Financial Data and Key Metrics Changes - First quarter net sales reached $184.3 million, up 3.9% from $177.4 million in the first quarter of 2024 [12] - Comparable sales grew 5.5%, marking the fourth consecutive quarter of positive growth [4] - Gross profit for the first quarter was $55.3 million, a 6.6% increase compared to $51.9 million in the same quarter last year [15] - Net loss for the first quarter was $14.3 million, or $0.79 per share, compared to a net loss of $16.8 million, or $0.86 per share, in the first quarter of 2024 [16] Business Line Data and Key Metrics Changes - North America net sales were $149.7 million, an increase of 4.9% from 2024, with comparable sales up 7.4% [13] - Other international net sales, which include Europe and Australia, were $34.6 million, down 0.2% from last year, with comparable sales down 2.3% [13][14] - The women's category was the largest positive comping category, while hard goods was the only negative comping category [14] Market Data and Key Metrics Changes - North America comparable sales increased 5.1% during the four-week period ended May 31, 2025, while other international comparable sales decreased 14.8% [20] - The company anticipates total sales for the second quarter to be between $207 million and $214 million, representing a negative 2% to positive 2% change from the prior year [22] Company Strategy and Development Direction - The company is focused on three strategic priorities: accelerating top-line expansion, maintaining profitability, and leveraging financial strength to navigate uncertainty [5][6] - Plans to reduce exposure to China by diversifying the sourcing base, aiming for no individual country to represent more than 20% of goods sourced by 2026 [5][36] - The company expects to open nine new stores in 2025 while closing approximately 20 stores [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the global trade environment and adapting to changing market conditions [4][5] - The company anticipates modest year-over-year growth in product margin in 2025, despite challenges from tariffs and store closures [26] - Management noted that achieving previously mentioned annual expectations for fiscal 2025 remains feasible [26] Other Important Information - The company ended the quarter with $101 million in cash and current marketable securities, with no debt on the balance sheet [9][17] - A new share repurchase plan for up to $15 million was authorized by the Board of Directors [18] Q&A Session Summary Question: Can you walk us through the tariff situation and its impact on COGS? - Management highlighted proactive measures taken to mitigate tariff impacts, including sourcing adjustments and cost management strategies [30][32][36] Question: What is the anticipated product margin growth despite tariff exposure? - Management indicated that they expect to grow product margin modestly through various strategies, including working with brand partners and adjusting pricing [37][39] Question: What is the strategy for improving results in the other international markets? - Management acknowledged the challenges in Europe and emphasized a focus on profitability and cash flow, with plans to drive top-line growth through new product offerings [40][44][46]

Financial Performance - First quarter net sales increased by 3.9% to $184.3 million compared to $177.4 million in the same period last year[3] - Comparable sales for the first quarter rose by 5.5%, with North America showing a 7.4% increase[1][3] - The net loss for the first quarter was $14.3 million, or $0.79 per diluted share, an improvement from a net loss of $16.8 million, or $0.86 per diluted share, in the prior year[3][16] - Zumiez Inc. reported a net loss of $14,330,000 for the three months ended May 3, 2025, compared to a net loss of $16,780,000 for the same period in 2024, showing an improvement of approximately 8.7%[20] Cash Flow and Financial Position - Cash and current marketable securities decreased to $101.0 million from $146.6 million year-over-year, primarily due to $50.4 million in share repurchases[4] - The company experienced a net cash used in operating activities of $22,084,000, which is a decline from $18,577,000 in the previous year, indicating increased cash outflow[20] - Cash flows from investing activities resulted in a net cash outflow of $4,188,000, a significant decrease from a net inflow of $7,997,000 in the prior year[20] - Financing activities led to a net cash outflow of $25,029,000, compared to a slight inflow of $228,000 in the same period last year, primarily due to stock repurchases[20] - The company reported cash, cash equivalents, and restricted cash of $71,824,000 at the end of the period, down from $83,687,000 a year earlier, reflecting a decrease of approximately 14.2%[20] Share Repurchase and Stock Authorization - The company repurchased 1.8 million shares at an average cost of $13.82 per share, totaling $25.2 million[4] - The board approved a new stock repurchase authorization of up to $15 million, expected to continue through June 30, 2026[9] Future Outlook - For the second quarter, the company expects net sales between $207 million and $214 million, with a loss per share between $0.09 and $0.24[7] - Zumiez plans to open approximately 9 new stores in fiscal 2025, including 6 in North America, 2 in Europe, and 1 in Australia[8] - The company aims to diversify its North American supply chain to reduce exposure to China by the end of the year[5] International Sales and Product Strategy - International sales were slightly negative in the first quarter, prompting a focus on introducing new products to drive demand[5] Depreciation and Expenses - Zumiez Inc. recorded depreciation, amortization, and accretion expenses of $5,387,000, slightly lower than $5,561,000 in the previous year[20] - Noncash lease expenses were reported at $14,639,000, which is consistent with $14,522,000 from the same period last year[20] - The company paid $412,000 in income taxes during the period, a decrease from $654,000 in the prior year[20] - Zumiez Inc. had a significant change in trade accounts payable, with a decrease of $1,357,000 compared to an increase of $21,763,000 in the previous year[20] - The company reported an impairment of long-lived assets amounting to $462,000, compared to $101,000 in the same period last year, indicating increased asset write-downs[20]

Core Insights - Zumiez Inc. reported a net sales increase of 3.9% to $184.3 million for the first quarter ended May 3, 2025, compared to $177.4 million in the same period last year [3] - Comparable sales for the same period increased by 5.5%, with North America showing a stronger performance at 7.4% [1][3] - The company experienced a net loss of $14.3 million, or $0.79 per diluted share, an improvement from a net loss of $16.8 million, or $0.86 per diluted share, in the prior year [3][5] Financial Performance - The first quarter's gross profit margin improved to 30.0% from 29.3% year-over-year, while selling, general and administrative expenses increased to 40.8% of sales [15] - The company had cash and current marketable securities of $101.0 million as of May 3, 2025, down from $146.6 million a year earlier, primarily due to share repurchases and capital expenditures [4] - Zumiez repurchased 1.8 million shares at an average cost of $13.82 per share, totaling $25.2 million during the first quarter [4][9] Market Outlook - The company anticipates net sales for the second quarter of fiscal 2025 to be between $207 million and $214 million, with a projected loss per share ranging from $0.09 to $0.24 [7] - Zumiez plans to open approximately 9 new stores in fiscal 2025, including 6 in North America, 2 in Europe, and 1 in Australia [8] Strategic Initiatives - The CEO highlighted the company's efforts to diversify its North American supply chain to reduce exposure to China amid ongoing trade negotiations [5] - The company aims to introduce new and unique products to drive demand while controlling costs to improve margins, especially in international markets where sales have been challenging [5]

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The company's unaudited interim statements show a reduced net loss of $14.3 million and a decrease in total assets to $599.1 million [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $599.1 million, primarily due to a reduction in cash and shareholders' equity from share repurchases Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | May 3, 2025 (Unaudited) | February 1, 2025 | | :--- | :--- | :--- | | **Total current assets** | $281,190 | $322,385 | | Cash and cash equivalents | $62,519 | $112,668 | | Inventories | $149,864 | $146,648 | | **Total assets** | **$599,100** | **$634,881** | | **Total current liabilities** | $146,875 | $155,514 | | **Total liabilities** | **$300,622** | **$305,904** | | **Total shareholders' equity** | **$298,478** | **$328,977** | [Condensed Consolidated Statements of Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Loss) Net sales grew 3.9% to $184.3 million, leading to a reduced quarterly net loss of $14.3 million Consolidated Statements of Loss (in thousands, except per share amounts) | Metric | Three Months Ended May 3, 2025 | Three Months Ended May 4, 2024 | | :--- | :--- | :--- | | Net sales | $184,343 | $177,388 | | Gross profit | $55,315 | $51,899 | | Operating loss | $(19,872) | $(20,155) | | Net loss | $(14,330) | $(16,780) | | Diluted loss per share | $(0.79) | $(0.86) | [Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Comprehensive loss improved significantly to $7.3 million, driven by positive foreign currency translation adjustments Consolidated Statements of Comprehensive Loss (in thousands) | Metric | Three Months Ended May 3, 2025 | Three Months Ended May 4, 2024 | | :--- | :--- | :--- | | Net loss | $(14,330) | $(16,780) | | Foreign currency translation | $6,614 | $(895) | | **Comprehensive loss** | **$(7,298)** | **$(17,778)** | [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Shareholders' equity declined by $30.5 million, mainly due to a $25.2 million share repurchase and the quarterly net loss - The company repurchased 1,808 thousand shares of its common stock for a total of **$25.2 million** during the quarter[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash decreased by $49.7 million, driven by cash used in operating, investing, and financing activities Summary of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended May 3, 2025 | Three Months Ended May 4, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(22,084) | $(18,577) | | Net cash (used in) provided by investing activities | $(4,188) | $7,997 | | Net cash (used in) provided by financing activities | $(25,029) | $228 | | **Net decrease in cash** | **$(49,693)** | **$(10,597)** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key disclosures include store footprint, regional sales, a $2.9 million lawsuit settlement, and share repurchase activities - The company operates **730 stores** under the names Zumiez, Blue Tomato, and Fast Times across the U.S. (569), Europe (87), Canada (46), and Australia (28)[20](index=20&type=chunk) Net Sales by Geographic Region (in thousands) | Region | Three Months Ended May 3, 2025 | Three Months Ended May 4, 2024 | | :--- | :--- | :--- | | United States | $140,040 | $133,873 | | Europe | $29,292 | $29,569 | | Canada | $9,693 | $8,826 | | Australia | $5,318 | $5,120 | | **Total Net Sales** | **$184,343** | **$177,388** | - The company reached a settlement in principle for **$2,890,000** in the Seana Neihart PAGA lawsuit, subject to court approval[41](index=41&type=chunk) - On June 4, 2025, the company approved a new share repurchase program for up to **$15 million** of its common stock, expected to continue through June 30, 2026[63](index=63&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 3.9% sales increase, improved gross margin, higher SG&A, and future capital expenditure plans - Net sales increased **3.9% to $184.3 million**, driven by a **5.5% increase in comparable sales** attributed to higher dollars per transaction[79](index=79&type=chunk) - Gross profit as a percentage of net sales **increased by 70 basis points to 30.0%**, primarily due to leverage in store occupancy costs[80](index=80&type=chunk) - SG&A expenses increased by $3.1 million, and as a percentage of sales rose by 20 basis points, largely due to a **160 basis point impact from a $2.9 million litigation settlement**[81](index=81&type=chunk) - The company expects to spend approximately **$14.0 million to $16.0 million** on capital expenditures in fiscal 2025, mainly for opening about 9 new stores and for remodels/relocations[87](index=87&type=chunk) - On December 20, 2024, the company entered into a new **$25 million revolving credit facility** with PNC Bank, replacing its previous agreement with Wells Fargo[92](index=92&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk profile remains materially unchanged from the previous fiscal year-end - The company's market risk profile has **not significantly changed** since February 1, 2025[148](index=148&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - Management, including the CEO and CFO, concluded that **disclosure controls and procedures were effective** as of May 3, 2025[149](index=149&type=chunk) - There were **no changes in internal control over financial reporting** during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[150](index=150&type=chunk) [Part II. Other Information](index=32&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company notes routine litigation and refers to a $2.9 million settlement detailed in the financial statement notes - The company refers to Note 5 of the financial statements for details on litigation, which discloses a settlement in principle of **$2,890,000** for a PAGA lawsuit[152](index=152&type=chunk)[41](index=41&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the last Annual Report on Form 10-K - There have been **no material changes** in the risk factors from those disclosed in the Annual Report on Form 10-K for the year ended February 1, 2025[153](index=153&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company details the completion of its $25 million share repurchase program during the quarter Issuer Purchases of Common Stock (in thousands, except price per share) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Dollar Value of Shares that May Yet Be Repurchased Under the Plans | | :--- | :--- | :--- | :--- | | Feb 2 - Mar 1, 2025 | — | $— | $— | | Mar 2 - Apr 5, 2025 | 832 | $14.59 | $13,054 | | Apr 5 - May 3, 2025 | 990 | $13.19 | $— | | **Total** | **1,822** | | | [Defaults Upon Senior Securities](index=32&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities during the period - None[156](index=156&type=chunk) [Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's business operations - Not applicable[156](index=156&type=chunk) [Other Information](index=32&type=section&id=Item%205.%20Other%20Information) No directors or officers engaged in the adoption or termination of Rule 10b5-1 trading arrangements - No directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended May 3, 2025[156](index=156&type=chunk) [Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including officer certifications and XBRL data - The filing includes CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906, as well as financial data in **Inline XBRL format**[160](index=160&type=chunk)

Core Viewpoint - Zumiez Inc. is facing significant challenges in the market, with its stock price nearing a 52-week low and a notable decline of 15.4% over the past three months, prompting a reassessment by investors [1][2]. Group 1: Performance and Market Position - Zumiez has underperformed compared to the Retail - Apparel and Shoes industry, which saw a growth of 1.9%, and the S&P 500 Index, which declined by 1.2% during the same period [2]. - The company experienced a setback during the holiday season due to an unexpected drop in demand, failing to meet internal sales expectations, which raises concerns about its adaptability to market changes [5]. - Challenges in international markets, particularly in Europe, have hindered consistent profitability, indicating deeper structural issues in Zumiez's global strategy [6]. Group 2: Supply Chain and Operational Challenges - Zumiez is vulnerable to supply-chain risks, especially related to tariffs, as approximately 50% of its North American inventory is sourced from China, exposing it to tariff-related uncertainties [7]. - The company is working on diversifying its sourcing, but this may lead to higher costs or supply disruptions, which could negatively impact profitability [7]. Group 3: Strategic Focus and Future Outlook - Despite challenges, Zumiez has shown resilience through strong comparable sales growth and improved profitability in the fourth quarter of fiscal 2024, with a focus on expanding its private label business [8][9]. - The company is optimizing operations by closing underperforming stores and refining logistics, which has led to meaningful reductions in operating costs relative to sales [10]. - For fiscal 2025, Zumiez projects total sales to increase by 1-3% and comparable sales growth of 3-5%, with a focus on enhancing product margins through private-label offerings [11]. Group 4: Valuation and Investment Appeal - Zumiez is currently trading at a forward 12-month price-to-sales (P/S) multiple of 0.26X, significantly lower than the industry average of 1.75X, suggesting it is attractively priced relative to peers [12]. - The company's Value Score of A indicates its potential appeal as an investment opportunity [12]. Group 5: Summary of Strengths and Weaknesses - Zumiez is executing well on margin expansion, cost control, and private label growth, while trading at an attractive valuation [14]. - However, struggles during the holiday season, ongoing international weaknesses, and exposure to supply-chain risks raise concerns about its near-term stability [15].

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 May 3, 2025, Zumiez operates 730 stores globally, with 569 in the United States, 46 in Canada, 87 in Europe, and 28 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] Upcoming Financial Results - Zumiez will report its fiscal 2025 first quarter results on June 5, 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] - Participants are encouraged to pre-register for the conference call and to join 15 minutes early to avoid delays [2]

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]

Zumiez (ZUMZ) Q4 2025 Earnings Call March 13, 2025 10:43 PM ET Company Participants Richard Brooks - CEOChristopher Work - Chief Financial Officer Conference Call Participants Mitch Kummetz - Senior Analyst Operator Good afternoon, ladies and gentlemen, and welcome to Zumie Inc. Fourth Quarter Fiscal twenty twenty four Earnings Conference Call. At this time, all participants are in a listen only mode. We will conduct a question and answer session towards the end of this conference. Before we begin, we would ...