Group 1 - The article emphasizes a long-only investment strategy that evaluates companies from an operational and buy-and-hold perspective, focusing on long-term earnings power and competitive dynamics rather than market-driven price actions [1] - Quipus Capital's approach suggests that most recommendations will be holds, indicating a selective buying strategy where only a small fraction of companies are deemed worthy of purchase at any given time [1] - The hold articles are intended to provide valuable information for future investors and introduce a healthy skepticism in a generally bullish market environment [1] Group 2 - The author discloses having no stock or derivative positions in the companies mentioned and has no plans to initiate any such positions in the near future [2] - The article reflects the author's personal opinions and is not influenced by any compensation from companies mentioned, aside from Seeking Alpha [2] - Seeking Alpha clarifies that past performance does not guarantee future results and that the views expressed may not represent the platform as a whole [3]

Core Insights - Zumiez Inc. (ZUMZ) reported fourth-quarter fiscal 2024 results with sales and earnings below the Zacks Consensus Estimate, showing a year-over-year decrease in sales and an increase in earnings [1][4]. Financial Performance - Quarterly earnings were 78 cents per share, missing the Zacks Consensus Estimate of 79 cents, but improved from a loss of $1.73 per share in the same quarter last year [3]. - Total net sales were $279.2 million, slightly below the Zacks Consensus Estimate of $281 million, and decreased by 0.9% from $281.8 million in the prior-year quarter [4]. - Comparable sales (comps) rose 5.9% year over year, marking the third consecutive quarter of positive growth, although it fell short of the 6% growth expected by analysts [5]. Regional and Category Performance - North America's net sales increased by 0.8% year over year to $214.2 million, while international sales declined by 6.4% to $65 million [6]. - Comps in North America increased by 7.2%, while international comps rose by 1.9%, with women's apparel showing the highest increase among product categories [7]. Margins and Costs - Gross profit increased by 4.5% year over year to $101 million, with gross margin expanding by 190 basis points to 36.2% [8]. - Selling, general and administrative (SG&A) costs decreased by 37.5% year over year to $80.9 million, representing 29% of sales [9]. Operational Highlights - Zumiez reported an operating income of $20.1 million, a significant improvement from an operating loss of $32.8 million in the previous year [10]. - As of February 1, 2025, cash and current marketable securities totaled $147.6 million, down from $171.6 million a year earlier, with no debt reported [11]. Future Outlook - For the first quarter of fiscal 2025, Zumiez anticipates total sales of $179-$183 million, indicating year-over-year growth of 1-3%, with comps expected to increase by 3-5% [16]. - The company expects total sales growth for fiscal 2025 despite the closure of 33 stores in fiscal 2024 and anticipated 20 store closures in 2025, which will negatively impact growth by $14.7 million [19]. - Capital expenditure for the year is projected to be between $14 million and $16 million [21].

Financial Data and Key Metrics Changes - Comparable sales increased by 5.9%, marking the third consecutive quarter of positive comparable sales growth [5][21] - Total sales for Q4 2024 were $279 million, which was $7 million below the midpoint of initial guidance but $2 million above the high end of revised guidance [6][20] - Operating profit more than doubled to $20 million, and EPS increased by 95% to $0.78 after adjusting for a one-time goodwill impairment charge [7][25] - For the full year, net sales were $889.2 million, an increase of 1.6% from the previous year [27][30] Business Line Data and Key Metrics Changes - Men's category maintained positive momentum, delivering growth for the fifth consecutive quarter [8] - Women's category became the largest growth category for the quarter, continuing strong results [8][23] - Footwear positively contributed for the third consecutive quarter [8] - Hard goods faced pressure due to a downturn in skate hard goods, partially offset by gains in the snow category [9] Market Data and Key Metrics Changes - North America net sales were $214.2 million, an increase of 0.8% from the previous year [22] - Comparable sales for North America were up 7.2%, marking the fourth consecutive quarter of growth [22] - Other international net sales were $65 million, down 6.4% from last year, but improved to a positive 3.7% in Q4 [15][16] Company Strategy and Development Direction - The company will focus on accelerating global top-line expansion through strategic investments [11] - Key strategies include injecting assortments with newness, expanding private label businesses, and enhancing customer engagement [12][13] - The company plans to open nine new stores in 2025, including two in Europe and one in Australia [49] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the volatility in consumer purchasing patterns and the uncertain macroeconomic environment [17] - The company is cautiously optimistic about maintaining positive momentum in comparable sales and improving top and bottom line results in Q1 2025 [41][44] - Despite store closures, management believes total sales will grow in fiscal 2025 [45] Other Important Information - The company ended the year with $146.6 million in inventory, up 13.8% compared to the previous year [36] - Cash and current marketable securities were $147.6 million, with no debt on the balance sheet [34][35] Q&A Session Summary Question: Impact of tariffs on private label business - Management discussed efforts to diversify sourcing to mitigate tariff impacts, noting that approximately 50% of North America receipts were concentrated in China [54][55][56] Question: Leverage points on EBITDA versus SG&A - Management indicated that they expect to grow sales and operating profit, with good opportunities for gross margin growth and managing SG&A expenses in line with sales [60][62] Question: Ability to grow operating margin on low single-digit comp - Management confirmed that it is possible to grow operating margin even with low single-digit comparable sales growth [67][68]

Company Performance - Zumiez reported quarterly earnings of $0.78 per share, missing the Zacks Consensus Estimate of $0.79 per share, but showing an increase from $0.40 per share a year ago, representing an earnings surprise of -1.27% [1] - The company posted revenues of $279.16 million for the quarter ended January 2025, missing the Zacks Consensus Estimate by 0.62%, and down from $281.82 million year-over-year [2] - Over the last four quarters, Zumiez has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Stock Performance - Zumiez shares have declined approximately 30.6% since the beginning of the year, compared to a decline of -4.8% for the S&P 500 [3] - The current Zacks Rank for Zumiez is 4 (Sell), indicating expectations for the stock to underperform the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.39 on revenues of $175.53 million, and for the current fiscal year, it is $0.78 on revenues of $905.17 million [7] - The outlook for the Retail - Apparel and Shoes industry is currently in the top 33% of over 250 Zacks industries, suggesting that the industry may positively influence stock performance [8]

Financial Performance - Fourth quarter comparable sales increased by 5.9%, while net sales decreased by 0.9% to $279.2 million compared to $281.8 million in the same quarter last year[2]. - Fourth quarter gross margin improved by 190 basis points to 36.2%, with net income rising to $14.8 million, or $0.78 per share, from a net loss of $33.5 million, or $1.73 per share, in the prior year[2][3]. - For the fiscal year ended February 1, 2025, total net sales increased by 1.6% to $889.2 million, with comparable sales up by 4.0%[3]. - The company reported a net loss of $1.7 million, or $0.09 per share, for fiscal 2024, compared to a net loss of $62.6 million, or $3.25 per share, in fiscal 2023[3][14]. - Zumiez Inc. reported a net loss of $1.713 million for the fiscal year ended February 1, 2025, compared to a net loss of $62.610 million for the previous year[18]. Cash and Investments - The company had cash and current marketable securities of $147.6 million as of February 1, 2025, down from $171.6 million a year earlier, primarily due to share repurchases and capital expenditures[4]. - Cash flows from operating activities provided $20.701 million, an increase from $14.755 million in the prior year[19]. - Net cash provided by investing activities was $32.602 million, a significant improvement from a net cash used of $8.548 million in the previous year[19]. - The ending cash, cash equivalents, and restricted cash balance was $121.529 million, up from $94.284 million at the beginning of the period[19]. - Cash paid for income taxes during the period was $2.490 million, compared to $2.065 million in the previous year[19]. Inventory and Receivables - The company experienced a decrease in inventories by $21.687 million, while receivables increased by $1.533 million[19]. Store Operations and Expansion - Zumiez operates 729 stores as of March 1, 2025, including 569 in the United States, 46 in Canada, 87 in Europe, and 27 in Australia[11]. - Zumiez plans to open approximately 9 new stores in fiscal 2025, including up to 6 in North America, 2 in Europe, and 1 in Australia[7]. Stock and Shareholder Actions - The board approved a new stock repurchase authorization of up to $25 million, expected to continue through March 31, 2026[8][9]. - Zumiez Inc. repurchased common stock amounting to $25.206 million during the fiscal year[19]. Impairments and Expenses - The company recorded an impairment of goodwill and long-lived assets totaling $1.473 million, a significant decrease from $43.904 million in the prior year[18]. - Depreciation, amortization, and accretion expenses were $22.160 million, slightly down from $22.763 million[18]. - The company reported a foreign currency transaction loss of $2.145 million, compared to a minimal loss of $25 in the previous year[18]. Future Projections - The company projects net sales for the first quarter ending May 3, 2025, to be in the range of $179 to $183 million, with expected earnings per share losses between $0.72 and $0.82[7]. - First quarter-to-date comparable sales increased by 4.3%, led by a 6.4% increase in North America, while other international comparable sales decreased by 3.7%[6].

Core Insights - Zumiez Inc. reported a 5.9% increase in comparable sales for the fourth quarter, with gross margin improving by 190 basis points to 36.2% [1][2] - The company achieved earnings per share of $0.78, a significant recovery from a loss of $1.73 in the same quarter of the previous year [1][2] - The board has approved a new stock repurchase authorization of up to $25 million [1][8] Financial Performance - Net sales for the fourth quarter decreased by 0.9% to $279.2 million compared to $281.8 million in the prior year [2] - For the fiscal year, total net sales increased by 1.6% to $889.2 million from $875.5 million [3] - The net loss for fiscal 2024 was $1.7 million, or $0.09 per share, compared to a net loss of $62.6 million, or $3.25 per share, in fiscal 2023 [3][14] Cash and Marketable Securities - As of February 1, 2025, the company had cash and current marketable securities totaling $147.6 million, down from $171.6 million a year earlier [4] - The decrease was primarily due to share repurchases and capital expenditures, partially offset by cash flow from operations [4] Operational Highlights - The CEO highlighted significant improvements in operating profitability driven by gross margin expansion and reduced operating expenses [5] - Comparable sales for the first quarter-to-date increased by 4.3%, with North America leading at a 6.4% increase [6] Future Outlook - The company projects net sales for the first quarter ending May 3, 2025, to be between $179 million and $183 million, with expected earnings per share losses between $0.72 and $0.82 [7] - Plans to open approximately 9 new stores in fiscal 2025, including 6 in North America, 2 in Europe, and 1 in Australia [7]

Financial Performance - Fiscal 2024 net sales were $889.2 million, an increase of 1.6% from $875.5 million in fiscal 2023[173]. - Comparable sales increased by 4.0%, driven by higher dollars per transaction, despite a decrease in transaction volume[174]. - Gross profit for fiscal 2024 was $303.0 million, a 7.9% increase from $280.9 million in fiscal 2023, with gross margin improving by 200 basis points to 34.1%[176]. - Operating profit for fiscal 2024 was $1.95 million, a significant improvement of $66.7 million from a loss of $64.8 million in fiscal 2023[159]. - Diluted loss per share improved to $0.09 in fiscal 2024 from a loss of $3.25 per share in fiscal 2023, marking a 97.2% improvement[159]. - Net loss for fiscal 2024 was $1.7 million, or $0.09 per diluted share, compared to a net loss of $62.6 million, or $3.25 per diluted share, in fiscal 2023[179]. Expenses and Cost Management - Selling, general and administrative expenses decreased by $44.6 million from the prior year, primarily due to a goodwill impairment charge in fiscal 2023[156]. - Selling, general and administrative (SG&A) expenses decreased by $44.6 million, or 12.9%, to $301.1 million in fiscal 2024, with SG&A as a percentage of net sales decreasing by 560 basis points to 33.9%[178]. Sales and Market Performance - North America sales increased by $22.3 million or 3.2%, while international sales decreased by $8.6 million or 4.8% in fiscal 2024 compared to fiscal 2023[175]. - The company launched over 120 new brands in 2024, enhancing its product offering and customer experience[158]. Cash Flow and Capital Expenditures - Cash, cash equivalents, and current marketable securities were $147.6 million at February 1, 2025, down from $171.6 million at February 3, 2024, with working capital decreasing by 9% to $166.9 million[182]. - Net cash provided by operating activities increased by $5.9 million to $20.7 million in fiscal 2024, compared to $14.8 million in fiscal 2023[184]. - Capital expenditures in fiscal 2024 totaled $15.0 million, primarily for the opening of 7 new stores and 6 remodels or relocations[188]. - The company expects to spend approximately $13.0 million to $15.0 million on capital expenditures in fiscal 2025, mainly for 9 new stores and 6 remodels or relocations[191]. Debt and Financial Position - The balance sheet remained strong with $147.6 million in cash and marketable securities at the end of fiscal 2024, with no debt[160]. - The new credit facility with PNC Bank provides for a revolving credit of up to $25 million, maturing on December 20, 2025[195]. - The company had no borrowings or open commercial letters of credit outstanding under the secured credit facility at February 1, 2025[197]. Tax and Impairment - The effective income tax rate for fiscal 2024 was 142.0%, significantly higher than -1.2% in fiscal 2023, primarily due to foreign losses in Austria[179]. - The company recognized impairment losses of $1.5 million related to long-lived assets in fiscal 2024[204]. - A 10 basis point decrease in forecasted sales assumptions would have resulted in an additional impairment charge of $0.3 million in fiscal 2024[205]. Future Projections and Risks - The company anticipates continued focus on enhancing customer experience and operational efficiencies in fiscal 2025, despite macroeconomic uncertainties[161]. - Total undiscounted future payments for lease liabilities were $228.5 million at February 1, 2025[211]. - A 10% increase in the sales return reserve at February 1, 2025 would have decreased net income by $0.3 million in fiscal 2024[216]. - The gift card breakage reserve increased by $1.8 million in fiscal 2024, with a 1% increase in the estimated gift card redemption rate potentially decreasing net income by less than $0.1 million[216]. - If the current portfolio average yield rate decreased by 10% in fiscal 2024, net income would have decreased by $0.4 million[228]. - Assuming a 10% change in foreign exchange rates in fiscal 2024, net income would have decreased or increased by $1.3 million[231]. - The company had valuation allowances on deferred tax assets of $28.8 million and $25.0 million at February 1, 2025, and February 3, 2024, respectively[217]. - Significant judgment is required in determining the incremental borrowing rate and expected lease term, impacting lease classification and present value of lease payments[208]. - The company does not believe there is a reasonable likelihood of a material change in estimates or assumptions used to calculate right-of-use assets and lease liabilities[210].

Company Overview - Zumiez Inc. is a leading specialty retailer focused on apparel, footwear, accessories, and hardgoods for young men and women interested in action sports, streetwear, and unique lifestyles [3] - As of February 1, 2025, Zumiez operates 730 stores globally, with 570 in the United States, 46 in Canada, 87 in Europe, and 27 in Australia [3] - The company operates under the names Zumiez, Blue Tomato, and Fast Times, and has ecommerce platforms at zumiez.com, blue-tomato.com, and fasttimes.com.au [3] Financial Reporting - Zumiez Inc. will report its fiscal 2024 fourth quarter and year-end results on March 13, 2025, after the stock market closes [1] - A conference call to discuss the results will take place on the same day at 5:00 p.m. ET [1] Conference Call Details - Participants are encouraged to pre-register for the conference call using a provided link to receive dial-in details [2] - The conference call will also be accessible via a live webcast, and a replay will be available for a limited time [2]

Core Insights - Zumiez Inc. reported a 5.6% year-over-year increase in comparable sales for the nine weeks of the fourth quarter of fiscal 2024, with North America showing a stronger performance at 6.9% growth, while international markets grew by only 1.1% [2] - The company revised its sales and earnings forecasts downward, expecting net sales between $275 million and $277 million, down from previous guidance of $284-$288 million, and projected earnings per share (EPS) between 72 cents and 77 cents, a decline from earlier estimates of 83-93 cents [5][6] - Analysts have adjusted their earnings estimates downward, with the current quarter's EPS revised from 89 cents to 78 cents and fiscal 2024 estimates changed from a profit of 1 cent to a loss of 10 cents [3][5] Sales Performance - The Women's category led the sales increase during the holiday season, followed by Men's and Footwear categories, while Accessories and Hardgoods categories underperformed [2] - The performance during peak holiday weeks fell short of expectations, which contributed to the downward revision of forecasts [6] Strategic Focus - Zumiez is committed to expanding its brand portfolio and product offerings, which has resonated well with customers and boosted sales [9] - The company has increased its private-label offerings, which provide higher margins and contribute to profitability [10] - Investments in technology and personnel aim to enhance customer engagement and loyalty, driving sales growth [11] Cost Management - Zumiez has implemented cost-management initiatives, including closing underperforming stores and optimizing its cost structure to reduce shipping and logistics costs [12] Stock Valuation - Zumiez is currently trading at a forward 12-month price-to-sales (P/S) multiple of 0.33X, significantly below the industry average of 1.78X, indicating it may be undervalued compared to peers [13] - The stock has experienced an 18.5% drop over the past month, reflecting broader challenges affecting the company's performance [14] Future Outlook - Despite the cautious outlook for the fiscal fourth quarter, Zumiez remains optimistic about its strategies to improve revenues and profitability in fiscal 2025 [7][8]

Core Viewpoint - Zumiez Inc. reported a decent performance for the nine weeks ending January 4, 2025, but revised its outlook for the fourth quarter of fiscal 2024 due to softer-than-expected sales during peak holiday weeks [1][8]. Sales Performance - Zumiez registered a 5.6% increase in comparable sales year-over-year, with North America showing a stronger performance at 6.9% growth, while international markets, including Europe and Australia, experienced modest growth of 1.1% [2]. - The Women's category led the sales increase, followed by Men's and Footwear categories, while Accessories and Hardgoods were the weakest-performing categories [3]. Revised Guidance - The company revised its fiscal fourth-quarter net sales forecast to between $275 million and $277 million, down from the previous estimate of $284 million to $288 million. Earnings per share (EPS) is now projected to be between 72 cents and 77 cents, a decrease from the earlier forecast of 83 to 93 cents [5]. - The adjustment in guidance is partly due to the comparison with the previous year's quarter, which included an additional week, expected to affect year-over-year growth in net sales by 4% [6]. Strategic Outlook - Despite the challenges, Zumiez remains confident that recent adjustments to merchandise assortments and customer engagement strategies will enhance revenues and profitability, aiming for greater shareholder value in fiscal 2025 [7][8]. Stock Performance - Shares of Zumiez have declined 26% over the past three months, contrasting with a 10.9% growth in the Retail-Apparel and Shoes industry [9].