EX-99.1 2 exh_991.htm PRESS RELEASE EdgarFiling

EXHIBIT 99.1

Zumiez Inc. Announces Fiscal 2019 Second Quarter Results

Second Quarter 2019 Sales Increased 4.3% to $228.4 Million
Second Quarter 2019 Diluted Earnings Per Share Increased 111.8% to $0.36
August 2019 Comparable Sales Increased 7.1%
Company Raises Full Year Outlook

LYNNWOOD, Wash., Sept. 05, 2019 (GLOBE NEWSWIRE) -- Zumiez Inc. (NASDAQ: ZUMZ) today reported results for the second quarter ended August 3, 2019.

Total net sales for the second quarter ended August 3, 2019 (13 weeks) increased 4.3% to $228.4 million from $219.0 million in the quarter ended August 4, 2018 (13 weeks). Comparable sales for the thirteen weeks ended August 3, 2019 increased 3.6% compared to a comparable sales increase of 6.3% for the thirteen weeks ended August 4, 2018. Net income for the second quarter of fiscal 2019 was $9.0 million, or $0.36 per diluted share, compared to net income of $4.4 million, or $0.17 per diluted share in the second quarter of the prior fiscal year.

Total net sales for the six months (26 weeks) ended August 3, 2019 increased 3.8% to $441.4 million from $425.3 million reported for the six months (26 weeks) ended August 4, 2018. Comparable sales increased 3.5% for the twenty-six weeks ended August 3, 2019 compared to a comparable sales increase of 7.2% for the twenty-six weeks ended August 4, 2018. Net income for the first six months of fiscal 2019 was $9.8 million, or $0.39 per diluted share, compared to net income for the first six months of the prior fiscal year of $1.8 million, or $0.07 per diluted share.

At August 3, 2019, the Company had cash and current marketable securities of $188.6 million compared to cash and current marketable securities of $132.9 million at August 4, 2018. The increase in cash and current marketable securities was driven by cash generated through operations partially offset by capital expenditures. 

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, “Our relentless attention to serving our customers combined with the power of our operating model once again fueled solid comparable sales growth and a significant improvement in profitability. Despite tougher two-year stacked comparisons, we continued to experience strong full price selling driven by our differentiated merchandise offering, authentic brand positioning and seamless shopping experience in whatever channel the customer wants to experience us. Additionally, we are starting to witness the benefits of our work aimed at executing our distinct approach to retailing in markets outside of North America. Our better than expected second quarter performance, combined with a good start to the third quarter, provides us with great momentum heading into the back half of the year and puts us into a position to deliver another year of record profitability.”

August 2019 Sales
The Company's comparable sales increased 7.1% for the four-week period ended August 31, 2019 compared to a comparable sales increase of 9.5% for the four-week period ended September 1, 2018.

Outlook
The Company is introducing guidance for the three months ending November 2, 2019. Net sales are projected to be in the range of $258 to $263 million including anticipated comparable sales growth of between 3.0% and 5.0%. Consolidated operating margins are expected to between 7.0% and 7.7% resulting in net income per diluted share of approximately $0.55 to $0.61.  

Based on better than anticipated trends and performance year-to-date, the Company is raising its annual guidance. Fiscal 2019 comparable sales are now expected to increase between 2.0% and 4.0% compared to prior guidance of low single digits. Diluted earnings per share are now projected to range from $2.10 to $2.20, up from previous guidance of $1.84 to $1.94. The Company currently intends to open approximately 16 new stores in fiscal 2019, including up to 6 stores in North America, 7 stores in Europe and 3 stores in Australia. 

Conference call Information
A conference call will be held today to discuss second quarter fiscal 2019 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 3882277.

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 31, 2019, we operated 711 stores, including 607 in the United States, 51 in Canada, 43 in Europe and 10 in Australia. We operate under the names Zumiez, Blue Tomato and Fast Times. Additionally, we operate ecommerce web sites at zumiez.com, 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 February 2, 2019 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 INCOME
(In thousands, except per share amounts)
(Unaudited)
 
  
  Three Months Ended 
  August 3, 2019  % of Sales    August 4, 2018   % of Sales  
Net sales $  228,425 100.0% $  218,971  100.0% 
Cost of goods sold    151,229 66.2%    146,436  66.9% 
Gross profit    77,196 33.8%    72,535  33.1% 
Selling, general and administrative expenses    65,523 28.7%    65,837  30.0% 
Operating profit    11,673 5.1%    6,698  3.1% 
Interest income, net    798 0.3%    238  0.1% 
Other income, net    559 0.3%    248  0.1% 
Earnings before income taxes    13,030 5.7%    7,184  3.3% 
Provision for income taxes    4,005 1.7%    2,807  1.3% 
Net income $  9,025 4.0% $  4,377  2.0% 
Basic earnings per share $  0.36   $  0.18    
Diluted earnings per share $  0.36   $  0.17    
Weighted average shares used in computation of earnings per share:         
Basic    25,199      24,955    
Diluted    25,402      25,188    
            
 
ZUMIEZ INC.
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
 
   Six Months Ended  
  August 3, 2019  % of Sales    August 4, 2018   % of Sales  
Net sales $  441,353 100.0%    425,257  100.0% 
Cost of goods sold    297,693 67.5%    290,136  68.2% 
Gross profit    143,660 32.5%    135,121  31.8% 
Selling, general and administrative expenses    131,019 29.6%    130,133  30.6% 
Operating profit    12,641 2.9%    4,988  1.2% 
Interest income, net    1,650 0.3%    521  0.1% 
Other income (expense), net    711 0.2%    (233) (0.1%) 
Earnings before income taxes    15,002 3.4%    5,276  1.2% 
Provision for income taxes    5,184 1.2%    3,506  0.8% 
Net income $  9,818 2.2%    1,770  0.4% 
Basic earnings per share $  0.39      0.07    
Diluted earnings per share $  0.39      0.07    
Weighted average shares used in computation of earnings per share:           
Basic    25,144      24,894    
Diluted    25,395      25,211    
            

 

  
ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 
  
  August 3, 2019 February 2, 2019 August 4, 2018 
  (Unaudited)   (Unaudited) 
Assets       
Current assets       
Cash and cash equivalents $  63,846   $  52,422   $  41,409  
Marketable securities    124,803    112,912    91,500  
Receivables    21,615    17,776    20,554  
Inventories    151,079    129,268    149,656  
Prepaid expenses and other current assets    11,789    14,797    16,169  
Total current assets    373,132    327,175    319,288  
Fixed assets, net    116,219    120,503    125,141  
Operating lease right-of-use assets    306,056      —      —  
Goodwill    57,306    58,813    59,336  
Intangible assets, net    14,672    15,260    15,470  
Deferred tax assets, net    6,502    5,259    4,417  
Other long-term assets    8,374    7,180    6,815  
Total long-term assets    509,129    207,015    211,179  
Total assets $  882,261   $  534,190   $  530,467  
        
Liabilities and Shareholders’ Equity       
Current liabilities       
Trade accounts payable $  82,859   $  35,293   $  79,370  
Accrued payroll and payroll taxes    15,582    21,015    15,640  
Income taxes payable    2,895      5,817      2,580  
Deferred rent and tenant allowances    —    7,489    7,895  
Operating lease liabilities    58,646      —      —  
Short term borrowings    —    —    5,623  
Other liabilities    21,150    23,494    21,274  
Total current liabilities    181,132    93,108    132,382  
Long-term deferred rent and tenant allowances    —    37,076    38,265  
Long-term operating lease liabilities    293,450      —      —  
Other long-term liabilities     3,472    3,550    4,781  
Total long-term liabilities    296,922    40,626    43,046  
Total liabilities    478,054    133,734    175,428  
        
Shareholders’ equity       
Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding    —      —      —  
Common stock, no par value, 50,000 shares authorized; 25,770 shares issued and outstanding at August 3, 2019 and 25,521 shares issued and outstanding at February 2, 2019 and 25,520 shares issued and outstanding at August 4, 2018    156,625    153,066    149,961  
Accumulated other comprehensive loss    (12,574)   (9,224)   (8,101) 
Retained earnings    260,156    256,614    213,179  
Total shareholders’ equity    404,207    400,456    355,039  
Total liabilities and shareholders’ equity $  882,261   $  534,190   $  530,467  
           

 

  
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
  
   Six Months Ended  
   August 3, 2019   August 4, 2018  
Cash flows from operating activities:     
Net income $  9,818  $  1,770  
Adjustments to reconcile net income to net cash provided by operating activities:     
Depreciation, amortization and accretion    12,514     13,920  
Noncash lease expense    28,318     —  
Deferred taxes    935     (990) 
Stock-based compensation expense    3,214     3,012  
Other    (165)    310  
Changes in operating assets and liabilities:     
Receivables    (770)    (4,099) 
Inventories    (22,727)    (25,993) 
Prepaid expenses and other assets    (2,115)    (1,814) 
Trade accounts payable    47,275     40,815  
Accrued payroll and payroll taxes    (5,345)    (4,785) 
Income taxes payable    (3,857)    (2,973) 
Deferred rent and tenant allowances    —     (872) 
Operating lease liabilities    (29,842)    —  
Other liabilities    (2,090)    (2,997) 
Net cash provided by operating activities    35,163     15,304  
Cash flows from investing activities:     
Additions to fixed assets    (8,292)    (9,061) 
Purchases of marketable securities and other investments    (93,288)    (35,046) 
Sales and maturities of marketable securities and other investments    82,123     41,200  
Net cash used in investing activities    (19,457)    (2,907) 
Cash flows from financing activities:     
Proceeds from revolving credit facilities    —     29,227  
Payments on revolving credit facilities    —     (24,233) 
Proceeds from issuance and exercise of stock-based awards    583     621  
Payments for tax withholdings on equity awards    (238)    (195) 
Net cash provided by financing activities    345     5,420  
Effect of exchange rate changes on cash, cash equivalents, and restricted cash    (504)    (693) 
Net increase in cash, cash equivalents, and restricted cash    15,547     17,124  
Cash, cash equivalents, and restricted cash, beginning of period    54,271     25,803  
Cash, cash equivalents, and restricted cash, end of period $  69,818  $  42,927  
Supplemental disclosure on cash flow information:     
Cash paid during the period for income taxes $  8,056  $  7,362  
Accrual for purchases of fixed assets    2,052     3,496  
      


Company Contact:

Darin White
Director of Finance &
Investor Relations
Zumiez Inc.
(425) 551-1500, ext. 1337

Investor Contact:
ICR
Brendon Frey
(203) 682-8200