ZUMZ - Earnings call transcript Q1 2025

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Zumiez Inc.

First quarter fiscal 2024 Earnings Conference Call. [Operator Instructions].

Before we begin, I'd like to remind everyone of the company's safe harbor language. Today's conference call includes comments concerning Zumiez Inc. historical forward-looking that these this may are based contains all statements call and to not statements subject other be on outlook statements, uncertainties. forward-looking of and that risks business and are facts made on

materially. Actual results may differ

concerning available that cause to Additional this with SEC. in to Zumiez a actual will that time, of Executive the Officer. Chief turn Brooks, At over from filings Rick materially information number the I be results factors information Brooks? could differ discussed call will is the Mr.

Richard Brooks

today's then our and After your With our everyone, Hello, financials through begin about on our touching you, for thank Officer. take call open quarter strategic you outlook the year. the Financial today joining priorities with Work, and balance us that, of we'll Chris first on few remarks to before the will our call. is a the questions. I'll for me performance for Chief Chris XXXX.

Our encouraging first start quarter performance to XXXX. represented an

total per progress year-over-year business down last continued and growth. guidance in of showing sales from demonstrating the and both year, the the same earnings quarter range, While million were end X% of $XXX improvement high in our above positioning trends our share were for sales

First after consecutive for fiscal to men's quarter business, second was its America the top which performance the North line led from sales results quarter our by were year-over-year positive region comparable XXXX. This as driven by was inflected positive. accelerating up finish for

quarter. performance positive the contributed sales to women's also turning business Our for

heightened per higher of first our a by which quarterly than merchandise in average for we exited fiscal year were per units margins on a some Giving unit we as in line selling margin drive retail of price core decline bottom on $X.XX $X.XX the Europe hardgoods decline year. helped the share experienced improvement of driving fueled per guidance remained to better This of offset despite and and overall Overall, as to expected, to share. As ago loss loss growth. loss pressure. in results X's back under focus per snow both $X.XX of season. sales of product full than transactions. share Meanwhile, $X.XX last our This ahead a months our consolidated the was increases X is our on transaction quarter compared guidance meaningfully our a improvement 'XX a

have are ahead progressing profitability the recognize from results to quarter line first bottom a we comparable we improved the top positive sales we that that Our we that a towards still and said, amount of indication achieve considerable revenue business. line of and are profitability. levels That both work us expect further of

control drive and and beyond. our As navigate focused retail environment, to a we the continue to on to we back historical grow its within sales business and stay challenging operating performance

As quarter we call with our on line to top we're fourth concentrated First, reinvigorating to investments continue through our our be focus consumers. the shared strategies; continues ensure win following to on in March,

with with larger assortments our indicating in they our newly couple years, historically, resonating seen over the We're brands offerings. initiatives than customers. launched XXXX of XXXX. fresh accounting current a our to seeing in sales already brands have XXX Some of XXXX plans past for of over launched we are portion levels in well similar product in these with include launch infusing XXX and We brands

service capitalize consumers, team's for And in XX% in XX% and represented both our expanding this of aim maintaining showcases our efforts new growth. these avenue ability also best-in-class online on are XX% Combined, engage growth providing Private year. involves technology. XXXX. growth This trend and and from -- line ways. up our portfolio top approximately training with in We're them XXXX value-conscious XXXX, brand sales Europe, our enhancing relevant we're XX% Label our Private more initiatives, to and to stores Label another in customer strategy. America. North In and our on pivot and Along plan relationships a with our focus these from personalized and enhance both Europe investment in in we in continued with in profitability,

have that the countries X web store this nearly currently expansion market. We instead, enhancing serve pan-European of stores we'll on the slowed our business across year, focus and and European productivity XX

believe has locally globally our create and in our Canada for been selling long the and can cycle in the price full significant work Europe. new with potential a profitability no through on we as difficult of focus believe over advantage as to in relevant the There penetration term. Zumiez we is like that and we doubt current Europe a and what this done achieve the unlock we grow markets markets existing other we focus can a have international Overall, is Australia. business With footprint, value for emerge we trends

Beyond other North Europe, on focused as to underperforming locations an XX stores expect we additional XX XX to XXXX. XXXX, we're in closed in well. close markets In and profitability American

As at staffing a several levels We're including staffing to labor reduced result, volume count. store we adjustments further also decreased with lower initiatives, the store through models to field align optimizing and corporate stores.

cost-saving levels shipping discount year's implement organization. elevated the with logistic selling and made to many costs in our and reduced structural compared have with areas We opportunities other continue throughout last company-wide, changes

strategy, combined adjustments us the negative While that profitable is initiatives environment stronger more well the results these than a operating position earnings the emerge we'll of a the on in combination be and more improve cash, decline. in long and in to with loss not navigate these quarter per over share us term, reduce helped $XXX with sheet million balance current the to sales able despite company. sales Overall, first our strong our

Before like to to dedication. members would I hard thank I turn work our Chris, each team call over and the just their for of

shareholders. I further advancing to to the quarter, for key objectives in appreciative With all strategic we delivering the our progress year the financials. were discuss toward work turn look our that, continued you to truly I'm call efforts I'll Chris the over and collective ahead as greater to forward Your our this do. value to

Christopher Work

Rick, our I'm update of with about the an year. Thanks, to sales good perspective I'll results. May on review going then we're a first provide start our trends thinking and afternoon, everyone. how quarter and on some full

X.X% first sales quarter. of in net from quarter quarter the were First for million X% were million, Comparable $XXX.X $XXX.X down XXXX. down sales the

Rick million, North sales greater as As emphasis offset on was put since were in business up sales first growth XXXX. the a which decline price marking we full in international Europe, in This decrease the benefited comparable XX.X% top net XXXX. last of line revenue. year. region from our year-over-year, margins, From seen million net regional time were X.X% we've selling America from a mentioned, by but international Other $XX.X pressured sales, a America Australia consists down were our $XXX.X of which and sales North Europe perspective,

and XX% largest by a currency net category, the for translation, international Comparable North followed other was XX.X% America Excluding and with quarter. down comping largest negative for decreased women's. our From net sales men's America Accessories X.X% were by year-over-year. Hardgoods Footwear. category Other decreased foreign X.X% positive perspective, impact category, and International sales sales the comping sales were North comparable of our followed up for

transactions, per in consolidated units sales increase a decrease was in the dollars transaction. an Dollars an for by in partially up by per per in in driven by transaction. unit retail transaction quarter, an offset comparable and decrease driven increase The were average increase

percentage to $XX.X million compared quarter for first profit of year. gross sales quarter with of last in the of quarter million compared as $XX.X a was profit quarter XXXX. First XX% the XX.X% first was in the Gross

center improvement costs, XX XX in a driven prior in basis to leverage which in prior results, margin basis points related by service increase revenue of in basis was the XX shift carried costs, a points points basis mix a benefit the basis during of shipping occupancy shipping an year's of year point costs, basis from XX quarter. points of margin. in margin points and XXX in The related leverage XX of leverage primarily gross product distribution negative away and store

quarter or XX.X% nonstore is points wages increases. second on net basis and XX tied in that to wage basis compensation, point or XX the basis The as in a basis expense percent incentive points basis following: to due in of ago. timing as points well year employee expected expenses of XX.X% deleverage increase training from was XXX million benefit first XX increase to a store $XX.X due to SG&A sales $XX.X million net a SG&A sales points of both lower as rate the net quarter. annual wages resulted compared of in to sales due XX sales to be the

compared quarter Operating million of year. of or share first This for $XX.X loss per $XX.X or with of XXXX. million the operating Net loss quarter last to $XX.X of share. or the of $X.XX $XX.X loss compares sales million million per was quarter sales a was the in XX.X% XX.X% $X.XX loss first or XXXX net net net for first

Our first the period. XX.X% benefit benefit compared ago the of year the effective in with was quarter tax rate for XXXX XX.X% a

The sheet. of sorry, as activities. marketable XX, compared $X.X We in -- position. by million in million operating $XXX.X over increase balance cash marketable expenditures million cash the by months a $XX.X and cash May Turning of of as had XXXX business decrease by quarter cash securities capital to million $XXX.X X, $X.X was current in The marketable April current and primarily the financial million driven strong $X.X trailing million ended secure the current XXXX. and provided securities XX to in of offset

$XXX.X with our from X, repurchase extended Directors. unless X, We debt XXXX, of is X.X% or XXXX, the with to continue million June $XXX.X common no down last constant The currency in repurchase Board program the year. the on is the On our through approved to XXXX, X.X% levels period million a June up XX, stock. balance time inventory, ended year. As were May the of have compared shortened basis, expected down quarter Board On by million sheet. of inventory last of XX we

newness Given the and first the backdrop, ending important continue are back-to-school the into quarter sales move season in to expect balance we bring with we XXXX. as for inventory to throughout I our and happy

May to sales our fiscal Now results.

XXXX, XXXX, X, the prior X, year. increased business compared down ended X.X%. our increased weeks period June the were From XXXX, for June ended comparable regional X-week sales period X period X.X% our ended ended net Net May other May period international XX, a X.X% for sales X-week X.X% period the X-week the perspective, the in while X, North to XXXX. from to decreased for X-week sales a compared the XX, Comparable ended business XXXX, for June America

translation, for North X.X% while the X currency the comparable foreign North to X, America prior from net prior weeks June business compared for of June the ended XXXX. year, ended International for XXXX America net XXXX, impact Comparable period X-week X, increased in with X.X% International X.X% sales sales the decreased sales Excluding for weeks X.X%. year, compared Other while the declined the increased same sales

category an sales perspective, product period in that in XXXX, unit by average growth per earnings uncertainty a a category and decline for transaction. everyone units external growth our want decrease our by category offset followed involves some in decrease inherent retail quarter and of sales, XXXX, men's guidance was variety comparable increase comparable May our our fiscal an the per by complexity positive internal sales of I increased increase in by partially fiscal transaction. transaction driven for margin in second to From per in footwear. The in accessory outlook transactions, largest Dollars that hardgoods was With an remind and dollars to comparable performance. our The formulating to the followed increase largest was and factors sales, respect the X-week given estimated impact due women's. and

We total X% and to sales are to be million sales anticipating $XXX million increase. or for X.X% between $XXX quarter the second

prior back-to-school to heavier the quarter Adjusting week quarter digits will will quarter for third benefit quarter. the into quarter volume sales the be we to X week pull shift, second for shift, from single to second in which The same estimating the and second the when out are the flat of of compared year. negative calendar this low

$X.XX to expected in our Consolidated X% as share second negative the percent negative to for negative XXXX positive. of a we of is between slightly will second negative be product X.X% will be the compared expect margins loss We operating quarter sales our prior and $X.XX loss quarter a loss anticipate negative between and and $X.XX per be year.

environment. outlook, As volatility there year the be in macro we and consider uncertainty full the still believe we to

Given financial are but expectations share release year. do earlier March this, for year guidance, from from to this refrain we want giving our specific that our unchanged will the

trends general global We for have past pandemic, driven the experienced several dollar, negative over by X discretionary trends negative and sales the inflation, years, instability. the brand competition

positive across first build and trends positive and for believe growth Given quarters we we believe and to trends we see the our negative that showing includes current impact category of This last quarter. that turning total decline, the time, can sales hold. are X upon magnitude the At women's of the we're category the this throughout see our year. new multiyear are these beginning in the business trends full being XXXX moderate, those our men's taking results

environment, we in in With product will moving with sales we million anticipate of that a we sales recorded XXXX, impairment believe charge years stable costs fourth of that year-over-year of SG&A beyond XXXX. margin, product grow we the X will in in quarter margin more past growth goodwill we'll receive leverage difficult the $XX.X we the After performance benefit XXXX.

fluctuate assumptions, full year year, previously in be for anticipate that operating to to effective while tax will tax return significantly we we believe rate full our mentioned are the will positive XX% we rates quarter, the by With roughly fiscal XXXX. effective margins likely

XXXX stores during stores XX open current This and on footprint. new We in Australia. X in in XX we are our down and Europe in XX year, planning including XXXX focus from America, X North to stores is as stores the optimizing X in

ability of are planning location, in each down, well up approximately stores could closures XX fiscal We landlord closures in the in or to close to our with of results number go our on work as with depending America. most XX our as XXXX The North partners. to operating

and capital between fiscal million in reduction in $XX.X is expenditures XXXX XXXX. to The million fiscal planned to $XX.X for expect openings. We and fewer $XX be XXXX our to compared store $XX million due primarily million

amortization, lease prior and consistent depreciation $XX the and expense, that million year. expect excluding be We noncash approximately will with

shares. year We our million the the be approximately diluted year XX.X are share Any for to from the estimate. repurchased reduce full projecting share currently will shares this count count during

your we And operator, call questions. to up with that, like would for open the

Operator

line Our Kummetz first of comes of question the Instructions] [Operator Mitch from Seaport.

Mitchel Kummetz

Or what's positives now just of on and strength it largely the to it on applied business Rick, the a there? apparel seeing is the men's particular bit women's. Is you're color Can seeing any related? brand to where on little some happening you're categories? improvement you maybe provide more

Richard Brooks

Sure. the of it's I'm to and women's. in It's two trend. things men's performance for And I'm our the tell to going business. that. do Label glad really really the driving are both to same our relative you, Private Mitch, improvement There

in And taking that the couple really it continues is good think I to we're our -- resonate. of particularly ] believe share done a just just ROUCHA what years for business teams we've I doing a [ to Parallel row the really a and on market. in bottoms PSUN job in have -- there. now.

think really I that's been So strong.

second thing things on newness And is is offering really driving And the of in we're really the brands, the that which traction. women's is in it's both -- the offering and it's the brands It's that's been where with what both trend those is apparel being business freshness new really market. is new the and for we're emerging and men's -- cycles. seeing the

Mitchel Kummetz

that? side. really same see you just kind early from up how become years if on I side brand of inform you the on emerged innings? correctly, had a this pretty new of do brands that, several powerful Like Or ago, here? to takeaways we're trio that of the sort Like stack to does there you of trajectory that recall sort as the is what's sort then happening apparel of any to might And of it, that

Richard Brooks

we which brands typically, then down. and can Sure, look and next pretty the broadly is vendor we seen about come and new the we've volume up from as big historically new deconcentrate more trending And what become few back then that last what the are of seen and lose XX top top because top years brands brands and then how brands I been XX them. it volume find to take we ones ourselves reconcentrate But volume as kind those away in Mitch, base. the XX in the we top concentrate and at XX have want of we've crazy

had new is with really now, of So dearth we for consistent pandemic. that brands the historical a this pattern where me, during

I Chris things was business years of of myriad a a there's few the I'd think coming say the challenge that last said, tough. that pandemic. that over That another is them was one definitely as out our of made

And in so and new of us. we've none launched. we X the just brands particularly did those launch the the last all been has for brands didn't really It's really strength worked with of that have and years at have that brands year, then pool that last --

So that ahead we're to grow, we've concentrating and in now couple kind going next of brands years. the over pattern. what historically comments, return I here these now they're are that this top-tier of growing brands find are become at, really seen of probably of And pace we'll said which new in one to going relative and they out to expect I kind as now that to seeing where we're the of those

Mitchel Kummetz

so also -- in it calendar right? my Does not right? to the sound I quarter. third By models but we you're I get math, that an you million. $XX our giving know about that guess, you're And you equivalent, maybe XQ you mentioned shift hit if maybe address And Can would XQ. then, that looks not bigger talking like Chris, about guidance, can the

Christopher Work

and the mean Yes. third goes the fourth year, moving that. the much second will be of your the spot don't we having around $XX of the to growth XXrd shift. shifted when X% in quarter weeks around in tied what's just do calendar we just with we we're remaining vast Yes, extra number look majority calendar then on. the is year The works moving the to away we that this past have in that to in actually the into happy out the -- the I right that or pretty It all XXrd as really at XXXX detriment is Again, million all another week in back from come And an because XXXX. of quarter, quarter. know, week as week. have back-to-school

So the experience those calendar main here. are we'll shifts that

I at in the look May better on as it to focus probably as is will you well. point out, comp results, May

reported see comps of even those in You'll reported actually a little the or shift May just sales volume bit starts trends.

are business. sales the measure comparable the to So key real barometer

Operator

B. from question Richard Our of next comes line the Magnusen Riley. of

Richard Magnusen

you can manage strategy any you during any focusing First, that packages outstanding more period? on inventory that period? you're to further, provide -- that managing believe price strategy any plans although on type then back-to-school, throughout on capitalize details full mention that merchandise there did are or And of promotional your trends for you discounted could you around any

Richard Brooks

right. can start then All add and I'll on. Chris

you're inventory done here positions to that be So And our the results you're last are aggressive year. see really some looking in again, periods. aggressive end the I through we're And at first, QX during believe of on those or to have working. us have going appropriately at those we things inventory we yes, whether teams think areas, going --

the mix. should in course, more we going us. the going a to good are to in that inventories, make I inventory think -- school, business investments back categories done a really terms we On of job to but appropriate on those of forward. driving our believe relative based managing to basis team what's go we're we're had important And apparel

Private have do And to as we and making promotional that relative good some we'll some have But we believe though, be opportunity expect good to customers. inventory customers, going what than are. trend, private mitigation also, Label be promotional for to add those Make on offer we think, way bundling foresee our to taking is we what that well, we yes, think to value risk appropriate for that's But as I will we transactions for for always as in And consumer place some do in label do positions. then really we're traditionally be our We to and that base. do there, package probably the can going do volume and So value back-to-school new have I place more our there brands them we is investments drive think we but I competitors good business that. see which strategies lead to we we're ever. our I efforts really investments. deals cool the and lever use think

So additive we again, margin to do action can but with that. if that, that's

value So for it's a it a good the may also value for shareholders. our be customer, and for us good but

and So thinking back-to-school we're Chris, let add of point. about our I'll at anything thinking that's you kind this else? how

Christopher Work

as would Yes. this The thing seen be I'd inventory numbers, the quarter add row we a in third only our quantify declines. we've is

at levels. teams tight focused managing inventory really the think on are I

that margin You're have the ability add here quarter. seeing to well just quarter as we product Rick saying this what idea just the thing for I'd in the last had we chase. we're is to trajectory as what in the that both And the second forecasting first is

not find think have a I to inventory really where done is, here be better. their want unique means, to chase. quite of current what's And management and to by any be yet continues about to again, it buying our in trends our trend while we that's that something job teams line get able good

years. better down in we've as talked the that in spot. here seen as something and the And of footwear getting like we've call last about digits, not positions are on we're women's that seeing a what We're seeing significantly over couple men's inventory this as is single down growth, low

talking XX% of if So we see the that those about take all really and together, them that years and these we've business. because And three that's XX-plus look all then operated you positive. now across X our it's you're comp operated, of we our important of we've about vast departments, rare majority

XX% here, the good a But see where in a to business in really spot. of we're spot we're starting

in a we so spot And the we that accelerate can we believe as year. through hopefully move

inventory So happy the ready with happy where as we the to -- as to partners we here chase we've that that see have are and brand working behind I think chase are us stands really trends well. ability got some good that

Operator

Instructions]. conference turn to [Operator like I Brooks to Rick now remarks. would the back closing for Sir?

Richard Brooks

interest And you. everybody. appreciation challenge looking for continued my what's really good been Zumiez you Thanks, and our our I and I Thank we're want we forward few last to think September. about talk quarter-to-quarter feeling trends, and to again, to years, year a in again challenging the in to just offer through over work everyone's were

Operator

participating. conference concludes for Thank call. you today's This

You may now disconnect.

Zumiez (ZUMZ) 6 Jun 242025 Q1 Earnings call transcript