Fourth Quarter Earnings Per Share of $0.74
LYNNWOOD, WA -- (Marketwired - March 09, 2017) - Zumiez Inc. (NASDAQ: ZUMZ) today reported results for the fourth quarter and fiscal year ended January 28, 2017.
Total net sales for the fourth quarter ended January 28, 2017 (13 weeks) increased 8.7% to $263.6 million from $242.4 million in the quarter ended January 30, 2016 (13 weeks). Comparable sales for the 13-week period ended January 28, 2017 increased 5.1% compared to a 9.5% decrease for the 13-week period ended January 30, 2016. Net income in the fourth quarter of fiscal 2016 increased 38.3% to $18.2 million, or $0.74 per diluted share, from net income of $13.1 million, or $0.50 per diluted share, in the fourth quarter of fiscal 2015. The results for fiscal 2015 include charges of $1.2 million, or approximately $0.03 per diluted share for exit costs associated with the shutdown of the Company's fulfillment facility in Edwardsville, Kansas.
Total net sales for fiscal 2016 (52 weeks) increased 4.0% to $836.3 million from $804.2 million in fiscal 2015 (52 weeks). Comparable sales for the 52-week period ended January 28, 2017 decreased 0.2% compared to a 5.3% decrease for the 52-week period ended January 30, 2016. Net income in fiscal 2016 decreased 10.0% to $25.9 million, or $1.04 per diluted share compared to net income in the prior fiscal year of $28.8 million, or $1.04 per diluted share. Results for the fiscal year 2015 include approximately $1.5 million, or $0.04 per diluted share, for charges associated with the acquisition of Blue Tomato, and $1.2 million, or approximately $0.03 per diluted share for exit costs associated with the shutdown of the Company's fulfillment facility in Edwardsville, Kansas.
Cash and Current Marketable Securities
At January 28, 2017, the Company had cash and current marketable securities of $78.8 million, compared to cash and current marketable securities of $75.6 million at January 30, 2016. The increase in cash and current marketable securities was driven by cash generated through operations of $48.5 million partially offset by stock repurchases of $21.6 million and capital expenditures of $20.4 million.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "Our fourth quarter earnings performance exceeded expectations driven by efficiencies realized as we continued to execute on our omni-channel and localization efforts combined with a more favorable tax rate. The investments we've made in our merchandise offering, sales teams and omnichannel capabilities generated solid top-line momentum during the holiday season and continue to further distinguish Zumiez, Blue Tomato and Fast Times from the competition. We are pleased with our finish to the year especially in light of the headwinds facing the retail industry. Looking ahead, our primary focus remains on executing the strategic multi-year growth objectives that we believe will deliver increased profitability and greater shareholder value over the long-term. We believe that it is this focus that will allow us to successfully navigate through the current environment, including the impact that certain events are having on our monthly sales cadence in early 2017."
February 2017 Sales
Total net sales for the four-week period ended February 25, 2017 decreased 0.8% to $51.5 million, compared to $51.9 million for the four-week period ended February 27, 2016. The Company's comparable sales decreased 3.1% for the four-week period ended February 25, 2017 compared with a comparable sales decrease of 8.6% for the four-week period ended February 27, 2016.
Fiscal 2017 First Quarter Outlook
The Company is introducing guidance for the three months ending April 29, 2017. Net sales are projected to be in the range of $178 million to $182 million resulting in a net loss per share of approximately -$0.17 to -$0.21. This guidance is based upon anticipated comparable sales growth of between 0% and positive 2% for the first quarter of fiscal 2017 compared to the prior year. The Company currently intends to open approximately 18 new stores in fiscal 2017, including up to 3 stores in Canada, 4 stores in Europe and 2 stores in Australia.
A conference call will be held today to discuss fourth quarter and fiscal 2016 year-end 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 80527207.
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, 2017 we operated 684 stores, including 602 in the United States, 48 in Canada, and 29 in Europe and 5 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 www.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 October 29, 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.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
-------------------------------------------
January 28, % of January 30, % of
2017 Sales 2016 Sales
----------- -------- ----------- --------
Net sales $ 263,635 100.0% $ 242,434 100.0%
Cost of goods sold 169,613 64.3% 158,177 65.2%
----------- -------- ----------- --------
Gross profit 94,022 35.7% 84,257 34.8%
Selling, general and
administrative expenses 66,115 25.0% 62,754 25.9%
----------- -------- ----------- --------
Operating profit 27,907 10.7% 21,503 8.9%
Interest income, net 11 0.0% 90 0.0%
Other income (expense), net 195 0.1% (606) (0.2%)
----------- -------- ----------- --------
Earnings before income taxes 28,113 10.8% 20,987 8.7%
Provision for income taxes 9,929 3.8% 7,838 3.2%
----------- -------- ----------- --------
Net income $ 18,184 7.0% $ 13,149 5.5%
=========== ======== =========== ========
Basic earnings per share $ 0.74 $ 0.50
=========== ===========
Diluted earnings per share $ 0.74 $ 0.50
=========== ===========
Weighted average shares used
in computation of earnings
per share:
Basic 24,506 26,071
Diluted 24,691 26,200
ZUMIEZ INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Twelve Months Ended
-------------------------------------------
January 28, % of January 30, % of
2017 Sales 2016 Sales
----------- -------- ----------- --------
(unaudited)
Net sales $ 836,268 100.0% $ 804,183 100.0%
Cost of goods sold 561,266 67.1% 535,559 66.6%
----------- -------- ----------- --------
Gross profit 275,002 32.9% 268,624 33.4%
Selling, general and
administrative expenses 235,259 28.1% 222,459 27.7%
----------- -------- ----------- --------
Operating profit 39,743 4.8% 46,165 5.7%
Interest income, net 32 0.0% 529 0.1%
Other income (expense), net 449 0.0% (833) (0.1%)
----------- -------- ----------- --------
Earnings before income taxes 40,224 4.8% 45,861 5.7%
Provision for income taxes 14,320 1.7% 17,076 2.1%
----------- -------- ----------- --------
Net income $ 25,904 3.1% $ 28,785 3.6%
=========== ======== =========== ========
Basic earnings per share $ 1.05 $ 1.05
=========== ===========
Diluted earnings per share $ 1.04 $ 1.04
=========== ===========
Weighted average shares used
in computation of earnings
per share:
Basic 24,727 27,497
Diluted 24,908 27,673
ZUMIEZ INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
January 28, January 30,
2017 2016
------------- -------------
Assets
Current assets
Cash and cash equivalents $ 20,247 $ 43,163
Marketable securities 58,579 32,391
Receivables 12,538 12,840
Inventories 106,924 98,299
Prepaid expenses and other current assets 13,075 12,204
------------- -------------
Total current assets 211,363 198,897
Fixed assets, net 129,651 137,233
Goodwill 56,001 54,245
Intangible assets, net 14,610 11,766
Deferred tax assets, net 7,041 4,634
Other long-term assets 8,017 7,920
------------- -------------
Total long-term assets 215,320 215,798
Total assets $ 426,683 $ 414,695
============= =============
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable $ 25,529 $ 21,919
Accrued payroll and payroll taxes 14,914 12,466
Income taxes payable 1,866 4,066
Deferred rent and tenant allowances 8,344 8,116
Other liabilities 22,944 22,575
------------- -------------
Total current liabilities 73,597 69,142
Long-term deferred rent and tenant allowances 41,066 43,779
Other long-term liabilities 4,969 4,817
------------- -------------
Total long-term liabilities 46,035 48,596
------------- -------------
Total liabilities 119,632 117,738
------------- -------------
Shareholders' equity
Preferred stock, no par value, 20,000 shares
authorized; none issued and outstanding - -
Common stock, no par value, 50,000 shares
authorized; 24,945 shares issued and
outstanding at January 28, 2017 and 25,708
shares issued and outstanding at January 30,
2016 140,984 135,013
Accumulated other comprehensiv loss (16,488) (15,247)
Retained earnings 182,555 177,191
------------- -------------
Total shareholders' equity 307,051 296,957
------------- -------------
Total liabilities and shareholders' equity $ 426,683 $ 414,695
============= =============
ZUMIEZ INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Fiscal Year Ended
----------------------------
January 28, January 30,
2017 2016
------------- -------------
(unaudited) (unaudited)
Cash flows from operating activities:
Net income $ 25,904 $ 28,785
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, amortization and accretion 27,916 30,410
Deferred taxes (2,555) (2,698)
Stock-based compensation expense 4,578 4,996
Excess tax benefit from stock-based
compensation (3) (714)
Other 1,564 4,009
Changes in operating assets and liabilities:
Receivables 413 (1,184)
Inventories (7,984) (5,953)
Prepaid expenses and other current assets (1,793) (133)
Trade accounts payable 3,261 (9,103)
Accrued payroll and payroll taxes 2,313 (483)
Income taxes payable (3,713) 1
Deferred rent and tenant allowances (2,673) 2,613
Other liabilities 1,227 (1,939)
------------- -------------
Net cash provided by operating activities 48,455 48,607 `
------------- -------------
Cash flows from investing activities:
Additions to fixed assets (20,400) (34,834)
Acquisitions, net of cash acquired (5,395) -
Purchases of marketable securities and other
investments (86,826) (59,286)
Sales and maturities of marketable securities
and other investments 61,106 158,850
------------- -------------
Net cash (used in) provided by investing
activities (51,515) 64,730
------------- -------------
Cash flows from financing activities:
Proceeds from revolving credit facilities 23,079 43,173
Payments on revolving credit facilities (22,429) (43,255)
Repurchase of common stock (21,607) (92,235)
Proceeds from exercise of stock-based
compensation, net of withholding tax 880 845
Excess tax benefit from stock-based
compensation 3 714
------------- -------------
Net cash used in financing activities (20,074) (90,758)
------------- -------------
Effect of exchange rate changes on cash and
cash equivalents 218 (278)
Net (decrease) increase in cash and cash
equivalents (22,916) 22,301
Cash and cash equivalents, beginning of
period 43,163 20,862
------------- -------------
Cash and cash equivalents, end of period $ 20,247 $ 43,163
============= =============
Supplemental disclosure on cash flow
information:
Cash paid during the period for income taxes $ 20,462 $ 19,630
Accrual for purchases of fixed assets 1,191 1,166
Accrual for repurchase of common stock - 1,067
Company Contact: Darin White Director of Finance & Investor Relations Zumiez Inc. (425) 551-1500, ext. 1337 Investor Contact: ICR Brendon Frey (203) 682-8200