:
Basic 30,029 29,563
Diluted 30,762 30,244
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Nine Months Ended
------------------------------------------
October 30, % of October 31, % of
2010 Sales 2009 Sales
---------- --------- --------- ---------
Net sales $ 322,657 100.0% $ 275,169 100.0%
Cost of goods sold 213,141 66.1% 188,527 68.5%
---------- --------- --------- ---------
Gross profit 109,516 33.9% 86,642 31.5%
Selling, general and
administrative expenses 96,163 29.8% 86,950 31.6%
---------- --------- --------- ---------
Operating profit (loss) 13,353 4.1% (308) (0.1%)
Interest income, net 1,087 0.4% 825 0.3%
Other income, net 103 0.0% 5 0.0%
---------- --------- --------- ---------
Earnings before income taxes 14,543 4.5% 522 0.2%
Provision for income taxes 5,345 1.6% 193 0.1%
---------- --------- --------- ---------
Net income $ 9,198 2.9% $ 329 0.1%
========== ========= ========= =========
Basic net earnings per share $ 0.31 $ 0.01
========== =========
Diluted net earnings per share $ 0.30 $ 0.01
========== =========
Weighted average shares used in
computation of earnings per
share:
Basic 29,908 29,458
Diluted 30,696 30,039
ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
October 30, January 30, October 31,
2010 2010 2009
----------- ----------- -----------
Assets (Unaudited) (Unaudited)
Current assets
Cash and cash equivalents $ 8,314 $ 1,568 $ 3,771
Marketable securities 90,630 106,483 78,033
Receivables 6,854 5,600 7,008
Inventories 83,091 50,916 76,381
Prepaid expenses and other 7,867 6,102 6,355
Deferred tax assets 3,166 3,045 2,995
----------- ----------- -----------
Total current assets 199,922 173,714 174,543
Fixed assets, net 77,646 66,008 71,819
Goodwill and other intangibles 13,154 13,186 13,198
Long-term deferred tax assets 5,740 5,537 4,595
Long-term investments 2,853 872 832
Long-term other assets 1,121 948 920
----------- ----------- -----------
Total long-term assets 100,514 86,551 91,364
Total assets $ 300,436 $ 260,265 $ 265,907
=========== =========== ===========
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable $ 36,976 $ 16,817 $ 33,748
Accrued payroll and payroll taxes 8,194 6,593 6,133
Income taxes payable 2,765 4,006 2,705
Deferred rent and tenant allowances 3,695 3,248 3,368
Other liabilities 10,406 9,123 8,315
----------- ----------- -----------
Total current liabilities 62,036 39,787 54,269
Long-term deferred rent and tenant
allowances 28,085 26,375 27,632
Long-term other liabilities 1,801 1,427 1,310
----------- ----------- -----------
Total long-term liabilities 29,886 27,802 28,942
----------- ----------- -----------
Total liabilities 91,922 67,589 83,211
----------- ----------- -----------
Commitments and contingencies
Shareholders' equity
Preferred stock, no par value, 20,000
shares authorized; none issued and
outstanding -- -- --
Common stock, no par value, 50,000
shares authorized; 30,669 shares
issued and outstanding at October 30,
2010, 30,251 shares issued and
outstanding at January 30, 2010 and
30,255 shares issued and outstanding
at October 31, 2009 88,102 81,399 80,227
Accumulated other comprehensive income 38 101 95
Retained earnings 120,374 111,176 102,374
----------- ----------- -----------
Total shareholders' equity 208,514 192,676 182,696
----------- ----------- -----------
Total liabilities and shareholders'
equity $ 300,436 $ 260,265 $ 265,907
=========== =========== ===========
Company Contacts:
Trevor Lang
Chief Financial Officer &
Chief Administrative Officer
Zumiez Inc.
(425) 551-1500, ext. 1564
Brian Leith
Director of Finance &
Investor Relations
Zumiez Inc.
(425) 551-1500, ext. 1610
Investor Contact:
ICR
Brendon Frey
(203) 682-8200
