Zumiez(ZUMZ) - 2025 Q4 - Annual Report

Financial Performance - Fiscal 2024 net sales were $889.2 million, an increase of 1.6$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$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$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$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$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$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$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].