Zumiez Inc. Announces Fiscal 2016 First Quarter ResultsLYNNWOOD, WA -- (Marketwired - June 02, 2016) - 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, 2016.
Total net sales for the first quarter ended April 30, 2016 (13 weeks) decreased 2.6% to $173.0 million from $177.6 million in the first quarter ended May 2, 2015 (13 weeks). Comparable sales for the thirteen weeks ended April 30, 2016 decreased 7.5% compared to a comparable sales increase of 3.0% in the first quarter of 2015. Net loss in the first quarter of fiscal 2016 was $2.1 million, or ($0.08) per diluted share, compared to net income of $2.8 million, or $0.09 per diluted share, in the first quarter of the prior fiscal year. The results for the first quarter of 2015 include approximately $1.1 million, or $0.03 per diluted share, for charges associated with the acquisition of Blue Tomato.
At April 30, 2016, the Company had cash and current marketable securities of $62.1 million, compared to cash and current marketable securities of $150.9 million at May 2, 2015. The decrease in cash and current marketable securities is primarily a result of stock repurchases and capital expenditures, partially offset by cash generated through operations.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "While our monthly comparable sales trends improved as the quarter progressed, the quarter was more challenging than expected. We did experience pockets of strength within our merchandise assortments, however it wasn't enough to offset the general weakness in consumer demand for our major categories. During this period of instability for the retail industry, we are taking actions aimed at preserving near-term profitability while continuing to make the necessary investments in the business to best position the company for future success. We remain confident that we have the right strategies in place to capitalize on the domestic and international growth opportunities that lie ahead and return greater value to our shareholders over the long-term."
May 2016 Sales
Total net sales for the four-week period ended May 28, 2016 decreased 2.9% to $50.0 million, compared to $51.5 million for the four-week period ended May 30, 2015. The Company's comparable sales decreased 7.6% for the four-week period ended May 28, 2016 compared to a comparable sales decrease of 2.2% for the four-week period ended May 30, 2015.
Fiscal 2016 Second Quarter Outlook
The Company is introducing guidance for the three months ending July 30, 2016. Net sales are projected to be in the range of $172 to $176 million resulting in net loss per diluted share of approximately -$0.09 to -$0.13. This guidance is based on an anticipated comparable sales decrease in the 6% to 8% range for the second quarter of fiscal 2016. The Company currently intends to open approximately 29 new stores in fiscal 2016, including up to 6 stores in Canada and 7 stores in Europe.
A conference call will be held today to discuss first quarter fiscal 2016 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 15050707.
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, 2016 we operated 668 stores, including 599 in the United States, 44 in Canada, and 25 in Europe. We operate under the name Zumiez and Blue Tomato. Additionally, we operate ecommerce web sites at www.zumiez.com and www.blue-tomato.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, 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 30, 2016 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
----------------------------------------------------
April 30, 2016 % of Sales May 2, 2015 % of Sales
-------------- ---------- ----------- ----------
Net sales $ 172,970 100.0% $ 177,610 100.0%
Cost of goods sold 123,012 71.1% 121,075 68.2%
-------------- ---------- ----------- ----------
Gross profit 49,958 28.9% 56,535 31.8%
Selling, general and
administrative
expenses 53,899 31.2% 52,409 29.5%
-------------- ---------- ----------- ----------
Operating (loss) profit (3,941) (2.3%) 4,126 2.3%
Interest income, net 31 0.0% 205 0.1%
Other income, net 499 0.3% 115 0.1%
-------------- ---------- ----------- ----------
(Loss) earnings before
income taxes (3,411) (2.0%) 4,446 2.5%
(Benefit) provision for
income taxes (1,274) (0.7%) 1,676 0.9%
-------------- ---------- ----------- ----------
Net (loss) income $ (2,137) (1.3%) $ 2,770 1.6%
============== ========== =========== ==========
Basic (loss) earnings
per share $ (0.08) $ 0.10
============== ===========
Diluted (loss) earnings
per share $ (0.08) $ 0.09
============== ===========
Weighted average shares
used in computation of
(loss) earnings per
share:
Basic 25,185 29,141
Diluted 25,185 29,486
ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
April 30, January 30, May 2,
2016 2016 2015
----------- ----------- -----------
Assets (Unaudited) (Unaudited)
Current assets
Cash and cash equivalents $ 16,890 $ 43,163 $ 11,806
Marketable securities 45,236 32,391 139,048
Receivables 13,234 12,840 14,401
Inventories 112,971 98,299 104,091
Prepaid expenses and other 12,282 12,204 11,117
----------- ----------- -----------
Total current assets 200,613 198,897 280,463
Fixed assets, net 138,156 137,233 140,320
Goodwill 56,157 54,245 55,478
Intangible assets, net 12,313 11,766 12,460
Deferred tax asset 6,362 4,634 2,831
Other long-term assets 8,547 7,920 8,482
----------- ----------- -----------
Total long-term assets 221,535 215,798 219,571
Total assets $ 422,148 $ 414,695 $ 500,034
=========== =========== ===========
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable $ 44,922 $ 21,919 $ 39,525
Accrued payroll and payroll taxes 10,074 12,466 9,168
Income taxes payable 28 4,066 732
Deferred rent and tenant allowances 8,229 8,116 7,448
Other liabilities 20,863 22,575 29,276
----------- ----------- -----------
Total current liabilities 84,116 69,142 86,149
Long-term deferred rent and tenant
allowances 43,932 43,779 44,761
Other long-term liabilities 4,800 4,817 4,698
----------- ----------- -----------
Total long-term liabilities 48,732 48,596 49,459
----------- ----------- -----------
Total liabilities 132,848 117,738 135,608
----------- ----------- -----------
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; 25,330 shares
issued and outstanding at April 30,
2016, 25,708 shares issued and
outstanding at January 30, 2016 and
29,535 shares issued and outstanding
at May 2, 2015. 136,028 135,013 131,715
Accumulated other comprehensive loss (10,260) (15,247) (11,767)
Retained earnings 163,532 177,191 244,478
----------- ----------- -----------
Total shareholders' equity 289,300 296,957 364,426
----------- ----------- -----------
Total liabilities and shareholders'
equity $ 422,148 $ 414,695 $ 500,034
=========== =========== ===========
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
-----------------------------
April 30, 2016 May 2, 2015
-------------- -------------
Cash flows from operating activities:
Net (loss) income $ (2,137) $ 2,770
Adjustments to reconcile net (loss) income to
net cash provided by operating activities:
Depreciation, amortization and accretion 7,222 7,797
Deferred taxes (1,586) (622)
Stock-based compensation expense 1,035 1,572
Excess tax benefit from stock-based
compensation 425 (689)
Other (176) (76)
Changes in operating assets and
liabilities:
Receivables 548 (1,617)
Inventories (13,125) (10,187)
Prepaid expenses and other (545) 605
Trade accounts payable 22,617 7,726
Accrued payroll and payroll taxes (2,523) (3,891)
Income taxes payable (5,145) (3,355)
Deferred rent and tenant allowances (139) 2,444
Other liabilities (3,341) (789)
-------------- -------------
Net cash provided by operating activities 3,130 1,688
-------------- -------------
Cash flows from investing activities:
Additions to fixed assets (4,485) (8,818)
Purchases of marketable securities and other
investments (26,854) (35,037)
Sales and maturities of marketable securities
and other investments 13,761 29,074
-------------- -------------
Net cash used in investing activities (17,578) (14,781)
-------------- -------------
Cash flows from financing activities:
Proceeds from long-term debt and revolving
credit facilities - 4,310
Payments on long-term debt and revolving
credit facilities - (1,271)
Repurchase of common stock (12,248) -
Proceeds from exercise of stock-based awards,
net of withholding tax 405 367
Excess tax benefit from stock-based
compensation (425) 689
-------------- -------------
Net cash (used in) provided by financing
activities (12,268) 4,095
-------------- -------------
Effect of exchange rate changes on cash and
cash equivalents 443 (58)
Net decrease in cash and cash equivalents (26,273) (9,056)
Cash and cash equivalents, beginning of
period 43,163 20,862
-------------- -------------
Cash and cash equivalents, end of period $ 16,890 $ 11,806
============== =============
Supplemental disclosure on cash flow
information:
Cash paid during the period for income
taxes $ 5,470 $ 5,667
Accrual for purchases of fixed assets 3,309 4,489
Accrual for repurchase of common stock 341 -
Company Contact:
Darin White
Director of Finance &
Investor Relations
Zumiez Inc.
(425) 551-1500, ext. 1337
Investor Contact:
ICR
Brendon Frey
(203) 682-8200
